Swiber’s judicial management order only delays the inevitable: analysts

It’s only valid for 180 days.

The firm’s news that it is being liquidated stunned heavily geared O&M and financial firms.But even as it has shifted to a softer route of being under judicial management, analysts say the move only delays the inevitable.

According to a report by UOB Kay Hian, even if oil prices rise, a recovery in earnings is not on the cards yet as service prices remain depressed.

“Service prices need to rise in order for companies to repair their balance sheet,” the report said.

However, UOB Kay Hian added that the latest string of earning misses amongst the supermajor oil companies will likely keep it depressed for longer.

“As such, a judicial management order only delays the inevitable series of cascade defaults necessary to repair the sector,” UOB Kay Hian said.