Swiber creditors approve restructuring proposal, a key step toward Seaspan investment

Singapore five-dollar note Photo by Leslie Shaffer

Creditors of Swiber Holdings (SHL) and its subsidiary, Swiber Offshore Construction (SOC) approved Wednesday a restructuring proposal, marking a key step toward an equity investment from New York-listed Seaspan Corp.

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.”

Around 83 percent of SHL’s creditors, representing 75.86 percent by value of claims present and voting, approved the restructuring proposal, while 77 percent of SOC’s creditors, representing 97.5 percent by value of claims present and voting, approved it, Swiber said in a filing to SGX Wednesday.

“The mandate given by creditors today is positive news for Swiber, providing the company an opportunity to be rehabilitated with the proposed investment from Seaspan,” Bob Yap, the judicial manager and KPMG’s head of restructuring in Singapore, said in the statement.

“While there is still much to do in the restructuring process, including obtaining shareholders’ and regulatory approvals, we believe this is a positive step towards achieving a successful restructuring,” Yap added.

Under the restructuring proposal, Seaspan will invest in Swiber in two tranches.

In the initial tranche, Seaspan will invest US$10 million in exchange for an 80 percent interest in New Swiber, which will own certain assets of the existing Swiber Group, including five vessels.

The second tranche of US$190 million will be used to subscribe for preference shares of Equatoriale Energy, a wholly owned subsidiary of Swiber, once its LNG-to-power project in Vietnam reaches its development stage and achieves project milestones. The LNG power plant is expected to cost around US$1 billion to build.

“It is envisaged that the New Swiber group will be an innovative energy solution provider with engineering capabilities across the power, oil and gas and marine sectors,” Swiber said in the filing Wednesday. “It is currently envisaged that the New Swiber group will continue with Swiber’s current business of vessel chartering and engineering services while diversifying into the power business.”

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