- Suppliers, creditors willing to work with KPMG, Swiber says
- Firm cites KPMG report filed to Singapore’s High Court
Swiber Holdings Ltd. said its court-appointed managers have indicated a “reasonable prospect” of saving the Singaporean energy-services company from its debt burdens.
Major suppliers, vendors and creditors are willing to work with the managers KPMG to help the troubled firm complete its ongoing projects, Swiber said in an e-mailed statement Monday, citing a report filed by KPMG to Singapore’s High Court. The auditing firm, appointed as judicial managers about a month ago, has received 24 expressions of interest including proposals from potential investors to finance Swiber’s debt and projects, according to the statement.
“The prospects for saving the Swiber group hinges on the support from stakeholders and its ability to complete some $1.67 billion worth of secured projects, which could in turn pave the way for a restructuring exercise,” the statement said. Such a restructuring “would lead to a better outcome for creditors than under a winding up scenario.”
The oil and gas-services company sought judicial management after initially applying for liquidation amid demands for repayments from creditors. The arrangement allows the company to continue operating under court supervision while the managers attempt to turn its business around. Singaporean energy-services companies are reeling from the collapse in crude prices that has curbed exploration and demand for oil and gas services.
The completion of ongoing projects would be positive for the recovery of Swiber Offshore Construction Pte, the company’s main subsidiary, the statement cited the KPMG managers as saying. SOC also has a potential order book of about $608 million of projects for which it has submitted bids, according to the statement.
The report submitted to the High Court provides details of Swiber’s cash position, information on ongoing projects and an assessment of Swiber and SOC’s ability to “generate value” for the objectives of the judicial-management process, including the rehabilitation of the companies, according to the statement.
“The fact that investors are still looking to fund companies in this situation is a positive sign,” said Neel Gopalakrishnan, an emerging markets fixed-income analyst at Credit Suisse Private Banking in Singapore. “We need to keep in mind that these are likely to be preliminary expressions of interest. Implementation risks for such deals to be finalized could be high and the time frame could be long.”
Swiber named John F. Swinden as chief executive officer on Saturday to replace Yeo Chee Neng, who resigned with effect from Sept. 2, according to a filing with the Singapore stock exchange. Yeo will continue as an adviser and will work closely with the Swiber group and its interim judicial managers, the filing showed.