Swiber Holdings

CY09 Wrote:To D.O.G: Thank you for breaking down the guess estimate value of each component, but it seems DBS is taking loss provision despite the analysis of a near certainty of getting its loans back, could it be because DBS is backing the notes in some way - similar to Ezion notes? This creates off balance sheet liabilities for DBS

There are several ways that DBS could have losses on its loans:

1. Unsecured loans to the JVs and associates. These would not appear on Swiber's balance sheet.

2. DBS is holding some of the Notes. It underwrote the Notes, maybe it couldn't sell them all so it had to hold the remainder.

3. DBS might have lent money on a non-recourse basis to private banking clients to buy the Notes.

(29-07-2016, 04:38 AM)d.o.g. Wrote:

CY09 Wrote:To D.O.G: Thank you for breaking down the guess estimate value of each component, but it seems DBS is taking loss provision despite the analysis of a near certainty of getting its loans back, could it be because DBS is backing the notes in some way - similar to Ezion notes? This creates off balance sheet liabilities for DBS

There are several ways that DBS could have losses on its loans:

1. Unsecured loans to the JVs and associates. These would not appear on Swiber's balance sheet.

2. DBS is holding some of the Notes. It underwrote the Notes, maybe it couldn't sell them all so it had to hold the remainder.

3. DBS might have lent money on a non-recourse basis to private banking clients to buy the Notes.

If DBS does the 3rd one, then it is really silly. It is like heads the private bankers win, tails the bank loses. 

But then again, it is also possible that DBS is being more prudent to set aside an additional 150m of allowances, there may still be chance of a reversal if it can collect back more money that it estimated

[removed for privacy]

(29-07-2016, 11:58 AM)whatamidoing Wrote:

(29-07-2016, 09:17 AM)money Wrote:

(29-07-2016, 04:38 AM)d.o.g. Wrote:

CY09 Wrote:To D.O.G: Thank you for breaking down the guess estimate value of each component, but it seems DBS is taking loss provision despite the analysis of a near certainty of getting its loans back, could it be because DBS is backing the notes in some way - similar to Ezion notes? This creates off balance sheet liabilities for DBS

There are several ways that DBS could have losses on its loans:

1. Unsecured loans to the JVs and associates. These would not appear on Swiber's balance sheet.

2. DBS is holding some of the Notes. It underwrote the Notes, maybe it couldn't sell them all so it had to hold the remainder.

3. DBS might have lent money on a non-recourse basis to private banking clients to buy the Notes.

If DBS does the 3rd one, then it is really silly. It is like heads the private bankers win, tails the bank loses. 

But then again, it is also possible that DBS is being more prudent to set aside an additional 150m of allowances, there may still be chance of a reversal if it can collect back more money that it estimated

I am a holder of DBS shares and am against their "save all Singaporean big oil services companies" policy i.e. see Ezra (USD1bn outstanding to DBS, a sinking ship) and Ezion and KrisEnergy (just bought over the entire RCF from other banks). It doesn't make any economic sense.

Our economic model is not a pure capitalist model. There will be times when national companies have to do public service, when majoirty shareholder tells you so

People forget DBS is actually short form for Development Bank of Singapore. That's the root which Temasek forgotten

It doesn't make economic sense but is O&G a strategically important sector for Singapore? I think so. Go regional was also a strategic thrust. So it depends which side of the fence you choose to sit on eg customers, managers, opmi, citizen etc. When one choose to be a opmi than one should know the company's mission, which might include creating wealth for major shareholders like some other O&G companies, or maybe even just a vehicle to rip off the capital markets.

I am actually quite surprised they will let Swiber go but like I said it is probably because for some reason they came to the conclusion that it is no longer feasible. When a company is insolvent, the creditors talk louder than the board.

(29-07-2016, 12:37 PM)specuvestor Wrote: People forget DBS is actually short form for Development Bank of Singapore. That's the root which Temasek forgotten

It doesn't make economic sense but is O&G a strategically important sector for Singapore? I think so. Go regional was also a strategic thrust. So it depends which side of the fence you choose to sit on eg customers, managers, opmi, citizen etc. When one choose to be a opmi than one should know the company's mission, which might include creating wealth for major shareholders like some other O&G companies, or maybe even just a vehicle to rip off the capital markets.

I am actually quite surprised they will let Swiber go but like I said it is probably because for some reason they came to the conclusion that it is no longer feasible. When a company is insolvent, the creditors talk louder than the board.

Maybe they need to Kill one to warn other companies to better buck up and control their cost, operation efficiency and expansion.
Tax payer money is not free for them to pay themselves high high.

Personally I am a bit disappointed that the govt did not show any economic leadership in this sector. I remember clearly when LKY was PM, he said that shipyards is a sunset industry. Thereafter the govt forced a consolidation and today we hv just 2.(Keppel n SM) and morph into world class rig bldg. This oil price collapse is not over night n has been dragging on for some time now and pulling in casualties. What the govt should hv done is force a consolidation in the service sector. Massively diluting shareholders interest n ask the creditors to take a big hair cut in exchange for equity or something else. Surely the govt can learn a thing or 2 from the US bailout of the US auto industry.

