Swiber enters MOU to sell its Jurong headquarters for S$30.8m

SWIBER Holdings said on Tuesday (Mar 8) that it has entered into a non-binding memorandum of understanding (MOU) with an independent third-party purchaser to sell its headquarters at 12 International Business Park for S$30.8 million.

In its bourse filing, the offshore and marine group - now under judicial management - said its wholly-owned subsidiary Swiber Corporate has entered into the MOU to sell the 5-storey leasehold business park development in Jurong East.

This is not the first time that Swiber has attempted to dispose of its headquarters. Last May, the company had announced an MOU for its sale for a consideration of S$39 million. However, it said on Tuesday that the 2021 MoU did not result in any binding sale-and-purchase agreement during the exclusivity period, and that it had lapsed.

The property has a land area of around 8,000 square meters (sq m) and a floor area of around 10,841 sq m. Its 60-year lease tenure, granted by the Jurong Town Corporation, commenced in December 1995.

Swiber said that the market value of the property is S$34 million, based on a desktop valuation report issued by Edmund Tie on Oct 5 last year. The book value of the property, based on its latest announced unaudited consolidated financial statements as of March 2016, was around S$28.4 million; the proposed disposal is expected to result in an estimated gain of S$2.4 million.

However, as the property is currently mortgaged to DBS, the proceeds from the proposed disposal will go towards partial repayment of the amount owed to DBS under banking facilities that had been extended to the company.

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Swiber Holdings said the disposal is in the interest of the company, as it will reduce liabilities and the interest accrued from these liabilities. It noted that since the judicial managers had been appointed in 2016, the property has been under utilised: Just 1 storey is being occupied by the group, with a significant area having been vacant since September 2017.

The property has not been generating significant rental income since a past tenant vacated the premises that month; past efforts to secure new tenants had also been unsuccessful due to "an oversupply of rental premises in International Business Park".