SINGAPORE - Singapore-listed Vallianz Holdings took pains on Monday (Aug 1) to outline the various ways in which it has reduced its dependence on its controling shareholder Swiber Holdings, which is now struggling to survive under judicial management.
Swiber, which holds 25.15 per cent of Vallianz, stunned markets last Thursday with a winding up application after being hit with US$25.9 million worth of demands from creditors. But On Friday, it abruptly withdrew this application to pursue judicial management.
A day earlier on Wednesday, Vallianz announced that its non-executive director and chairman, Raymond Kim Goh, 48, had resigned due to "health reasons". Mr Goh is also the executive chairman and founder of Swiber.
Vallianz on Monday said that its US$1.2 billion order book reported in May comprises mainly contracts with third-party customers in the Middle East that are not related to Swiber and its subsidiaries, joint ventures or associates.
It also said it has the strong support of its joint-venture partner and shareholder, Rawabi Holding Company Limited, which has extensive knowledge and connections in the Middle East oil and gas market. Rawabi has an 18.7 per cent equity stake in Vallianz.
As a result of its focus on growing its chartering and brokerage business with third party ol and gas customers, Vallianz said has also cut its dependence on Swiber entities as a source of revenue.
The proportion of revenue from Swiber entities fell to 20 per cent at end-March from 34.6 per cent in financial year 2015.
Vallianz said it plans to release its half-year results on or before Aug 14.
The company also reiterated that its core vessel chartering business is continuing as usual, and that its long-term charter contracts with its third party customers are still ongoing.
As at March 31, 2016, the group had trade receivables and other receivables owing from Swiber entities amounting to US$61.9 million. It also had trade payables and other payables owing to Swiber entities of approximately US$58.7 million.
Summing up, Vallianz said: "While the recent developments at Swiber will have an impact to the group's business, the board is of the view that the situation is manageable and its operations are continuing as usual."
It added that it was working in close consultation with its legal advisors to evaluate the impact of the developments at Swiber.
"The company would like to assure shareholders that it will make further announcements on any material developments as and when appropriate."