This oil crisis in time will pass too n back to healthy level but in meantime it needs help. Is the govt going to sit and wait and let the industry sort itself out? O&G is one of the last few bastion of Sgp industry left as other industries has continue to hollow out. Surely a case can be made to keep this service industry in Sgp.

not vested

(29-07-2016, 12:37 PM)specuvestor Wrote: People forget DBS is actually short form for Development Bank of Singapore. That's the root which Temasek forgotten

It doesn't make economic sense but is O&G a strategically important sector for Singapore? I think so. Go regional was also a strategic thrust. So it depends which side of the fence you choose to sit on eg customers, managers, opmi, citizen etc. When one choose to be a opmi than one should know the company's mission, which might include creating wealth for major shareholders like some other O&G companies, or maybe even just a vehicle to rip off the capital markets.

I am actually quite surprised they will let Swiber go but like I said it is probably because for some reason they came to the conclusion that it is no longer feasible. When a company is insolvent, the creditors talk louder than the board.

i am not sure if i can agree with this. I remember back in 2008, DBS was one such company that layoff 500 staff. To assume that DBS will always do national service all the time may not be that accurate...

is the 500 staff strategic?

Agree with Jacmar to a certain extent but again that would be deemed by some to be top-down paternalistic, especially liberals or those drilled into the axiom of "invisible hand" corrects all mispricing / inefficiencies etc.

That's actually where Temasek can come in to be a consolidator / aggregator of strategic Singapore industries. Like I been saying: she has forgotten her role. And of course journalist and bloggers will say no freedom and elitist that they decide. That's until they have to make the hard decision themselves if they are decision makers or they out of a job. Talk without thinking requires little effort.

Recently a gaming ceo was blasting the govt for trying to control Pokémon Go as stifling to the gaming industry. I will appoint him to talk to the mothers who in future lose their children due to accidents and reread his post word for word. To paraphrase Buffett, all these crap arguments about tax increase melts away at Normandy Beach. There is theory and there is reality.

It's actually a very fine line between utopian and ignoramus. I am not a politician so I can be politically incorrect. I only know cats that can catch mice are good cats. US talks about freedom and hype up all the racial issues and now everybody has to be politically correct in their speech, even media and movies. Singapore catch a racist and we make sure he pays for it. FULL STOP. Not splashed across the media in the name of freedom of information or speech to incite more hatred and ostracized the police who are trying to do their job and as far as I know, also have mothers.

Sorry for the Friday rant.

(29-07-2016, 12:04 PM)CY09 Wrote:

(29-07-2016, 11:58 AM)whatamidoing Wrote:

(29-07-2016, 09:17 AM)money Wrote:

(29-07-2016, 04:38 AM)d.o.g. Wrote:

CY09 Wrote:To D.O.G: Thank you for breaking down the guess estimate value of each component, but it seems DBS is taking loss provision despite the analysis of a near certainty of getting its loans back, could it be because DBS is backing the notes in some way - similar to Ezion notes? This creates off balance sheet liabilities for DBS

There are several ways that DBS could have losses on its loans:

1. Unsecured loans to the JVs and associates. These would not appear on Swiber's balance sheet.

2. DBS is holding some of the Notes. It underwrote the Notes, maybe it couldn't sell them all so it had to hold the remainder.

3. DBS might have lent money on a non-recourse basis to private banking clients to buy the Notes.

If DBS does the 3rd one, then it is really silly. It is like heads the private bankers win, tails the bank loses. 

But then again, it is also possible that DBS is being more prudent to set aside an additional 150m of allowances, there may still be chance of a reversal if it can collect back more money that it estimated

I am a holder of DBS shares and am against their "save all Singaporean big oil services companies" policy i.e. see Ezra (USD1bn outstanding to DBS, a sinking ship) and Ezion and KrisEnergy (just bought over the entire RCF from other banks). It doesn't make any economic sense.

Our economic model is not a pure capitalist model. There will be times when national companies have to do public service, when majoirty shareholder tells you so

Let's talk about bail outs. In my recent memory, South Korea has done some bailouts. Of course, it is not an apple-to-apple comparison with regards to what South Korea did vs now.

1. Hynix Semiconductor (Memory maker)
2 bails out:
2001: http://www.wsj.com/articles/SB100453974650447160
2009: http://www.koreatimes.co.kr/www/news/biz...35854.html
Verdict: Good move. Hynix share price rosed from 6,350won (Dec 2008) to 34,400won (Jul 2016).

2. South Korea Big 3 - Daewoo Shipbuilding & Marine Engineering, Hyundai Heavy Industries Co Ltd and Samsung Heavy Industries Co Ltd
2016: http://www.reuters.com/article/us-southk...SKCN0Y31E2
Verdict: Remains to be seen as it is happening real time. But these yards are world beaters and I suspect that they will be well positioned for the eventual upturn.