NY-listed Seaspan investing up to $270m in Swiber

$13.5m in initial tranche; rest to come after key milestones are hit

Swiber Group's key assets include its headquarters at 12 International Business Park and specialised construction vessels.
Swiber Group's key assets include its headquarters at 12 International Business Park and specialised construction vessels.ST FILE PHOTO

A New York-listed firm will invest up to US$200 million (S$270 million) in Swiber Holdings, a move the marine engineering group says is a significant step forward in its restructuring.

The shot in the arm for Swiber from Seaspan, which owns and manages containerships, comes after more than two years in judicial management.

Swiber and Seaspan said last Saturday that they have modified certain aspects of the investment deal announced last October when the parties signed a term sheet.

An initial investment tranche of US$10 million - this was previously US$20 million - will be unlocked in exchange for an 80 per cent interest in a new holding company that will contain certain Swiber Group assets.

Once the firm has secured the development stage LNG-to-power project in Vietnam and achieved major milestones, a tranche of US$190 million, previously US$180 million, will be used to subscribe to preference shares in Swiber's wholly owned subsidiary, Equatoriale Energy. This entity will also form part of the New Swiber group.

The proposed investment by Seaspan is subject to several conditions, including securing the necessary approvals from creditors, regulators and shareholders.

If the restructuring is successful, certain secured creditors of Swiber will be issued five-year zero coupon secured redeemable convertible bonds amounting to US$120 million in New Swiber.

This will allow the restructured New Swiber to continue to operate the Swiber Group's key assets, which include specialised construction vessels and its headquarters at 12 International Business Park. These are secured to such secured creditors.

It is proposed that unsecured creditors of Swiber, existing shareholders and certain management and professionals involved in the judicial management will receive new shares in New Swiber.

Judicial manager Bob Yap, who is also head of restructuring at KPMG in Singapore, said the development is an "important milestone" to get Swiber on the road to recovery and that they are delighted to work with a firm of Seaspan's reputation.

He added: "There's still more work to be done and we believe this investment by Seaspan will result in a better recovery to all stakeholders compared to winding-up."

The High Court has granted an extension of time for a creditors' meeting to be held by May 31.

A version of this article appeared in the print edition of The Straits Times on April 02, 2019, with the headline 'NY-listed Seaspan investing up to $270m in Swiber'. Subscribe