Seaspan Corp has committed to backing Swiber Holdings, signing a $200m investment in the restructuring OSV owner.
Swiber will diversify into the LNG power sector and restructure its debt after two years of court oversight in a plan designed to resuscitate the troubled Singapore company.
The US-listed boxship giant in October signed a binding term sheet to buy 80% of its enlarged capital and new preference shares in subsidiary Equatoriale Energy.
With the 29 March signing, Seaspan will invest $10m upon closing the deal in exchange for 80% of a "New Swiber" that will secure a development stage LNG-to-power project in Vietnam.
The remaining $190m will be given to pay for construction, operation and maintenance if Swiber meets certain milestones in the $1bn endeavor.
The agreement initially called for Bing Chen-led Seaspan to pay out $20m then $180m when first signed in October.
"The latest move marks a major milestone in efforts to get the SGX-listed marine engineering group back on its feet after over two years in judicial management," Seaspan said Saturday.
Secured creditors will see Swiber's debts converted into new stock or convertible bonds.
“This is an important milestone in the complex exercise to get Swiber on the road to recovery," Bob Yap, judicial manager and KPMG's head of restructuring in Singapore, said.
"We are particularly delighted to work with a company of Seaspan’s reputation and the confidence it has placed in Swiber going forward.
“There’s still more work to be done and we believe this investment by Seaspan will result in a better recovery to all stakeholders compared to winding-up.”
Seaspan owns 112 containerships but its chairman David Sokol has "extensive experience in the power industry," the company said.
