The company&rsquo s shares have been suspended since November 2022

THE liquidators of AusGroup have applied for the company to be delisted from the Singapore Exchange (SGX).

 

The beleaguered oilfield services provider was previously ordered by the Singapore High Court to wind up after it said it was unable to service its debt. The court had also ordered the company to be discharged from judicial management and for the joint and several judicial managers to be released from liability.

 

Deloitte&rsquo s Tan Wei Cheong, Matthew Stuart Becker and Lim Loo Khoon were appointed as AusGroup&rsquo s joint and several liquidators.

 

On Tuesday (Jul 23), the liquidators said the company is insolvent and its debts far exceed its realisable assets.

 

&ldquo There will be no residual assets to be distributed to its shareholders after the liquidation process is completed,&rdquo they added.

 

AusGroup noted that no exit offer from its substantial shareholders has been made. It also said it has no financial means to hold an extraordinary general meeting or to appoint an independent financial adviser to advise on an exit offer.

 

AusGroup says unable to pay its debts, applies to wind up 

 

The group added that it would release further announcements when there are material developments.

 

Shares of AusGroup have been suspended since Nov 10, 2022, following a trading halt on Nov 7. The stock last traded at S$0.009.

The Singapore High Court has ordered Australia-based but Singapore-listed engineering firm AusGroup to wind up on July 18. The company has also been ordered to be discharged from judicial management with its joint judicial managers released from liability.

 

AusGroup had filed an application to wind up the company in May as it was unable to service its debt. The company had already filed for judiciary management in November last year.

 

The memorandum of understanding (MOU) entered into between AusGroup and Arion Agrophotovoltaic has also been terminated given that no definitive agreements were executed between both parties by the long stop date, which is on July 18.

 

AusGroup and Arion Agrophotovolatic had entered into an MOU on June 8. The MOU sought to explore the restructuring of AusGroup by way of transferring its listing status to Arion Agrophotovoltaic or to a new Singapore company that is directly or indirectly holding the latter.

 

Arion Agrophotovoltaic is a company that focuses on the investment, development, and operation of agrophotovoltaic thin film and solar tube plant(s) in Singapore and in the Asia Pacific region.

AUSGROUP has applied to the Singapore High Court to wind up the company, saying that it is unable to pay its debts and that the &ldquo purpose of judicial management cannot be achieved&rdquo . 

 

In a bourse filing on Friday (May 19), the company said it has applied to the court pursuant to the Insolvency, Restructuring and Dissolution Act 2018, for the discharge of the company from judicial management and to release the joint and several judicial managers from liability. 

 

The date of hearing for the applications will be fixed by the court, the company said. 

 

Tan Wei Cheong, Matthew Stuart Becker and Lim Loo Khoon of Deloitte & Touche are proposed to be appointed as joint and several liquidators of the company in relation to the winding up applications, AusGroup said. 

 

The group said it would release further announcements when there are material developments in relation to the applications. 

 

A SUBSIDIARY of AusGroup, which has been placed under judicial management, will terminate its agreement to provide an Esso Thailand refinery with scaffolding and insulation services.

 

In a bourse filing on Wednesday (Mar 15), the group&rsquo s joint judicial manager Tan Wei Cheong said the notice was sent out to end AusGroup Thailand&rsquo s services for Esso Sriracha Refinery, following a failed bid to attract investments or get the company restructured.

 

Based on AusGroup Thailand&rsquo s financial position, external funding is required for it to continue operating without disruptions. 

 

But when the judicial managers approached potential investors who had previously expressed interest in AusGroup Thailand, the parties no longer showed interest to invest in or restructure the company, after carrying out their due diligence.

 

Tan also said the parent company is unable to provide the wholly-owned subsidiary the necessary financial support it required to maintain its service outline agreement with Esso Thailand, given its current status and financial position.

 

The decision to end the agreement was thus made to mitigate any exposure arising from its potential inability to continue fulfilling its obligations, Tan said.

