Vallianz has been cutting dependence on Swiber as key source of revenue

VALLIANZ Holdings said its US$1.2 billion order book comprises mainly contracts with third-party customers that are not related to Swiber Holdings and its subsidiaries, joint ventures or associates.

The bulk of its order book that was reported in May 2016 is made up of long-term charter contracts to third parties in the Middle East.

"As a result of its focus on growing its chartering and brokerage business with major oil and gas companies, the group has been reducing its dependence on Swiber entities as a key source of revenue,'' Vallianz said.

It stressed that it has the strong support of its joint-venture partner and shareholder, Rawabi Holding Company Limited, which has extensive knowledge and connections in the Middle East oil and gas market. Rawabi holds an 18.7 per cent equity stake in Vallianz.

As of Q1 2016, Vallianz's revenue from Swiber-related companies stood at US$9.84 million, or 20 per cent, of its total revenue of US$49.30 million. The rest of the 80 per cent, or US$39.46 million came from third-party companies.

As at March 31, 2016, the group had trade receivables and other receivables owing from Swiber entities amounting to US$61.9 million. It also had trade payables and other payables owing to Swiber entities of approximately US$58.7 million.

"While the recent developments at Swiber will have an impact to the group's business, the board is of the view that the situation is manageable and its operations are continuing as usual,'' Vallianz said.

It added that it was working in close consultation with its legal advisors to evaluate the impact of the developments at Swiber.

Swiber, which has 25.15 per cent stake in Vallianz, filed a petition to wind up and liquidate itself on Thursday after facing US$25.9 million of demands from creditors.

Just a day earlier on Wednesday, Vallianz announced that its non-executive director and chairman, Raymond Kim Goh, 48, has resigned due to "health reasons". Mr Goh is also the executive chairman and founder of Swiber Holdings.

But in another equally stunning move, Swiber announced late on Friday night that it would be withdrawing its winding-up application. Instead, it will be placed under judicial management - something which investors, analysts and critics have said it should have done in the first place.