Thirteen lenders extended over US$736m of facilities to Swiber group

Singapore

THIRTEEN banks and financial institutions have extended Swiber Holdings and its subsidiaries banking facilities totalling more than US$736 million, an affidavit obtained by The Business Times from Tuesday's court hearing on the judicial management application filed by the listed offshore and marine (O&M) group has showed.

A list of banking facilities in the affidavit confirmed earlier reports by The Business Times, which had flagged DBS Bank as the largest creditor to Swiber. United Overseas Bank (UOB) came in a distant fourth with over US$35 million, after China Development Bank with over US$131 million and Mumbai-based ICICI Bank with over US$50.9 million.

A significant number of DBS's bank facilities are tied to ongoing projects Swiber has secured with India's Oil & Natural Gas Corporation.

DBS has a property loan tied to Swiber's business office. The bank - as well as UOB - are involved in several vessel loans on Swiber's operating fleet.

Also on the list are international lenders including Deutsche Bank, HSBC, Citibank and AFC, along with Kuala Lumpur-listed Maybank. Amex, GE-PK AirFinance, Hitachi and IBM have been named in association with certain financial services including hire purchases extended to Swiber. According to the list, the exposure of each of these international banks or financial services providers is capped at under US$17 million.

The list validated an OCBC executive's statements suggesting the bank has not extended loans to Swiber. BT also confirmed that Bob Yap Cheng Ghee and Ong Pang Thye of KPMG Services Pte Ltd were appointed as the joint judicial managers following the High Court hearing.

The High Court on Tuesday heard Swiber's judicial management application filed after the board of directors of the listed O&M player dramatically reversed a winding-up petition last Friday.

Swiber's now-rescinded liquidation bid announced in a July 28 Singapore Exchange filing shook up Singa-pore's O&M and banking sectors as well as the stock market.

The market has been abuzz with questions as to why Swiber's board of directors had opted to go with a winding-up petition instead of opting for judicial management, under which the listed group and its subsidiaries can still continue to generate cash from its ongoing projects.

Its subsequent judicial management application is viewed as a more positive development especially for unsecured trade and bank creditors and bondholders.

Gibson Dunn & Crutcher LLP's partner, Robson Lee, said unsecured creditors rank at the bottom of insolvency payment priority with many walking away with very little or nothing at the end of liquidation proceedings.

The affidavit from the High Court hearing described DBS as the single largest creditor of Swiber. The bank is reported to have played an instrumental role in convincing Swiber's board to rescind its liquidation bid in favour of filing for judicial management.

In addition to the loans tied to Swiber's property, vessels and projects, DBS has also extended a bridging loan in the form of an overdraft facility totalling US$146 million for redeeming the group's medium term notes (MTN) due on June 6 and July 6.

BT had earlier reported that DBS private equity division is believed to have also exposure to multiple Swiber's MTN programmes, although this has not been confirmed by the bank.

READ MORE: DBS's S$17b exposure to O&G sector in focus