 

The agreement will cease 45 days from Wednesday.

It' s been a rather unfortunate turn of events for AusGroup, which had held up over oil&rsquo s previous downturns. 

ANNOUNCEMENTS signalling trouble at AusGroup, a Singapore Exchange (SGX)-listed marine project and asset services provider, came fast and furious this month.

 

It began with key executive changes: the announcement of Shane Kimpton&rsquo s resignation as managing director, although he retains the chief executive post, and the departure of chief financial officer Christian Johnstone. Notices of these changes flanked a request for a trading halt of AusGroup&rsquo s shares, and were followed thereafter with a trading suspension.

 

The board said in its suspension announcement that it was in talks with management on the company&rsquo s state of financial affairs and that AusGroup was also in &ldquo confidential discussions&rdquo with several parties for the potential sale of certain assets or businesses, and hence a trading suspension would avoid irregular swings in the stock.

 

By that point, AusGroup&rsquo s shares had plumbed to S$0.009 &ndash the lowest since the company&rsquo s listing 17 years ago. Around the same time, AusGroup also said it has appointed a financial adviser to advise on the restructuring of its financial obligations.

 

All that culminated last week in an announcement that the loss-making company, having fought sharp drops in oil prices in 2014-2015 and again during the course of the pandemic in 2020, has opted to go down the judicial management (JM) route, not unlike so many of its sector peers.

 

AusGroup is just over 13 per cent owned by Ezion Holdings &ndash once an offshore and marine sweetheart and one of the world&rsquo s largest owners of liftboats. Ezion fell off the corporate sidewalk this year as hefty debts did a number on it and the pandemic dashed rescue hopes by a white knight.

 

That AusGroup, too, may now follow the same route is a shame. The company had managed to pull through oil&rsquo s 2015 downturn owing to several recapitalisation exercises and having rolled over its debt papers.

 

That&rsquo s not to say there was no pain preceding that &ndash AusGroup was in fact placed on the SGX watchlist and defaulted on notes repayment in 2016.

 

Then, Kimpton took the helm in 2017 as AusGroup&rsquo s fifth CEO in six years. As recently as last year, the company&rsquo s prospects seemed perky. Oil prices were recovering from their historic lows, which was reinvigorating activity in the oil and gas space. AusGroup actually turned the corner in FY2021, with a net profit of A$1.2 million (S$1.2 million) &ndash a reversal from losses in the preceding year amounting to A$59.5 million.

 

The company scored a big win in FY2021 by landing a 10-year maintenance contract from oil major Chevron, its key client. The new job vaulted AusGroup&rsquo s order book to A$1.035 billion for its fiscal year ended June 2021, from roughly one-fourth of that in the previous year. It also cemented AusGroup&rsquo s status as one of the leading maintenance service contractors in the liquefied natural gas (LNG) sector.

 

Repeat orders and contract extensions led by post-pandemic recovery in the offshore and marine space helped boost AusGroup&rsquo s market share, particularly in the maintenance and turnaround market sectors. And new contract wins in the resources and minerals sector in Western Australia lent further hope that the group would be able to generate positive operating cash flows.

 

In FY2022, however, AusGroup hit troubled waters again. While revenue rose 26 per cent to A$245 million, it slipped back into a loss for the year of A$32 million. The red ink was led by outstanding claim positions from one client on a challenging construction contract, the East Rockingham waste-to-energy project in Western Australia, as well as non-cash impairments recognised on the carrying value of the NT Port & Marine Port business in Northern Territory.

 

A repayment &ndash for A$41 million in multicurrency notes due in December &ndash also looms. AusGroup has held various meetings with noteholders to negotiate an extension.

 

These events may have forced AusGroup into a court-supervised restructuring via the JM process. The hearing for the interim JM application has been fixed for Nov 30.

 

Oil&rsquo s volatile swings have dragged many Singapore offshore companies through the mud in recent years. AusGroup is its latest casualty, but it is unlikely to be the last.