Seaspan has inked a binding term sheet to invest up to $200m into Swiber in a deal that is seen as paving the way for the recovery of the Singapore offshore company.
Singapore-listed Swiber is under judicial management after the company, once valued at over $1bn, collapsed in spectacular fashion in July 2016 filing for liquidation, a decision reversed a few days later with a filing for judicial management.
The first of deal with Seaspan sees the containership owner investing $20m in cash in ordinary new shares in Swiber which will give it control of 80% of Swiber’s enlarged share capital, taking into account shares to be issued to unsecured creditors under a debt restructuring scheme.
The second part will see Seaspan investing $180m in new preferance shares in Swiber subsidiary Equatoriale Energy subject to Swiber meeting certain milestones relating to the development of a $1bn LNG- to-power project in Vietnam. The initial $20m investment is to be used towards funding the Vietnam power project.
Commenting on the move by Seaspan to invest outside of container shipping and into the offshore oil and gas space, president and ceo Bing Chen said: “We are excited to partner with Swiber. Together, with Swiber’s operational and engineering capabilities, Seaspan’s leading maritime asset management platform, and our chairman David Sokol’s energy-related expertise, we will unlock substantial value.”
The investment is subject to the emergence of Swiber from its judicial management process in Singapore, the approval of Swiber's shareholders and creditors, and Singapore regulatory approvals. The first tranche of the investment is expected to happen in early 2019.
Bing added: “Concurrently, we will continue to invest in and improve operations of our existing containership leasing business to provide best-in-class service to our customers.”
Swiber judicial manager Bob Yap, who is also Head of Advisory at KPMG in Singapore, commented: “we are delighted that a reputable and established company like Seaspan has chosen to invest in Swiber. We believe that this deal offers a step forward in reviving Swiber as a going concern, and delivering a positive outcome for creditors and shareholders.”