Swiber

Swiber: Operationally, CIMB believe that Swiber is ready to take the next step in going into deeper waters. Though execution in deepwater is still untested, Swiber could use the next 3 years to beef up its crew and expertise while waiting to take delivery of the vessel. Upstream reported that Swiber is preparing to invest as much as US$500m to build a deep-water offshore construction vessel. Management is non-committal on the news but stated that deep-water is an eventuality. The company is only at the preliminary stage of evaluating the newbuild project. If it goes ahead, CIMB believe that Swiber is likely to choose Chinese yards that provide favourable financing with low upfront payment. Assuming tail-heavy payment terms, CIMB views that a cash call is likely in 2015/2016, nearer to delivery. Swiber has a fleet of about 62 vessels currently (12 units under sale and leaseback, 27 units via JVs and 23 units 100% owned). CIMB maintain OUTPERFORM with TP of $0.91.