Otto Marine seeking insolvency protection from High Court
Offshore services provider applies for judicial manager; hearing date to be fixed
Crippled with a debt of US$877 million (S$1.16 billion), offshore services provider Otto Marine is seeking insolvency protection from the High Court in a bid to salvage the company and stave off liquidation.
The troubled company, which has been delisted from the Singapore Exchange (SGX), filed an application last week to be placed under judicial management.
At a closed-door hearing on Friday, it applied for an interim judicial manager to be appointed, pending the hearing of its judicial management application.
Lawyers for its creditors argued for an adjournment.
The hearing has been adjourned to March 12, with the hearing date for the judicial management application to be fixed by the court.
Otto Marine's move comes in the wake of an application filed by United Overseas Bank last month to wind up the company over a debt of US$19.6 million.
The company, which is represented by Mr Pradeep Pillai of PRP Law, is seeking to persuade the court that rather than resorting to a winding up, the interests of its creditors would be better served if a judicial manager is appointed to restructure the group and source for investors.
In an affidavit, its executive chairman, Malaysian tycoon Yaw Chee Siew, said the company is unable to pay its debts and will likely be able to carry on for only two more months based on its cashflow reserves.
The company's total assets stand at about US$869 million, but the bulk of them are not likely to be recovered in full, he said.
The Otto Marine group comprises 70 entities with subsidiaries, associate companies and indirect subsidiaries in Singapore and abroad.
The group operates a shipyard in Batam, Indonesia, and a fleet of offshore support vessels deployed globally in major oil and gas markets.
Like many other players in the offshore marine sector, Otto Marine took a battering when plunging crude oil prices in 2014 drove down demand for offshore vessels and shipbuilding.
Otto Marine's accumulated losses swelled to US$203 million as at June 2016. In October that year, it delisted from the SGX mainboard, with Mr Yaw taking the company private at $0.32 a share.
He and his affiliated entities have injected US$208 million into the company over the years, according to his filing.
Mr Yaw said he believes that "there is a reasonable probability of rehabilitating the company".