Singapore government intervenes to save struggling offshore sector

Singapore government intervenes to save struggling offshore sector

The Singapore government has stepped in to protect the nation’s hard hit offshore marine sector.

The measures include boosting International Enterprise (IE) Singapore’s finance scheme and the reintroduction of government backed bridging loans.

The bridging loan scheme will help Singapore-based companies borrow S$5m each for a tenure of up to six years to finance their operations and bridge short-term cash flow gaps. In addition, IE’s existing Internationalisation Finance Scheme (IFS), which provides project/asset financing support for companies, will be enhanced, the release stated.

For bridging loans, the maximum loan quantum for each borrower group will be S$15m, while for IFS it will be raised to S$70m per borrower group from the current S$30m. The government will take on 70 per cent of the riskshare for both measures.

Shipyards, contractors, struggling offshore sector, exploration & production companies, oil & gas equipment and services companies and its suppliers, can apply for these schemes.

The minister for trade and industry S Iswaran commented today: “While there has been a general slowdown in economic growth, the impact has been uneven. The marine and offshore engineering industry, in particular, is facing a deep and prolonged downturn due to cyclical and structural forces.

Consequently, the industry’s financing challenges have intensified in recent months. Some industry consolidation is inevitable as companies restructure.”

The move by many Asian governments – including in China, South Korea and Taiwan – stepping in to support shipping lines and shipyards in recent months has proved controversial with many suggesting the state interventions will only serve to lengthen the shipping and offshore downturn. A survey carried in the most recent issue of Maritime CEO magazine found that 76% of the more than 600 respondents were against government interventions into the sector.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.

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