Swiber Drops Liquidation Plans Following Talks With Creditor

  • Company’s creditors said to prefer judicial management option
  • Swiber had filed wind-up and liquidation petition on Wednesday

Swiber Holdings Ltd., the Singapore-based offshore oil and gas services group, said it is dropping liquidation plans and intends to restructure its business following talks with the company’s major financial creditor.

Swiber plans to operate under so-called judicial management, according to a statement to the Singapore exchange Friday. The arrangement would allow the company to continue operating under court supervision while attempting to turn around the business. Some of its lenders had sought judicial management to recover more of their loans, according to people familiar with the talks who asked not to be identified because the discussions were private.

Swiber on Wednesday filed a petition to wind up and liquidate itself after facing $25.9 million of demands from creditors. The company had $1.43 billion in liabilities and $1.99 billion in assets at the end of March, according to its financial statements.

News of Swiber’s liquidation plans dragged down the SGX Oil & Gas Index to a new low. Local companies that rely on contracts within the offshore oil and gas market are reeling from a collapse in oil prices. Last year, a measure of the country’s bad-loan ratio reached the highest level since 2009, according to the Monetary Authority of Singapore.

‘Thorough Investigation’

The Singapore bourse said Thursday it will be undertaking a “thorough investigation” into developments at Swiber after the company made key disclosures only after queries from the regulator. Swiber on July 11 said it failed to get a $200 million equity injection from AMTC Ltd., which had agreed to subscribe topreference shares.

DBS Group Holdings Ltd., Southeast Asia’s biggest lender, said Thursday it has about S$700 million ($523 million) in total exposure to Swiber. The bank said it expects to recover half of that amount.

Swiber in June redeemed S$130 million of 5.125 percent notes and in July redeemed S$75 million of 7 percent securities. It has four more Singapore dollar bonds worth a total of S$460 million outstanding, according to data compiled by Bloomberg.

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