Singapore-based offshore contractor Swiber has signed a $200 million deal with box ship player Seaspan Corporation, just days after it announced the expiry of a term sheet for a share swop arrangement with Australian power generation firm, Interlink Power & Energy Holdings.
In a stock exchange announcement, the offshore construction and services group said that it has signed with Seaspan a binding term sheet on October 3, 2018, which is subject to definitive agreements being entered into on mutually agreed terms. Under the terms, Seaspan proposes to invest up to $200 million in two stages.
The first stage is an initial $20 million in cash for new ordinary shares in Swiber which will give it control of 80 percent of Swiber’s enlarged share capital, taking into account shares to be issued to unsecured creditors under a debt restructuring scheme.
The remaining $180 million will be invested by way of subscription of new preference shares to be issued by Swiber’s wholly-owned subsidiary, Equatoriale Energy Pte. Ltd. This will be subject to Swiber meeting certain milestones relating to the development of a $1 billion LNG-to-power project in Vietnam.
The proposed transaction is subject to, among others, creditor, shareholder and regulatory approvals.
It is intended that the $20 million will be used towards funding the development of the Vietnam power project, while the remaining $180 million will be deployed to fund the construction, operation and maintenance of the power project and/or such other purposes as may be agreed between Swiber and Seaspan.
Swiber will be required to restructure all debts and liabilities by converting them into new Swiber shares (for unsecured debts) or secured redeemable convertible bonds for secured creditors.
Judicial Manager Bob Yap, who is also Head of Advisory at KPMG in Singapore, said, “The conventional oil and gas sector has faced difficult conditions in recent years. However, with growing demand for power in Southeast Asia, there are substantial opportunities for companies to develop clean energy solutions such as power generated from LNG. Against this backdrop, 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.”
Yap added that Swiber’s Executive Chairman Raymond Goh and his team, in efforts to diversify the Group’s business, have spent the last three years focusing on LNG-to-power opportunities in the region.
Seaspan President and Chief Executive Officer Bing Chen said, “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.”