Help is at hand for marine and offshore engineering firms here battered by persistently low oil prices and a weak global economy.
The Ministry of Trade and Industry (MTI) yesterday unveiled two measures to give the sector a financial shot in the arm as it reels from bond defaults and heavy debt.
One measure involves a dramatic boost to trade agency IE Singapore's finance scheme for the sector. The other is the reintroduction of Spring Singapore's bridging loan scheme, said a joint statement by the MTI, IE Singapore and Spring.
Both schemes aim to help marine and offshore firms - from shipyards to offshore services providers, as well as oil and gas equipment and services companies and their suppliers - gain access to vital working capital and financing.
Funds available under IE Singapore's internationalisation finance scheme, which provides project or asset financing support for companies, will be more than doubled to $70 million per borrower group from the current $30 million.
The bridging loan scheme will help Singapore-based firms borrow up to $5 million each for a maximum of six years to finance operations and bridge short-term cash flow gaps. The maximum loan for each borrower group is $15 million. The Government will take on 70 per cent of risk for both schemes.
The one-off measures, developed in consultation with industry players, aim to stabilise the sector.
"These targeted measures aim to help preserve the marine and offshore engineering industry's core capabilities which have been built up over the years and will be important to seize future opportunities," Minister for Trade and Industry (Industry) S. Iswaran said. "The Government will continue to monitor the economy closely and stands ready to act if necessary."
The oil market slump has affected several companies in Singapore, a hub for shipbuilding and offshore support firms. Oil services firm Swiber Holdings went into judicial management this month.
The Singapore Business Federation (SBF) said the measures are timely. "It is uncommon for the Government to target financial support for a specific sector. That it is doing so now for the marine and offshore engineering sector reflects the gravity of the situation," said SBF chief executive Ho Meng Kit.
But he advised the industry not to see the relief as a silver bullet which would solve the industry's woes.
Berlitz Offshore & Marine Group's chief executive Chan Kern Miang hailed the schemes as a "practical and visionary" move by the Government to address the needs of firms in the sector, particularly the smaller players. "Our hope is for participating financial institutions to align their internal assessment benchmark with the overall objective of these schemes, that they will be willing to nurse struggling companies back to health and be part of their recovery - and even growth story."
The schemes will be available from next month and could lead to about $1.6 billion of loans over one year.
• Additional reporting by Jacqueline Woo