The judicial managers of troubled marine engineering group Swiber Holdings (SHL) and Swiber Offshore Construction (SOC) recommended creditors vote in favor of the restructuring proposal at its meeting on 29 May, it said in a filing to SGX on Tuesday.
”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 in the statement.
If the restructuring plan isn’t approved, the alternative would be liquidation, the judicial managers said, adding unsecured creditors would likely not recover anything.
More than 1,200 creditors, including bondholders, are eligible to vote at the meeting, the filing said.
The restructuring proposal includes an investment of up to US$200 million from Seaspan Corp. in a deal that would transfer the assets of the existing Swiber Group to “New Swiber,” the filing said.
Under the plan, certain secured creditors will be issued US$120 million of redeemable convertible bonds in connection with the proposed transfer of assets to New Swiber, while 14 percent of New Swiber’s shares will be issued to unsecured creditors, the filing said.
If all of the secured creditors convert their convertible bonds into shares, they would hold around 10 percent of New Swiber, the filing said. That would dilute the unsecured creditors’ stake to 12.6 percent, while existing shareholders of SHL would have 2.7 percent, it said.
If the restructuring is approved, New Swiber is projected to have an equity value of US$1.2 billion to US$1.4 billion at the end of a five year period, for an estimated recovery rate of 8.8 percent to 10 percent for SHL’s unsecured creditors and 1.0 percent to 1.2 percent for SOC’s unsecured creditors, the filing said.
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