Swiber lenders said in talks with firm to drop liquidation bid

Some of Swiber Holdings' lenders are pushing for the group to continue its business, according to people familiar with the talks.
Some of Swiber Holdings' lenders are pushing for the group to continue its business, according to people familiar with the talks.ST PHOTO: MARCUS TAN

SINGAPORE (BLOOMBERG) - Some of Swiber Holdings' lenders are pushing for the offshore oil and gas services group to continue its business rather than pursue its plans for liquidation to meet creditor demands, according to people familiar with the talks.

The banks are pushing for judicial management in attempts to recover more of their debt exposure to the Singapore-listed company, the people said, asking not to be identified as the discussions are private.

If Swiber opts instead for judicial management, it would continue its operations under court supervision while attempting to turn around the business. If it goes into liquidation, the company would be wound up and its assets would be sold to repay creditors.

Swiber on Wednesday filed a petition to wind up and liquidate itself after facing US$25.9 million (S$35 million) of demands from creditors. 

The company had US$1.43 billion in liabilities and US$1.99 billion in assets at the end of March, according to its financial statements.

News of Swiber's liquidation plans dragged down the SGX Oil & Gas Indexto a new low. Local companies that rely on contracts within the offshore oil and gas market are reeling from a collapse in oil prices. Last year, a measure of the country's bad-loan ratio reached the highest level since 2009, according to the Monetary Authority of Singapore.

The Singapore bourse said Thursday it will be undertaking a "thorough investigation" into developments at Swiber after the company made key disclosures only after queries from the regulator. Swiber on July 11 said it failed to get a US$200 million equity injection from AMTC Ltd. which had agreed to subscribe for preference shares.

DBS Group Holdings Ltd., Southeast Asia's biggest lender, said Thursday it has about S$700 million in total exposure to Swiber. The bank said it expects to recover half of it. Three calls to Swiber's office went unanswered.

Swiber in June redeemed S$130 million 5.125 per cent notes due 2016 and in July redeemed S$75 million 7 per cent notes. It has four more Singapore dollar bonds worth a total of S$460 million that are outstanding, according to data compiled by Bloomberg.