Swiber built an offshore fleet for the oil boom — then the bust sank it

Swiber Holdings was a Singapore-based group that provided offshore construction and support services for oil and gas field development around the world. It had grown during the years of high oil prices, building up a fleet of vessels to serve the offshore energy industry, and it was one of the most prominent names in Singapore's offshore and marine sector.

The business was geared to an oil price that did not last. As the Singapore High Court later recorded, the group's financial situation began to deteriorate in 2015, following a downturn in the oil and gas industry brought on by a plunge in oil prices. With offshore drilling cut back and demand for its vessels falling, Swiber became unable to pay its debts as and when they fell due.

On 29 July 2016 Swiber Holdings and its subsidiary Swiber Offshore Construction applied to the Singapore High Court to be placed under judicial management — a rescue process for an insolvent company. On 6 October 2016 the court granted the applications. The collapse, with hundreds of millions of dollars of debt behind it, made Swiber one of the biggest Singapore casualties of the offshore oil slump, and it later became a business-school case study in how a cyclical bet can sink a company.

Swiber is a case about building a business on a commodity price. The fleet and the debt made sense while oil was high; when the price plunged, the revenue that was supposed to service the borrowing disappeared, and a group that had looked prosperous a few years earlier was in the hands of the court.