The prospects for saving Swiber Holdings hinges on the support from stakeholders and its ability to complete some US$1.67bn worth of secured projects, which could in turn pave the way for a restructuring exercise that the interim judicial managers (IJMs) have said would be 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.
Singapore-listed Swiber sought judicial management at the end of July causing a rout on other offshore-related stocks on the local exchange.
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 (SOC).
SOC, the group’s main operating subsidiary, also has a potential orderbook of about $608m 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 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: the survival of the company, or the whole or part of its undertaking as a going concern; the approval under Section 210 of the Companies Act of a scheme of arrangement between the companies and/or their creditors; and a more advantageous realisation of assets would be effected than in a winding up.
The report by the IJMs came out, however, just as the group’s president and ceo, Darren Yeo, resigned, providing another test for the group if it is to survive.