Singapore Shipbuilder Says Australian Units Face Court Actionby
Two units face winding-up applications from three creditors
Otto Marine says management plans to dispute the debts
A Singapore-listed builder of ships that service offshore oil and gas facilities said some creditors are seeking to wind up its subsidiaries in Australia, adding to signs of strains in an industry beset by energy price declines.
Otto Marine Ltd. said three creditors filed three such applications with the Supreme Court of Western Australia to wind up Go Inshore Pty and Go Marine Group Pty. The total claimed against the units is A$787,204 ($599,220), according to a filing to the stock exchange. The management of Go Marine Group is seeking legal advice and plans to dispute the debts. The cases will be heard on Nov. 8, it said.
A slump in crude amid slowing global economic growth has hurt Singaporean borrowers in the oil services industry facing a mountain of debt, taking a toll on a country where the marine and offshore industry provides about 19 percent of manufacturing jobs. Swiber Holdings Ltd. roiled the local bond market when it defaulted on its local-currency notes last month. Shipping companies have also stumbled, with Marco Polo Marine Ltd. and Rickmers Maritime having said they’re seeking leniency on debts.
Otto Marine extended the maturity of its S$70 million ($51.4 million) of bonds by six months to February 2017, it said in a July 27 statement. The price of those securities has dropped to about 80 cents on the Singapore dollar from issuance at 100 cents in 2014, according to data compiled by Bloomberg.
The shipbuilder said in that filing that it would redeem the notes within 14 days from the delisting of the company’s shares. Closely held Ocean International Capital Ltd. said in a Sept. 19 filing that conditions for its offer to delist Otto Marine have been fulfilled.