Singapore OSV owner and shipbuilder Otto Marine has taken a big step towards avoiding collapse by having its application for judicial management approved.
A Singapore court has appointed Chee Yoh Chuang and Lin Yueh Hung of RSM Corporate Advisory as managers.
The owner can now seek a deal with creditors having gained protection for its $877m of liabilities.
In last month's application to the court, executive chairman Yaw Chee Siew said: “I cannot be expected to continue shouldering the financial burden and injecting fresh capital into the company."
The company will probably survive for another two months based on its cash reserves, Yaw said in the filing.
But he added: “There is a reasonable probability of rehabilitating the company,” as the oil and gas market slowly recovers.
Yaw took full control of Otto in 2016, delisting it from the Singapore exchange. He is the biggest creditor with $208m owed.
Investor lined up
Otto had $869m in assets at the end of last year, but most of them are unlikely to be recovered in full, according to the court papers.
The shipowner has also secured a letter of intent from an unnamed potential investor, Yaw said in the application.
Yaw is part of a family that controls Malaysian timber giant Samling Group, and is a property developer.
The company, like many in the Singapore OSV sector, has been hit by weak markets.
Newbuildings due
It has 38 ships, including nine newbuildings due this year from China and its own Batamec yard in Indonesia.
Last year its subsidiary in Australia, Go Marine Group, called in the administrators ahead of a potential recapitalisation of the company.
The West Australian daily reported that the offshore shipowner brought in KordaMentha.
The company has 16 managed or owned ships and 380 employees.
