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Swiber seeks revival in buy-out deal for power business

SWIBER Holdings, in seeking to be revived as a going concern, is looking to diversify into the power generation business and to sew up a deal to buy out a privately owned player active in this growing segment.

The deal is among several being pursued by the beleaguered offshore and marine (O&M) group's court-appointed judicial managers (JMs) and senior management since it entered into judicial management in October 2016.

Its acquisition target, Western Australia-based Interlink Power & Energy Holdings Pty Ltd, is involved in projects that supply bridging power using mobile dual fuel turbines.

It has delivered and operated power projects totalling 4,000 MW. Its clients include General Electric, Rio Tinto, APR Energy and Repsol.

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Swiber has signed a non-binding term sheet for the proposed acquisition of 100 per cent shares in Interlink through a share swap arrangement.

The founders of Interlink, David Ingrames and Stephen Thurstans, now serving as chief executive and chief operating officers, respectively, were previously engineers with the Royal Australian Navy.

The proposed transaction is subject to certain conditions including the restructuring of all debts and liabilities of Swiber, and securing new equity investors to inject up to US$200 million into the Singapore-listed O&M group.

Of particular interest to Swiber's court-appointed JMs and its senior management team led by executive chairman, Raymond Goh, is the demand for a gas-fired power generation solution offered by Interlink.

Mr Goh has separately commissioned Swiber's engineers to design a vessel capable of storing, regasifying liquefied natural gas and generating power supply. A design completed by the Swiber's team of engineers and naval architects for a floating liquefied natural gas (FLNG) power plant capable of generating up to 400 MW of power has obtained in-principle approval from classification society Bureau Veritas (BV) Singapore.

Swiber's JM from KPMG, Bob Yap, suggested that with the FLNG design classed and ready for commercialisation, Swiber management and the JMs are in discussions to secure long-term power purchasing agreements spanning 20 to 25 years.

Swiber is understood to be eyeing demand for gas-fired power in neighbouring countries such as Indonesia and also in West Africa.

These energy-hungry emerging economies are potential demand centres for small-scale, fast-tracked land-based and floating power generation solutions.

Singapore's leading yard groups Sembcorp Marine and Keppel Offshore & Marine have also lined up partnerships and developed products targeted at the small-scale power generation market.

Swiber's JMs have secured an extension of judicial management period to Oct 31, 2018.

The JMs were also granted until March 31, 2018 to table a statement of proposals before the creditors.