Swiber seeks revival from US$200m equity deal with Seaspan

BELEAGUERED Swiber Holdings on Wednesday disclosed a US$200 million equity deal that is in the making with New York-listed box ship player, Seaspan Corp, just days after it announced the expiry of a term sheet for a share swop arrangement with Australian power generation firm, Interlink Power & Energy Holdings.

A binding term sheet signed on Wednesday between the two parties called upon Seaspan to inject an initial US$20 million in cash for new ordinary shares amounting to 80 per cent of Swiber's enlarged shareholding.

Seaspan will pump in another US$180 million of equity into Swiber's subsidiary, Equatoriale Energy Pte Ltd. The investment in Equatoriale Energy is subject to Swiber meeting certain milestones relating to the development of a US$1 billion liquefied natural gas-to-power project that the Singapore-listed group is eyeing in Vietnam.

This equity deal with Seaspan is also conditional on Swiber restructuring its debts and liabilities amounting to billions of US dollars.

The proposal for now is to convert the unsecured debts into new shares in Swiber and to issue redeemable convertible bonds for secured creditors.

Swiber's creditors and shareholders are not expected to hold more than 20 per cent of the enlarged equity of the listed group.

Swiber is expected to convene meetings with its creditors to seek the requisite approvals before the Seaspan-backed equity deal can proceed.

The deal is premised on Swiber breaking into the LNG-to-power business, beginning with a project identified in Vietnam.

Swiber was likewise pursuing gas-fired power generation opportunities when it last unveiled a deal in late 2017 to buy out Australia-based Interlink through a share swop arrangement.

A term sheet that was signed with Australia-based Interlink, however, has lapsed, the company said on Monday evening.

Swiber, which has gone into trading suspension, was placed under the care of court-appointed judicial managers after the firm withdrew a bid to liquidate its business.

Singapore's High Court has approved Swiber's last application to extend its judicial management period till June 30, 2019.