Having only obliquely referenced the company before the Singapore Exchange (SGX) finally came out and lashed Swiber Holdings yesterday. Singapore-listed Swiber’s demise at the end of July sent ripples across the local offshore scene. The SGX has now publically reprimanded Swiber for a breach of listing rules, specifically for failing to provide a “balanced and fair” announcement in relation to a $710m project award.
“The relevant listing rule requires a company’s announcement to be balanced and fair, and to avoid, among other things, presentation of favourable possibilities as certain, or as more probable than is actually the case,” SGX explained in a release.
On December 15 2014, Swiber made an announcement entitled, “Swiber Breaks Into the West African Market with US$710 Million Field Development Award”. The announcement stated that Swiber had secured a $710m project award from a Houston-based oil and gas company to provide Engineering, Procurement, Construction, Installation and Commissioning services for an offshore field development project. Swiber disclosed that it would commence work on the Project from the first quarter of 2015 and completion was expected to take place in the middle of 2017. In the same announcement, Swiber disclosed that for the year-to-date as of 15 December 2014, it had clinched contracts totalling $1.03bn.
On 8 July 2016, Swiber announced that the project has not been able to progress in accordance with its original schedule and that Swiber and its subsidiaries have not recognised any revenue from the project.
On reviewing the letter of intent (LOI) signed between Swiber and the client, the SGX was unimpressed. The LOI states that a contract document would be signed subsequent to the completion of the pre-FEED and FEED study. The initial estimated contract price of $710m would be reviewed and the final price determined after the conclusion of the FEED study and on finalisation of the field development plan.
“SGX is of the view that the announcement is not balanced and fair as Swiber presented favourable possibilities as certain, or as more probable than is actually the case,” the exchange said in a release.
SGX has referred the case to the relevant authorities.