The judicial managers of troubled marine engineering group Swiber Holdings and Swiber Offshore Construction have called on creditors to vote in favour of the restructuring proposal by Seaspan in an upcoming creditor meeting at the end of this month.
At the end of March, Swiber Holdings, which has been in judicial management for the past two years, signed a surprise $200m investment agreement with Canadian boxship leasor Season Corporation.
Under the agreement, Seapsan will invest $10m to take an 80% shareholding interest in a new holding company to be incorporated into which certain assets of the existing Swiber Group will be transferred, while a further $190m will be used to subscribe for preference shares in Equatoriale Energy, a wholly-owned subsidiary of Swiber, upon securing a development stage LNG-to-power project in Vietnam and achieving major project milestones.
“We recommend that creditors of SHL and SOC vote in favour of the restructuring proposal, which if implemented, is likely to yield a better outcome for the creditors of SHL and SOC as compared to a liquidation scenario,” Bob Yap, head of restructuring at KPMG in Singapore and the judicial manager, said yesterday.
According to the company’s stock filing, if the restructuring is approved, New Swiber is projected to have an equity value of $1.2bn to $1.4bn at the end of a five year period, for an estimated recovery rate of 8.8% to 10% for Swiber Holdings’s unsecured creditors and 1% to 1.2% for Swiber Offshore Construction’s unsecured creditors.
If the restructuring plan isn’t approved, the alternative would be liquidation.
More than 1,200 creditors, including bondholders, are eligible to vote at the meeting on May 29.