Debt-laden offshore and marine group Swiber Holdings and its subsidiary Swiber Offshore Construction (SOC) have received key approval from creditors for a proposed restructuring that involves an investment of up to US$200 million (S$276 million) from New York-listed Seaspan Corp.
The approval comes nearly three years after Swiber filed for insolvency with billions in debt and liabilities. Trading in its shares has been suspended since 2016.
The proposal still requires approval from shareholders and regulators, but judicial manager and KPMG head of restructuring Bob Yap said in a statement that the creditors' green light was a "positive step towards achieving a successful restructuring".
On Wednesday, creditors approved both the restructuring proposal and the payment of professional fees and disbursements totalling $4.5 million. The restructuring proposal gained approval from 83 per cent of Swiber Holdings' creditors representing 75.86 per cent in value of claims present and voting, and by 77 per cent of SOC's creditors representing 97.5 per cent in value of claims present and voting.
Earlier in the month, judicial managers had recommended creditors opt for the bailout as liquidation - the likely alternative - would leave unsecured creditors with nothing.
The restructuring plan offers unsecured creditors new Swiber shares worth a 14 per cent stake, which could be diluted to 12.6 per cent. Swiber's unsecured creditors could see a recovery rate of between 8.8 and 10 per cent, while unsecured creditors of SOC might get 1 to 1.2 per cent back, based on the equity value of the restructured group in five years as estimated by accountancy firm BDO.
Seaspan, the world's largest independent owner and manager of containerships, has agreed to invest an initial US$10 million for an 80 per cent stake in the new Swiber, subject to several conditions.
Upon meeting various milestones in relation to the development stage liquefied natural gas (LNG)-to-power project in Vietnam, another US$190 million will be invested to subscribe for new preference shares in Equatoriale Energy, a wholly-owned Swiber subsidiary.
The new Swiber group will continue with Swiber's business of vessel chartering and engineering services while diversifying into the power business, in particular the LNG segment with plans to build, own and operate plants in Vietnam.