Singapore’s struggling offshore vessel owner attracts $200M investment
Containership giant Seaspan has pledged to invest $200 million into Singapore’s offshore construction and services firm Swiber in a deal that said could pave the way for Swiber’s recovery.
The two companies signed a binding term sheet on Wednesday, under which Seaspan would invest up to $200 million in two stages. Swiber, under judicial management since 2016, last year started working on an LNG-to-power floating solution.
The company has designed the “Gen Blue” floating LNG power plant seeking to integrate the storage of LNG, regasification, and gas-fired power plants onto a single vessel. This is a something Seaspan has identified as attractive.
According to a statement on Tuesday, Seaspan will in the first stage invest US$20 million in cash for new ordinary shares in Swiber which will give it control of 80% of Swiber’s enlarged share capital, taking into account shares to be issued to unsecured creditors under a debt restructuring scheme.
The remaining $180 million will be invested by way of subscription of new preference shares to be issued by Swiber’s wholly-owned subsidiary, Equatoriale Energy Pte. Ltd. This will be subject to Swiber meeting certain milestones relating to the development of a $1 billion LNG-to-power project in Vietnam.
It is intended that the US$20 million will be used towards funding the development of the Vietnam power project, while the remaining US$180 million will be deployed to fund the construction, operation and maintenance of the power project and/or such other purposes as may be agreed between Swiber and Seaspan.
Swiber will be required to restructure all debts and liabilities by converting them into new Swiber shares (for unsecured debts) or secured redeemable convertible bonds for secured creditors.
New chapter in LNG-to-Power
Judicial Manager Bob Yap, who is also Head of Advisory at KPMG in Singapore, said: “The conventional oil and gas sector has faced difficult conditions in recent years. However, with growing demand for power in Southeast Asia, there are substantial opportunities for companies to develop clean energy solutions such as power generated from LNG. Against this backdrop, we are delighted that a reputable and established company like Seaspan has chosen to invest in Swiber. We believe that this deal offers a step forward in reviving Swiber as a going concern, and delivering a positive outcome for creditors and shareholders.”
Yap added that Swiber’s Executive Chairman Raymond Goh and his team, in efforts to diversify the Group’s business, have spent the last three years focussing on LNG-to-power opportunities in the region.
Seaspan President and Chief Executive Officer Bing Chen said: “We are excited to partner with Swiber. Together, with Swiber’s operational and engineering capabilities, Seaspan’s leading maritime asset management platform, and our Chairman David Sokol’s energy-related expertise, we will unlock substantial value.”