Beleaguered marine firm Swissco Holdings applied to be placed under judicial management yesterday as it struggles to stay afloat amid a sea of red ink.
The move, which the rig and vessel chartering company heralded last week, was announced after markets closed yesterday.
The applications for Swissco, and its wholly-owned unit Swissco Offshore, to have an interim judicial manager appointed will likely be held in the coming days.
Swissco said last week that it would file for judicial management after its main lenders rejected its debt restructuring plan. The group's largest bank lender is United Overseas Bank, followed by DBS Bank.
The firm owes $255 million to seven banks, which it had planned to pay off through asset sales and the conversion of debt to equity.
What were they doing last year when they were bleeding cash?
A BOND HOLDER
Yesterday's announcement comes as another subsidiary of Swissco, Scott and English (S&E) Energy, received three statutory demands from joint venture partner Ezion Holdings earlier. Ezion wants to wind up the unit unless a US$522,113 (S$744,000) payment is made.
The statutory demands were related to claims arising from various joint ventures between S&E and Ezion for the ownership and management of certain rigs.
On top of that, Swissco owes bond holders $100 million in principal that would have come due in 2018.
"Hopefully the judicial manager can figure out what happened to this company over the last year and why the company did not surface all these issues until a week before the coupon payment was due," said a bond holder, who declined to be named.
Citing issues such as large dividend payouts and substantial increases in directors' fees, the bond holder added: "What were they doing last year when they were bleeding cash?"
Swissco had riled investors when it said just days ahead of a scheduled $2.85 million bond coupon payment on Oct 16 that it had only US$1.2 million in cash and no plan for its next course of action.
Swissco chairman Lim How Teck had noted that bond holders are likely to get very little in return when the company goes under judicial management, while shareholders can expect to get nothing.
Swissco's collapse comes as the energy sector tackles the most brutal oil-price downturn in 30 years.
The crunch has already claimed two casualties - Swiber Holdings and Technics Oil & Gas, which both filed for judicial management in July.
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.