Pacific Radiance distances itself from problems at Swiber

The board of directors of Pang Yoke Min-led Pacific Radiance Ltd has issued a further statement about its financial situation, its exposure to problems at fellow Singaporean company Swiber Holdings and business model. The company said it wanted to clarify the situation with regard to provision for ‘doubtful receivables’ for services rendered to the entities of Swiber Holdings and media reports following the situation faced by Swiber Holdings.

“The company wishes to clarify that whilst the provision is expected to negatively impact the net tangible assets and earnings per share of the company for the financial year ending 31 December 2016, it is a non-cash accounting provision which is not expected to significantly affect the company’s cashflow position,” said Pacific Radiance. “Notwithstanding the aforementioned, the company will continue to pursue all legal avenues of recovery of the doubtful receivables.”

Pacific Radiance said the company, its subsidiaries, and related entities “continue to have the full support of their banks, lenders, and business partners, and their cashflows remain manageable.” It said the management of the group continues to “vigorously and tirelessly manage its operations and financial position in a conservative and sustainable manner,” taking into account the challenging environment which may last for the next two to three years. In this regard, the group constantly evaluates and pursues opportunities to enhance its liquidity position and raise additional cash in order to ensure business sustainability and position itself for any potential market opportunities.

“Since the onset of the industry downturn in late 2014, the group has implemented and will continue to roll out various measures as part of its risk mitigation strategy to proactively reduce both capital and operating expenses and manage its cashflows,” said Pacific Radiance. “Some of the key steps include the refinancing of loans with its key lenders, and the amendment of a financial covenant of its sole S$100 million (US$74 million) bond issue due August 2018 to avoid any technical breaches. In parallel, the group continues to intensify its marketing and business development efforts to grow existing markets and expand into new ones. Lastly, the group wishes to clarify that it operates on a different business model and in a different business segment from Swiber. The group owns and operates a fleet of offshore support vessels which are mostly chartered out on a time charter basis, while Swiber is a contractor which offers a range of engineering, procurement, installation and construction services. The businesses are different,” Pacific Radiance’s statement concluded.