BONDS: Swiber to wind up, biggest Singapore casualty of oil slump

2 min read
Asia

Singapore oil field services firm Swiber Holdings filed an application to wind up the company and said a Singapore court had appointed provisional liquidators, making it the biggest local name to fall victim to the slump in oil prices.

In a statement to the Singapore Exchange, Swiber said the hearing to wind up the company has been set for August 19.

Swiber, which operates a fleet of 51 vessels, did not give any specific reason for the move but said it was facing letters of demand for US$25.9m and had warned earlier this month of delays in raising US$200m in preference shares.

Local oilfield services companies have been burdened by weak oil prices, which have strained their liquidity, with charter rates tumbling and clients either delaying or cancelling projects.

“If highly leveraged offshore and marine companies are unable to raise capital from equity markets, then they will be left with very little other options other than to file for liquidation or for judicial management,” said Joel Ng, an analyst at KGI Fraser Securities.

Over the next year and a half, bonds totalling nearly S$1.2bn (US$881m) from energy and offshore marine issuers in Singapore will mature, with S$615m due over the next five months, according to IFR.

Another firm, Technics Oil & Gas Ltd, and its unit were placed under judicial management this month.

Investors had turned more positive on Swiber after it redeemed two bonds in June and July totalling S$205m.

Swiber said this month a preference share sale agreement for US$200m had been delayed and that it was seeking legal advice. But a flood of letters of demand, including statutory demands, had flowed in since Monday, claiming a total US$25.9m as of July 26 and adding more pressure on the company.

Swiber said some of its executive directors, including its chief financial officer, had resigned.

From just 10 vessels in 2006, Swiber has expanded to own and operate a fleet comprising 38 offshore vessels and 13 construction vessels. It has more than 2,700 employees across South-East Asia and other countries, according to its website.

Swiber’s longest dated bond due 2018 started falling sharply in mid-March. The provisional liquidators of the company, which has a market value of S$50m, have asked for trading in Swiber’s shares to be suspended.

The High Court of Singapore appointed KordaMentha’s Cameron Lindsay Duncan and Muk Siew Peng as the joint and several provisional liquidators of the company.