Swiber said on Wednesday that it agreed to a proposed US$200 million investment from containership operator Seaspan in a deal that will bolster the troubled offshore construction company’s LNG power project in Vietnam.
“We believe that this deal offers a step forward in reviving Swiber as a going concern, and delivering a positive outcome for creditors and shareholders,” Judicial Manager Bob Yap, who is also head of advisory at KPMG in Singapore, said in the statement.
“The conventional oil and gas sector has faced difficult conditions in recent years. However, with growing demand for power in Southeast Asia, there are substantial opportunities for companies to develop clean energy solutions such as power generated from LNG,” Yap said.
Under the proposed deal, Seaspan will make the investment in two tranches, with the first an initial US$20 million in cash in exchange for new ordinary Swiber shares giving the NYSE-listed company 80 percent of the Singapore company’s enlarged share capital, it said in the filing to SGX after the market close on Wednesday.
That 80 percent stake would take into account shares to be issued to unsecured creditors under Swiber’s debt restructuring plan, it said.
The remaining US$180 million will be invested in a subscription for new preference shares to be issued by Equatoriale Energy, a wholly owned subsidiary of Swiber, it said. This portion of the deal would be subject to Swiber meeting milestones on the development of a US$1 billion LNG-to-power project in Vietnam, it said.
The first US$20 million will be used toward funding the Vietnam power project, while the remainder will be used for the project’s construction, operation and maintenance, it said.
Seaspan President and CEO Bing Chen said in the statement, “with Swiber’s operational and engineering capabilities, Seaspan’s leading
maritime asset management platform, and our Chairman David Sokol’s energy-related expertise, we will unlock substantial value.”
The deal requires Swiber to restructure all its debts and liabilities by converting unsecured debt into new Swiber shares and providing secured redeemable convertible bonds to secured creditors, it said.
This article was originally published on Wednesday, 3 October 2018 at 20:29 SGT; it has since been updated.