The Singapore government may step in to save some of its struggling offshore firms, global auditing firm EY has told Bloomberg. The city-state is still struggling with the news that oilfield services firm Swiber Holdings filed for judicial management three weeks ago, something that has spooked investors and banks alike.
“It’s possible that off-budget measures may be introduced, as the government has done previously, to help these businesses tide over the slowdown should economic conditions worsen,” Chia Seng Chye, a tax partner at EY in Singapore, told the financial newswire.
A recent report from UBS shows that some 28% of the S$18bn in corporate bonds due over the next 18 months are from industries facing structural headwinds.
“In the absence of further bank support, refinancing this debt may prove difficult, potentially leading to more defaults over the next year,” analysts Devinda Paranathanthri and Clarissa Lee wrote. “The bond market is currently not open to issuers from troubled sectors such as oil and gas, industrials, transportation, and metals and mining.”
Commenting on the news, Andre Wheeler, Splash’s lead offshore opinion writer, said: “It looks like they will follow the same path as South Korea. I wonder if there will be same outcry from the market.”
The South Korean government’s decision to pour billions of dollars into its ailing shipyards and shipping lines has drawn enormous flak this year from the general public and opposition political parties.