Swiber Files for Liquidation as Singapore Probes Lapses

  • Company faces letters of demand from creditors, project delays
  • Singapore Exchange is undertaking ‘thorough investigation’

Swiber Holdings Ltd. filed a petition to wind up and liquidate the company after facing demands from creditors amid a slump in offshore oil and gas businesses. The Singapore stock exchange said it’s investigating potential lapses in disclosure.

The company said it made the application on July 27 to a Singapore high court, with a hearing set for Aug. 19, according to its stock exchange filings early Thursday. It also filed an application to place itself in provisional liquidation and the court named Cameron Lindsay Duncan and Muk Siew Peng of KordaMentha Pte. as joint provisional liquidators.

Singapore’s bond market has been stunned by defaults after PT Trikomsel Oke and Pacific Andes Resources Development Ltd. failed to make payments on three notes totaling S$415 million ($307 million) since late 2015, the first cracks since 2009. Oil-related firms face S$1.4 billion of Singapore dollar securities maturing through 2018, with S$325 million due by year-end, according to Bloomberg-compiled data on July 18. Ten Singapore-listed firms including Swiber have asked bondholders to loosen their bond covenants this year versus eight in all of 2015.

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Swiber’s collapse came as a surprise to some analysts after the company repaid S$130 million of notes on June 6 and S$75 million of debentures earlier this month. The company still has four local-currency bonds and one yuan-denominated note outstanding, according to Bloomberg data. The group had $1.43 billion of liabilities on March 31 and $1.99 billion in total assets on March 31, according to its latest quarterly accounts.

“The market was expecting the banks to put something together because the word on the street was that Swiber was too big to fail given the amount of debt involved,” said Terence Lin, assistant director of bonds and portfolio management at the Singapore-based fund researcher iFast Corp. “The banks probably decided not to throw good money after bad.”

Investigation

Swiber is an integrated offshore construction and support services provider for shallow water oil and gas field development, according to its website. Founded in 1996, the group operates 13 construction vessels and employs about 2,700 employees worldwide.

Swiber’s S$160 million 7.125 percent 2017 notes were quoted at 35 cents to 45 cents on the dollar, according to DBS Bank prices, compared with 62 cents this week and about 70 cents at the end of 2015. The company’s shares traded at S$0.109 in Singapore before their suspension on Wednesday, having lost 48 percent in value this year. Shares in its unit Vallianz Holdings Ltd. plunged as much as 56 percent today.

Swiber’s court action follows its disclosure that it has received $25.9 million in letters of demand from creditors as of July 26. On July 25, it said some projects were delayed. Singapore Exchange Ltd., which operates the local bourse, said it’s undertaking a “thorough investigation” into the developments.

“SGX would like to remind the market that shareholders have a right to be kept well-informed at all times, particularly when companies are facing business adversities,” SGX Chief Regulatory Officer Tan Boon Gin said in a statement Thursday. “The company and relevant individuals should expect us to take action if any breach of the listing rules is found.”

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