Swissco demands $43m debt from 3 firms

Swissco Holdings' offshore oil rig.
Swissco Holdings' offshore oil rig.PHOTO: SWISSCO HOLDINGS LIMITED

Debt-ridden Swissco Holdings is demanding a sum of US$31.3 million (S$43.1 million) from three firms as it struggles to stay afloat. It has begun arbitration proceedings in Hong Kong, the rig and vessel chartering group said yesterday.

Star Excellence (HK), in which Swissco has a 50 per cent stake, is claiming US$26.1 million against charterer Tyloo for outstanding charter hire amounts due and owing to Star Excellence under a bareboat charter party entered into by the parties.

Meanwhile, Swissco Offshore, a wholly-owned unit of Swissco, has also made a US$5.2 million claim against shipbuilders Nanjing East Star and Jiangsu Skyrun for a refund of two instalments paid by Swissco Offshore. The contracts have been terminated due to substantial delays in the delivery of the contracted vessels, Swissco said.

Separately, Swissco said it is disputing a US$1.69 million claim from X-Drill Holding alleging the sum is due in relation to services provided by X-Drill to rigs owned by four Swissco units. Swissco said it had responded to a statutory letter of demand from X-Drill a week ago.

Swissco told holders of its $100 million bonds on Monday that it cannot pay out a $2.85 million coupon due next Friday and had no plans on its next course of action.

Swissco faces a US$147.5 million (S$203.2 million) mountain of bank debt maturing from now until 2020. Add to that the principal owed to bond holders due in 2018 and Swissco has a total debt of US$221.6 million.

It then invited bond holders to form an informal steering committee to work with financial adviser EY to develop a "mutually agreeable" restructuring plan. EY will begin discussions with note holders next week, and a second informal note holder meeting will be held in four weeks.

Swissco faces a US$147.5 million mountain of bank debt maturing from now until 2020. Add to that the principal owed to bond holders due in 2018 and Swissco has a total debt of US$221.6 million.

Swissco called for a trading suspension yesterday, given the ongoing efforts to present a debt restructuring plan.

Its shares last traded at 5.2 cents on Monday, before trading was halted ahead of the informal note holder meeting that afternoon.

Swissco has also suspended trading of its 5.7 per cent notes, but bond holders have complained that there have been no buyers for a long time anyway.

A version of this article appeared in the print edition of The Straits Times on October 13, 2016, with the headline 'Swissco demands $43m debt from 3 firms'. Print Edition | Subscribe