Singapore-listed Vallianz Holdings yesterday took pains to outline the various ways in which it has reduced its dependence on its controlling shareholder Swiber Holdings, which is struggling to survive under judicial management.
The announcement lifted Vallianz's share price by 0.2 cent or 9.1 per cent to 2.4 cents. It was also the day's most active counter on the Singapore Exchange, with 124.3 million shares changing hands.
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 (S$34.7 million) worth of demands from creditors. The next day, it abruptly withdrew this application to pursue judicial management.
News of the winding-up application caused Vallianz shares to tank nearly 42 per cent or 1.5 cents to 2.1 cents last Thursday. They rebounded 4.8 per cent or 0.1 cent to 2.2 cents on Friday.
Vallianz yesterday said 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.
While the recent developments at Swiber will have an impact on the group's business, the board is of the view that the situation is manageable and its operations are continuing as usual.
It also noted the proportion of its revenue from Swiber entities fell to 20 per cent at end-March from 34.6 per cent in 2015, due to its focus on growing its chartering and brokerage business with third-party customers.
It said it has the strong support of its joint venture partner and shareholder Rawabi Holding Company, 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 at March 31, it had trade and other receivables owing from Swiber entities of US$61.9 million. It also had trade payables and other payables owing to Swiber entities of about US$58.7 million.
Vallianz said that "while the recent developments at Swiber will have an impact on business, the board is of the view that the situation is manageable and its operations are continuing as usual".
It is working with legal advisers to evaluate the impact of developments at Swiber.