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UPDATE 1-Singapore court approves judicial management for troubled Swiber
October 6, 2016 / 5:21 AM / a year ago

UPDATE 1-Singapore court approves judicial management for troubled Swiber

* Court appoints KPMG as judicial manager

* Swiber initially filed for liquidation

* Singapore offshore and marine firms hit by oil price drop (Adds details from court, context on offshore and marine sector)

By Fathin Ungku

SINGAPORE, Oct 6 (Reuters) - A Singapore court on Thursday appointed financial advisory firm KPMG as judicial manager for Swiber Holdings Ltd, allowing the troubled oilfield services firm to be kept under a process through which it could be nursed back to health.

Swiber applied in July to place itself under judicial management. It had initially filed for liquidation as it faced hundreds of million of dollars in debt and a decline in orders following a drop in global oil prices.

Judicial management allows a financially distressed company to be restructured under court supervision rather than the more disruptive process of liquidation that reduces the chance of creditors recouping money owed.

KPMG was the firm’s interim judicial manager.

On Thursday, the court heard that none of Swiber’s creditors had any objection to judicial management. Creditors include Singapore’s biggest lender, DBS Group Holdings Ltd, whose exposure to the firm is S$721 million ($526.4 million).

The judge suggested forming a committee to deal with “creditors as a corporate group rather than (on an) individual basis.”

“Twenty-seven investor expressions of interest have been received ... there could be more,” Swiber’s lawyer Ashok Kumar told the court, citing KPMG.

Swiber is a part of Singapore’s offshore and marine sector, which has been pummelled as clients cut spending due to oil prices hitting record lows.

Several firms in the sector, including oil and gas service provider Swissco Holdings Ltd and container ship owner Rickmers Maritime, have recently sought to restructure debt.

“Generally, bond yields for this beleaguered sector are still showing 20 percent yields - highlighting their continuing risks of default,” trading strategist Nicholas Teo at KGI Securities said in an emailed report.

On Wednesday, AusGroup Ltd, which provides maintenance and construction services to the natural resources sector, received support from a majority of bondholders to extend the maturity of notes worth S$110 million by two years.

$1 = 1.3696 Singapore dollars Reporting by Fathin Ungku; Writing by Aradhana Aravindan; Editing by Christopher Cushing

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