The Singapore High Court has given the go-ahead for beleaguered Swissco Holdings to be placed under judicial management.

The rig and vessel chartering firm had made the application last November after discussions to restructure its debt with key lenders ended in a stalemate.

Swissco owes $255 million to seven banks. It had planned to pay this off through asset sales and the conversion of debt to equity. The group's largest bank lender is United Overseas Bank, followed by DBS Bank. The firm also owes bond holders $100 million in principal that would be due next year.

Under judicial management, the group will be allowed to continue operating, though under court supervision, while attempting to turn around the business. This is as opposed to liquidation, where firms are wound up and their assets sold.

The court appointed EY's Ms Angela Ee and Mr Purandar Rao as Swissco's judicial managers.

Swissco has been selling assets to pay off debt. The firm said last week it has entered into a memorandum of agreement with Australian Maritime Systems Asset Holdings to sell a vessel for US$7.2 million (S$10.1 million). The vessel has been mortgaged in favour of OCBC as security for obligations under certain banking facilities extended by OCBC. Proceeds from the sale will be used to pay down the amount owed.

Swissco's collapse comes as the local offshore marine industry continues to grapple with one of the most brutal downturns in recent years, led by the slump in oil prices in June 2014. While oil prices have since recovered somewhat, the crunch has already claimed several other casualties. Swiber Holdings and Technics Oil & Gas both filed for judicial management in July last year, and more recently, Ezra Holdings filed for bankruptcy protection in the United States last month.

Swissco shares last traded at 5.2 cents on Oct 10 before trading was suspended. The group's market capitalisation stood at $35.1 million.

Jacqueline Woo