Swissco selling anchor handler to reduce debt. Seeks to avoid shareholder vote
Singapore’s debt-laden offshore vessel owner Swissco is set to sell its anchor handling vessel the Coral Knight.
The company, currently managed by Interim Judicial Managers, said on Thursday it had agreed to sell the vessel to Australian Maritime Systems Asset holdings.
The vessel, built in 2014, is already on a bareboat charter with the buyer. The sale price has been agreed to $7.2 million in cash.
Since the vessel is mortgaged in favor of Oversea-Chinese Banking Corporation (OCBC), as a security for a loan taken by Swissco, all the cash from the transaction, which is subject to shareholders’ approval, will be transferred to OCBC.
Swissco said that the sale price was attractive, as the vessel’s forced sale value is estimated at $5.0 million. However, the price is below the fair market value, which is around $10 million.
The Interim Judicial Mangers said the proposed disposal would help to reduce the Swissco’s liabilities, as the proceeds will be sufficient to pay down all of the amounts to OCBC. The deal will also allow the discharge of the mortgage over another vessel owned by Swissco, named Swissco Synergy, which is also mortgaged to OCBC.
As the deal would constitute a major transaction by the Singapore Exchange rules – deeming it subject to a shareholders vote – the company said it would submit an application to SGX for a waiver of the requirement for a shareholders vote.
Explaining the rationale behind such a request, the company said that the proposed vessel sale was time sensitive, and would likely be delayed if shareholders’ approval is required, a consequence of which could be a „grave risk of foregoing an opportunity to be able to dispose of its vessel“ as agreed with the buyer, which the company views to be a more favourable alternative to a mortgagee sale that would happen if OCBC takes over the vessel by enforcing its rights under the loan agreement.
Offshore Energy Today Staff