Swiber wins creditor approval for debt restructuring

Credit: REUTERS/EDGAR SU

Swiber Holdings won overwhelming approval from creditors for a debt-to-equity swap that will clear the way for white knight Rawabi Holdings to implement a US$200m rescue package.

SINGAPORE, Feb 24 (IFR) - Swiber Holdings won overwhelming approval from creditors for a debt-to-equity swap that will clear the way for white knight Rawabi Holdings to implement a US$200m rescue package.

Eight creditors, holding a total of US$592.8m, voted for Swiber’s restructuring proposal, representing 99.97% of the total value present at the creditor meeting on February 23. Swiber’s subsidiary Swiber Offshore Construction also obtained approval from 98.89% of creditors present at the same meeting for the proposal to swap debt into equity.

Swiber’s debt restructuring plan will involve Saudi-based oilfield services group Rawabi investing US$200m in Swiber, of which S$10m will be for new ordinary shares that will give it an 80% stake in New Swiber, and US$190m in new preference shares in either New Swiber or Equatoriale Energy, another subsidiary.

Total new shares issued to creditors of Swiber Holdings, including holders of its S$150m (US$113m) 6.5% bonds, will amount to a stake of 12.2% in the new entity called New Swiber and to 1.8% for Swiber Offshore’s creditors.

The upside of an equity stake in New Swiber looks promising, according to an independent study of the entity by global valuation firm BDO. The study, commissioned by Swiber, estimated an indicative valuation range for equity holders of between US$1.12bn and US$1.34bn at the end of year six. Swiber Holdings said this would lead to a recovery rate of between 12.4% and 14.8% for its unsecured creditors.

Swiber will now seek regulatory and shareholder approvals for the rescue and restructuring plan, with completion targeted for mid-May.

The Singapore High Court in January extended the judicial management for Swiber Holdings and Swiber Offshore to June 30.

(Reporting by Kit Yin Boey; Editing by Vincent Baby)

((kityin.boey@refinitiv.com; +65 84997259))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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