Swiber Holdings

The company has filed winding-up application voluntary, rather than by creditors. It is more likely that, the management has given up without a real fight, with cash reserve of S$176 mil, and positive op cash flow position. I checked, the immediate amount on recent letter of demands were much less than that.

http://infopub.sgx.com/FileOpen/SHL%20-%...eID=414404

Why? I checked on the shareholders structure, there are 3 SSHs, with an estimated stakes of around 10%+-, inc deemed interest from an non-transparent BVI entity, Newshire Capital Limited.

Isn't another "orphan company" advocated by Mr. Yeo, from Yeoman Capital? I learned from Mr. Yeo, to avoid orphan companies i.e. companies without a strong major shareholder.

What do you think?

(not vested, and contribute a point for the postmortem)

TSMC is a company without strong major shareholders but with a strong board and management team led by Morris Chang. In fact that's how the corporatization should work with the institution of Board and Management team. Similar to many US companies or MNCs.

End of day the 3 SSH of Swiber has vested interest in the company and there is incentive for them to keep the company going. But of course if the company needed funding and they can't or not willing to fork out more cash then the outcome is clear. On the other hand if their stake is small vs their net worth or NAV, then they may figure it is not worth their effort either.

The corollary for companies with strong shareholders is that the Board is not independent and the company will move to the beat of the SSH. That's where cronyism or deep value will occur cause the SSH control the Structure. Basically one has to assess whether you want to dance with the SSH. But if the SSH is a visionary or hardworking, things can move very fast.

So there's pros and cons in both scenarios and the unsatisfying answer is "it depends"

Are the ssh from bvi linked to 1MDB?? Just a thought...

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(29-07-2016, 04:17 PM)CityFarmer Wrote: The company has filed winding-up application voluntary, rather than by creditors. It is more likely that, the management has given up without a real fight, with cash reserve of S$176 mil, and positive op cash flow position. I checked, the immediate amount on recent letter of demands were much less than that.

http://infopub.sgx.com/FileOpen/SHL%20-%...eID=414404

Why? I checked on the shareholders structure, there are 3 SSHs, with an estimated stakes of around 10%+-, inc deemed interest from an non-transparent BVI entity, Newshire Capital Limited.

Isn't another "orphan company" advocated by Mr. Yeo, from Yeoman Capital? I learned from Mr. Yeo, to avoid orphan companies i.e. companies without a strong major shareholder.

What do you think?

(not vested, and contribute a point for the postmortem)

Looking at another angle, the vessels will be selling at distressed prices and technically speaking, if the vessels will procure by another company, the company, with little debt, will be ready to take advantage of the recovery and make good profits.
Swiber, with all the debts, is unlikely to survive till recovery. Even if it manages to recover, all the earnings will be going to the banks/creditors.

(29-07-2016, 04:17 PM)CityFarmer Wrote: The company has filed winding-up application voluntary, rather than by creditors.

This is a good salient point that you pointed out:

"[SINGAPORE] Some of Swiber Holdings Ltd's lenders are pushing for the offshore oil and gas services group to continue its business rather than pursue its plans for liquidation to meet creditor demands, according to people familiar with the talks.

The banks are pushing for judicial management in attempts to recover more of their debt exposure to the Singapore-listed company, the people said, asking not to be identified as the discussions are private.

If Swiber opts instead for judicial management, it would continue its operations under court supervision while attempting to turn around the business. If it goes into liquidation, the company would be wound up and its assets would be sold to repay creditors.

Swiber on Wednesday filed a petition to wind up and liquidate itself after facing US$25.9 million of demands from creditors. The company had US$1.43 billion in liabilities and US$1.99 billion in assets at the end of March, according to its financial statements.

News of Swiber's liquidation plans dragged down the SGX Oil & Gas Index to a new low. Local companies that rely on contracts within the offshore oil and gas market are reeling from a collapse in oil prices.

Last year, a measure of the country's bad-loan ratio reached the highest level since 2009, according to the Monetary Authority of Singapore.

The Singapore bourse said Thursday it will be undertaking a "thorough investigation" into developments at Swiber after the company made key disclosures only after queries from the regulator.

Swiber on July 11 said it failed to get a US$200 million equity injection from AMTC Ltd which had agreed to subscribe for preference shares.

DBS Group Holdings Ltd, south-east Asia's biggest lender, said Thursday it has about S$700 million in total exposure to Swiber. The bank said it expects to recover half of it.

Three calls to Swiber's office went unanswered.

Swiber in June redeemed S$130 million 5.125 per cent notes due 2016 and in July redeemed S$75 million 7 per cent notes.

It has four more Singapore dollar bonds worth a total of S$460 million that are outstanding, according to data compiled by Bloomberg.

BLOOMBERG

http://www.businesstimes.com.sg/companie...dation-bid

But few key executives had resigned , it is as good as surrender now .

^^ that's fine cause under JM they are not the management either

This JM system downside is obvious with accountants rather than businessmen running the company, so I think Singapore is looking at a variant of chapter 11

JM is appointed to liquidate , but not to run the company .

(29-07-2016, 07:40 PM)cfa Wrote: JM is appointed to liquidate , but not to run the company .

Liquidators are appointed to liquidate the company. Judicial managers are appointed to temporarily run the company in order to pay employees, collect receivables, pay creditors etc. Generally the priority is to stabilize the company so that it does not simply "freeze" for lack of funds.

(29-07-2016, 05:43 PM)specuvestor Wrote: TSMC is a company without strong major shareholders but with a strong board and management team led by Morris Chang. In fact that's how the corporatization should work with the institution of Board and Management team. Similar to many US companies or MNCs.

End of day the 3 SSH of Swiber has vested interest in the company and there is incentive for them to keep the company going. But of course if the company needed funding and they can't or not willing to fork out more cash then the outcome is clear. On the other hand if their stake is small vs their net worth or NAV, then they may figure it is not worth their effort either.

The corollary for companies with strong shareholders is that the Board is not independent and the company will move to the beat of the SSH. That's where cronyism or deep value will occur cause the SSH control the Structure. Basically one has to assess whether you want to dance with the SSH. But if the SSH is a visionary or hardworking, things can move very fast.

So there's pros and cons in both scenarios and the unsatisfying answer is "it depends"

The "rule" seems based on human motivation system. We probably all know the story of "一个和尚挑水喝，两个和尚抬水喝，三个和尚没水喝". Sorry for not translating it, you can cut-and-paste to google for translation. To be sure, the orphan company means more SSHs with almost equal stakes. Least-effort solution, is often the team solution, even it is fatal over longer term.

No absolute rule in investing, IMO. To break the rule, you need to master it. If similar structure exists in core team of Alibaba, I have no reason to worry, with a highly passion, and aligned team. But most of the time, the rule applies if unsure, IMO

I should spend some time on TSMC, it seems is an interesting company. It is probably fall into similar situation of Alibaba 

(not vested)