There is hope for Swiber, Interim Judicial Managers say

Singapore’s Swiber, a debt-laden offshore services provider, could be saved, according to the recently appointed Interim Judicial Managers (IJM).

According to a report issued Monday, the IJM’s said that the prospects of saving Swiber hinge on the support from stakeholders and its ability to complete some $1.67 billion worth of secured projects.

If successful, this could, in turn, pave the way for a restructuring exercise that the Interim Judicial Managers (IJMs) said would lead to a better outcome for creditors than under a winding up scenario. In a report filed in the High Court on Friday, the IJMs said key stakeholders, including major suppliers, vendors, and creditors, have expressed willingness to work with them to support the completion of the ongoing projects.

The IJMs pointed out that the Swiber Group’s key strengths are in the engineering and construction of upstream projects, and completing projects it had already won would be a crucial milestone. This would be value accretive and positive for the recovery of Swiber Offshore Construction Pte Ltd (SOC). SOC, the Group’s main operating subsidiary, also has a potential order book of about $608 million for projects which it has submitted bids.

The key personnel of SOC are still intact and have the necessary experience and credentials to complete these projects. The IJMs, led by Bob Yap, Head of Advisory at KPMG in Singapore, also disclosed that they have so far received 24 expressions of interest, including proposals from potential investors to provide equity/debt financing, asset financing, and project financing.

They will evaluate such expressions of interest together with Swiber’s management. Yap said: “We are hopeful that the support of the various stakeholders for Swiber to complete ongoing projects together with our proposed restructuring plan, will help turn around the situation and lead to a better outcome for all stakeholders.” 

The IJM report provides the High Court with details of the companies’ cash position, information on ongoing projects and an assessment of Swiber Holdings’ and SOC’s ability to generate value for one or more of the objectives of judicial management, including the rehabilitation of the companies. The report was filed at the direction of the Court during Swiber Holdings’ and SOC’s application for judicial management in July 2016.

The IJMs believe that under their plan, there is a “reasonable prospect” of achieving one or more of the three objectives of a judicial management, which are: i) the survival of the company, or the whole or part of its undertaking as a going concern; ii) the approval under Section 210 of the Companies Act of a scheme of arrangement between the companies and/or their creditors; and iii) a more advantageous realisation of assets would be effected than in a winding up.