Swissco judicial management bid gets High Court nod

Singapore

SINGAPORE'S High Court has approved Swissco group's judicial management (JM) application after a court hearing on Friday found no objections against the motion.

The court ruling effectively places Singapore-listed Swissco Holdings and its asset-holding subsidiary, Swissco Offshore Pte Ltd, under the care of judicial managers from EY.

A third interim judicial managers (IJM) report argued that the JM process may yield a more advantageous realisation of the sale of assets over a winding-up scenario.

The report also stated that in the event Swissco's offshore support vessel (OSV) business can be sold, the group or a part of the group may continue as a going concern.

The court heard that Swissco's newly minted judicial managers had received six indicative offers for the assets or businesses of the group. Swissco JM Angela Ee told The Business Times that these six offers include one written, firm offer for the entire OSV business of the listed group.

BT understands that the OSV business comprise all 26 vessels owned by Swissco Offshore and other subsidiaries plus two leasehold yards.

The JMs have separately received offers from interested parties to buy two vessels of Swissco's remaining fleet.

But Ms Ee clarified that the JMs were more inclined towards selling the entire OSV business as "a going concern", which would create more stakeholder value. The three local banks - DBS Bank, OCBC Bank and United Overseas Bank - are said to be among six senior lenders backing the OSV fleet of Swissco.

UOB is said to be the single-largest creditor with roughly US$100 million in exposure to the group. The bank is understood to have extended provisions for its loans to Swissco under its FY16 financial statements. In January, the then IJMs from EY had appointed Norway's Pareto Group to exclusively market all or parts of the assets of Swissco and Swissco Offshore.

Ms Ee said that the US$7.2 million deal on the table for the divestment of Swissco OSV Coral Knight is still pending approval from the Singapore Exchange.

She also mentioned that a second deal for the sale of Swissco's interests in four rigs to joint venture partner Ezion Investment Pte Ltd is expected to be completed by the end of April.

BT understands that about S$3.5 million in cash from the disposal of a 50 per cent interest in one rig-owning entity, Strategic Offshore Limited, is already in the bank.

In addition, Swissco's wholly-owned subsidiary, Scott & English Energy Pte Ltd (S&E), will receive S$1.5 million in cash from Ezion for the disposal of a 50 per cent interest in Strategic Excellence Ltd. Subject to certain terms of a subsequent deed between the two parties, S&E will potentially receive up to US$5.75 million more in cash.

Ms Ee said that over 90 per cent of Swissco's creditors present at a meeting held in March voted in favour of accepting Ezion's offer. The vote was cast after the then IJMs recommended to go with the Ezion offer instead of waiting out a last-minute, non-binding offer from an unidentified party.

The IJM report stated that Swissco Offshore has US$1.04 million of cash as at March 31 2017. As at Sept 30 2016, the listed holding company had US$291.5 million in total liabilities, including S$100 million of outstanding notes.

OSV-focused Swissco is the second Singapore-listed O&M counter to take the JM route after Swiber Holdings.

The listed OSV player unveiled its applications to be placed under JM after slipping into negative equity on US$296 million of impairment and losses from associates.