Singapore Plans $1B in Loans for Maritime Firms
Singapore plans to offer financial assistance to its liquidity-hit marine and offshore engineering companies that could help them raise as much as S$1.6 billion ($1.1 billion) in loans.
The two-year downturn in oil prices has forced several firms, including oilfield services firm Swiber, oil and gas service provider Swissco Holdings Ltd and container ship owner Rickmers Maritime, to seek restructuring of their debt.
Billions of dollars have been wiped off the market value of the sector's listed companies and thousands of jobs have been axed in the worst-hit area of Singapore's slowing economy.
Many of the companies in the affected sectors have not been able to issue debt or get bank loans.
Singapore's Ministry of Trade and Industry (MTI) said in a statement on Friday the loans it is organising will be available from next month and could "catalyse" about S$1.6 billion in total financing to the sector over the next year.
The MTI said it will introduce a scheme allowing affected companies to borrow up to S$5 million for up to six years. A borrower group can tap financing of up to S$15 million.
A separate finance scheme aimed at assisting with project and asset financing support will be enhanced so that the maximum loan will be raised to S$70 million per borrower group from the current S$30 million, it said.
The statement did not provide any details on the financing costs. The facilities will be administered by government agencies SPRING and IE Singapore through local banks. The government will take 70 percent of the financing risk for both the schemes.
"The industry's financing challenges have intensified in recent months. Some industry consolidation is inevitable as companies restructure and adapt to the challenging environment," Minister for Trade and Industry S Iswaran said.
"The government will continue to monitor the economy closely and stands ready to act if necessary."
Those that qualify for the scheme include shipyards and their contractors, exploration, production and offshore services firms, oil and gas equipment and services companies and their suppliers.