Swiber saga

Swiber says AMTC reps have not contacted it

ST ILLUSTRATION: MIKE M DIZON

AMTC's agent yet to meet judicial manager despite UK firm's assertion that deal is on

The interim judicial manager of troubled Swiber Holdings has not met any representative from London-based private equity firm AMTC, contrary to claims by AMTC chief executive Smith O'Connor that the deal was still "alive".

KPMG said that no representative of AMTC, which had agreed to invest US$200 million (S$269 million) in Swiber Holdings but has yet to do so, had contacted it.

Its statement yesterday followed a Business Times report last Saturday, quoting Mr O'Connor as saying that the deal with Swiber was still alive and that an AMTC representative had flown to Singapore last week to work on it.

Mr Bob Yap, the head of advisory at KPMG in Singapore, said yesterday: "We are open to discussions with any serious investors."

According to court documents, AMTC's repeated failure to honour a US$200 million investment helped contribute to the collapse of Swiber. On June 9, AMTC agreed to buy US$200 million of preference shares in the Swiber unit Swiber Investment. This would have provided critical funds for the company to stay afloat.

The subscription was to have been completed by June 16, but this was pushed out to June 29. But AMTC on June 27 asked for a further extension to make payment. Swiber Investment refused this request, rendering AMTC in breach of the agreement. A letter of demand was issued on AMTC on July 2 but the firm has yet to make the cash injection.

KPMG said Swiber Investment is taking legal action to enforce its rights against AMTC.

Meanwhile, there are questions as to why the bondholders of a S$130 million note that matured on June 6 and a S$75 million note that matured on July 6 were paid despite Swiber being in financial straits.

Swiber turned to its principal banker, DBS Bank, for a US$85 million loan to pay off the S$130 million note when the cash infusion from AMTC was delayed, according to court documents.

One day before the S$75 million note was due, DBS extended an additional loan of US$61 million because by then there was a real risk of Swiber failing as the AMTC investment had still not materialised.

Preferential treatment for some bondholders?

Industry observers have also asked why DBS secured the loan for the repayment of the S$75 million note against the receivables of Swiber's main revenue generator, Swiber Offshore Construction.

They say this appears to make the repayment of the note a preference payment while also making DBS a secured creditor, which will enable the bank to be paid ahead of unsecured creditors.

Meanwhile, the trustee of Swiber group's Islamic sukuk (bonds) and several Asian institutions that hold the sukuk, along with the trustee of three other notes, have appointed lawyers to look at the interim judicial manager's full report due on Sept 2, and how their interests will be taken into account. Swiber has two notes, a S$1 billion multi-currency medium term (MTN) programme and a US$500 million multi-currency Islamic Trust certificate issuance programme.

Under the MTN programme, it has coupon payments due in the next two months on three notes, a S$160 million note, a S$100 million note and a 450 million yuan (S$91 million) note.

Under the Islamic note programme, it has defaulted on a S$4.88 million coupon payment due Aug 2 on a S$150 million sukuk note, while another S$50 million sukuk note is due in October next year. The total amount owed under these two programmes was US$437.3 million as at July 27.

Ms Tan Mei Yen of WongPartnership represents British and Malayan Trustees (BMT), the trustee of the three outstanding notes under the MTN programme. These have a nominal value S$350 million, BMT told The Straits Times. BMT added that the noteholders are unsecured.

It said it is exploring the option of calling a meeting of bondholders of the three notes. "We are awaiting sufficient information and for the situation to mature and become more definite, to enable a meaningful meeting to take place with the noteholders," it said.

A version of this article appeared in the print edition of The Straits Times on August 12, 2016, with the headline 'The elusive investor'. Print Edition | Subscribe