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Swiber files for liquidation as top management quit

Swiber files for liquidation as top management quit
In the first major casualty in the Singapore offshore sector Swiber Holdings has filed a winding-up application at the High Court of Singapore, and its directors have quit the company to "pursue their own interests".

Singapore-listed Swiber announced that the winding-up application has been fixed for hearing on 19 August 2016.

“Additionally, the company had also today (27 July) filed an application to place the company in provisional liquidation,” Swiber stated.

The High Court of Singapore has appointed Cameron Lindsay Duncan and Muk Siew Peng, care of KordaMentha, as the joint and several provisional liquidators of the company.

The company’s top management, including executive director and vice chairman Francis Wong, executive director and group cfo Leonard Tay, and executive director Nitish Gupta, have all resigned to seek new opportunities.

While Swiber did not cite any reasons for the winding-up application, the company has been facing problems with executing some of its projects and has received claims amounting to millions of dollars. Along with the winding-up application announcement, Swiber said it has received letters of demand for approximately $25.9m, and it is seeking legal advice. Earlier on 11 July, the company said it faced claims amounting to $4.76m arising from its ordinary course of business.

Most recently the company was hit by a contract cancellation in Vietnam for a job on transport and installation services offshore Vietnam.

On 8 July, the company revealed that its $710m offshore field development project in West Africa was unable to progress due to the weakness in the oil and gas sector since the second half of 2014.

Back in June this year, Swiber's subsidiary Swiber Offshore Construction along with Sime Darby Engineering commenced arbitration proceedings in India against Oil & Natural Gas Corp (ONGC) in respect to a $618.38m process platform job in India awarded to Swiber and Sime Darby in 2010.

The crash in oil prices has led to the severe slump in the offshore oil and gas sector, significantly curbing exploration and production activities and negatively impacting offshore services firms worldwide.

Trading in Swiber shares on Singapore Exchange have been suspended since 27 July.

Founded in 1996, Swiber today owns and operates a fleet of 38 offshore vessels and 13 construction vessels. The group has a workforce of close to 2,700 employees located in offices worldwide, according to the company's website.

In its first quarter results ended 31 March 2016, Swiber reported a loss attributable to owners of $2.56m, similar to the deficit of $2.5m in the previous corresponding period.

Swiber, whose main business is in engineering, procurement, installation and construction (EPIC) services focusing on the field development stage, had betted on an asset-based strategy of optimising vessel utilisation and lowering mobilisation costs.

The company, however, is not spared from the global downturn of the offshore market where oil majors have cut back on E&P expenditures leading to weak charter rates for both oil rigs and offshore vessels.