Pacific Radiance says cash flow intact despite Swiber fallout

Pacific Radiance operates a diverse fleet of offshore vessels which support offshore exploration, development, production and decommissioning.
Pacific Radiance operates a diverse fleet of offshore vessels which support offshore exploration, development, production and decommissioning. PHOTO: PACIFIC RADIANCE

Oil and gas firm Pacific Radiance expects that the fallout from Swiber Holdings will hit the company's balance sheet but not its cash flow.

It also reassured investors that it had the full support of its lenders, partners and banks, even as the company continues to navigate through one of the worst industry downturns in years.

The company noted in a statement to the Singapore Exchange that it had "doubtful receivables" on its balance sheet in relation to services rendered to Swiber, the offshore marine firm that was placed in judicial management after it failed to keep up with its debts. But the doubtful receivables are classified as a non-cash accounting provision, estimated to be worth US$10.1 million (S$13.5 million), and is not expected to "significantly affect the company's cash flow position".

It added that it "will continue to pursue all legal avenues of recovery of the doubtful receivables".

The company also told investors it was looking at various finance options to take off some of the strain during this challenging period, which may last two to three years. "Some of the key steps include the refinancing of loans with its key lenders, and the amendment of a financial covenant of its sole S$100 million bond issue due August 2018 to avoid any technical breaches," it said.

It also stressed that it was running a business that is quite different from Swiber's.

It said: "The group owns and operates a fleet of offshore support vessels which are mostly chartered out on a time charter basis, while Swiber is a contractor which offers a range of engineering, procurement, installation and construction services; the businesses are different."

Aaron Low

A version of this article appeared in the print edition of The Straits Times on August 11, 2016, with the headline 'Pacific Radiance says cash flow intact despite Swiber fallout'. Print Edition | Subscribe