Swissco Holdings has followed fellow Singaporean offshore firm Swiber Holdings into interim judicial management as creditors rejected its restructuring plan and debts have continued to mount.
Swissco said in a release it had reached an “impasse” with its major lenders.
“A significant gap persists between the group’s aim of sustaining its business in the long term and the position of these lenders,” Swissco explained.
The judicial management move, Swissco said, should help it either survive, find a scheme of arrangement with creditors of get a more advantageous realisation of assets than in a winding-up.
Swissco notched up a $296m loss in its most recent Q3 results.
The restructuring plan, first presented on October 24, asked noteholders to accept a debt for equity deal, while seeking bank refinancing , and moving to scrap four of its rigs which lay idle.
Adding to its woes, X-Drill Holding last week obtained a court order in the Republic of Equatorial Guinea for the arrest of four of Swissco’s jackup rigs.
Swissco, originally an OSV operator, diversified into rigs in mid-2014 just ahead of global oil prices plunging.
Swissco is weighed down by $147.5m in debts with just $1.2m in cash, unable to make key repayments.
When Swiber filed for judicial management in July it sent many other Singapore offshore stocks into a tailspin.
“The OSV market and marine service provider market is becoming increasingly messy and under financial pressure. This step by Swissco will place increasing pressure on the likes of Ezion Holdings and Triyards, both of which have interests in Swissco. I don’t think it is going to be too long before we start getting a domino effect in Southeast Asia with companies soon to collapse under the financial strains,” said Splash offshore columnist Andre Wheeler.