Creditors seek to wind up Otto Marine's Aussie units

Singapore mainboard-listed Otto Marine, a builder of ships that service offshore oil and gas facilities, yesterday said some creditors are seeking to wind up its subsidiaries in Australia, adding to signs of strains in an industry beset by energy price declines.

Otto Marine said three creditors filed three such applications with the Supreme Court of Western Australia to wind up Go Inshore and Go Marine Group.

The total claimed against the units is A$787,204 (S$815,800), according to a filing to the stock exchange. The management of Go Marine Group is seeking legal advice and plans to dispute the debts. The cases will be heard on Nov 8, it said.

A slump in crude prices amid slowing global economic growth has hurt Singaporean borrowers in the oil services industry facing a mountain of debt, taking a toll on a country where the marine and offshore industry provides about 19 per cent of manufacturing jobs. Swiber Holdings roiled the local bond market when it defaulted on its local-currency notes last month. Shipping companies have also stumbled, with Marco Polo Marine and Rickmers Maritime having said they are seeking leniency on debts.

Otto Marine extended the maturity of its S$70 million of bonds by six months to February 2017, it said in a July 27 statement. The price of those securities has dropped to about 80 cents on the Singapore dollar from issuance at 100 cents in 2014, according to data compiled by Bloomberg.

The shipbuilder said in that filing that it would redeem the notes within 14 days from the delisting of the company's shares. 

Closely held Ocean International Capital said in a Sept 19 filing that conditions for its offer to delist Otto Marine have been fulfilled.

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A version of this article appeared in the print edition of The Straits Times on September 27, 2016, with the headline 'Creditors seek to wind up Otto Marine's Aussie units'. Print Edition | Subscribe