SGX reprimands Swiber for disclosure breaches on US$710m project

THE Singapore Exchange (SGX) has issued a public reprimand to troubled oil and gas firm Swiber Holdings amid a probe into its disclosure breaches that began a few months ago.

Swiber was criticised for "failing to provide a balanced and fair announcement" for a US$710 million project award which it had announced in December 2014.

"SGX is of the view that the announcement failed to provide investors, including shareholders and bondholders, with sufficient information to enable them to have a proper understanding of the impact of a major project award on the group," it said, adding that it has referred the case to the relevant authorities.

One issue is how the US$710 million value was just an estimate, with many caveats in the original letter of intent signed. Shareholders and bondholders were not aware that the final contract value was dependent on the completion of an engineering design study and on the finalisation of a field development plan. The study never got completed due to weakness in the oil and gas sector.

The deferment of the US$710 million project was announced only in early July. Investors have criticised the lack of disclosure, given that Swiber was highly geared and had a series of bond deadlines to meet.

Swiber then unexpectedly applied to wind itself up at end-July after facing cashflow problems, before subsequently reversing the application and placing itself under judicial management instead. It then defaulted on coupon payments for its bonds.

The stock is currently suspended from trading.

This article was first published on Oct 31, 2016.
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