SINGAPORE - Debt-laden Swiber Holdings' application for judicial management was approved by the High Court on Thursday (Oct 6).
At the end of the hearing, Judicial Commissioner Kannan Ramesh ordered that the judicial manager (JM) shall file and make available to creditors of Swiber and its main subsidiary, Swiber Offshore Construction, updates every six weeks from the date of the JM order, on the progress of the JM, unless a meeting of creditors is called within 60 days.
He also suggested that a creditors committee be formed.
The Singapore-listed oilfield services firm applied in July to place itself under judicial management, after initially filing for liquidation, becoming the biggest Singapore company to fall victim to the ongoing oil slump. Judicial management allows for a company to be nursed back to health under the supervision of the Singapore Court.
Swiber said then that it had US$85.1 million in total assets and US$624.2 million in total liabilities, leaving it with net liabilities of US$539 million.
Earlier in the hearing, Swiber's interim judicial managers (IJMs) - led by Bob Yap, head of advisory at KPMG in Singapore - said 27 potential investors have been identified, with some looking at a total investment in the entire group.
The IJMs identified as much as US$294 million in working capital that could be raised for the continued operation of Swiber from the disposal of unencumbered non-core assets such as insurance claims, fleet vessels and property.
Other potential sources of money are ongoing arbitration proceedings, which if successful, will render some value, as well as accounts receivables that the JM can look to for potential recovery, said the IJMs.
They also identified seven ongoing projects that can potentially raise US$1.67 billion and various other bids for future potential projects amounting to US$608 million.
The IJMs had warned last month that if Swiber is liquidated, unsecured creditors, including bondholders, could expect to recover only two cents on the dollar from Swiber, and four cents on the dollar from Swiber Offshore Construction.
Mr Ashok Kumar of BlackOak LLC, the lawyer representing Swiber, said at the hearing that creditors were generally concerned about what their returns were going to be under a JM and how a restructuring of the company would benefit unsecured creditors.
They also want more details on expressions of interest received from investors and other prospective projects that are ongoing, he said.
"IJMs in responses to queries raised by creditors say it is too early to provide a meaningful estimate of returns in a JM scenario but a forecast of returns will be made when the statement of proposals is put before creditors," said Mr Ashok said.
He said the IJMs "will give due regard to the interests of all creditors in accordance with Singapore law," in response to concerns one of Swiber's bondholders has raised.
Legal claims against Swiber have been piling up, rising to US$231.4 million as of Sept 15, up from US$230.7 million a week ago. DBS, Swiber's largest creditor, has a total exposure of S$721 million to Swiber as of July 31.
IJM lawyer Patrick Ang of Rajah Tann said he has no objections to providing creditors with the IJM cost schedule within 30 days or to creditors' request for an update on costs every six weeks.
But in the event the JM calls for a meeting of creditors within 60 days, then the request for an update will be dispensed with, he said.