Singapore Court Grants Judicial Management to Swiber

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October 6, 2016

Photo credit: Swiber Offshore

By David Yong

(Bloomberg) — Swiber Holdings Ltd., the Singapore-based firm that roiled the local bond market when it defaulted in August, has been put under judicial management while it reorganizes debt.

The high court in the city-state granted applications by Swiber Holdings, which helps build offshore oil platforms, and by its unit Swiber Offshore Construction Pte to put both firms under judicial management, the court said. The judicial managers should file updates to creditors every six weeks, unless they call meetings within 60 days, according to the court order.

The slump in oil prices has hurt Singapore, which relies on the marine and offshore industry for about 19 percent of manufacturing jobs. The local-currency bond market has had three default cases involving S$875 million ($638 million) of bonds. At least eight companies in the shipping and oil and gas services industry, including Rickmers Maritime and Marco Polo Marine Ltd., are seeking leniency from creditors on their debt load.

Swiber’s S$160 million of 7.125 percent notes due 2017 were indicated at 12 cents on the dollar, according to prices from DBS Bank Ltd. The stock fell 48 percent this year through July 27, when they here halted on the Singapore Exchange.

The Monetary Authority of Singapore said last month it is working to boost investor safeguards by year-end, while the government plans to enhance legal provisions for debt restructuring. The local authorities are also tightening oversight of private banks and aiding businesses mired in the slump.

Swiber had $1.43 billion of liabilities and $1.99 billion of assets on March 31 before it sought court protection in late July, according to its last published accounts. It should be able to raise about $284 million of working capital to sustain its operations, including through asset sales, according to a Sept. 2 report to court submitted by its then-interim judicial managers.

© 2016 Bloomberg L.P

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