Singapore's Swissco to File for Judicial Management
Singapore's Swissco Holdings, a debt-burdened provider of rig and vessel chartering services, said it has decided to file for interim judicial management after reaching an impasse with major lenders.
Many companies in the offshore oil and gas services sector - a key industry in Singapore - have been struggling to meet debt commitments after a rout in global oil prices until last year led to a scaling back of projects.
Judicial management - a process that allows a financially distressed company the room to return to financial health under court supervision - has also been sought by oilfield services firm Swiber Holdings.
"A significant gap persists between the group's aim of sustaining its business in the long term and the position of these lenders. As such, the Group is unable to get an agreement on the terms of the restructuring plan," Swissco said in a stock exchange filing late on Monday.
In October, loss-making Swissco failed to pay interest on a S$100 million ($71 million) note due in 2018 while total debt stood at $255.7 million at end-September.
Swissco said it is currently seeking legal advice on the preparation and filing of the necessary court documentation, which is expected to take place by the end of this week or early next week.
The company named DBS Bank, Oversea-Chinese Banking Corp and United Overseas Bank as its principal bankers in its 2015 annual report.
The Group is expected to report a net loss for the third quarter and also the nine months of 2016 compared to a profit recorded in the corresponding period last year. The expected loss is primarily due to the impairments on its fleet of vessels, rigs and receivables. Additionally, two of its 100 percent owned drilling rigs and two 50 percent jointly-owned drilling rigs continue to be off-charter which has also adversely affected the performance of the Group.
Trade in the company's shares has been suspended since October 12.