Singapore to help struggling offshore sector

SINGAPORE’S Ministry of Trade and Industry (MTI) is to offer S$1.6bn (US$1.1bn) in loans to help support struggling marine and offshore engineering (M&OE) companies.

The marine and offshore engineering sector in Singapore, and indeed around the world, has been hit hard as a result of the continued downturn in the price of oil and global economic uncertainties. The government is keen to help companies finance their operations and bridge short-term cash flow gaps, and the new measures were developed in collaboration with industry.

SMEs and non-SMEs are eligible to apply so long as they are registered and operating in Singapore and have a minimum of a 30% local shareholding. Companies which can apply include exploration and production (E&P) companies, oil and gas equipment and services companies and their suppliers, offshore services providers, shipyards and contractors to shipyards.

Each applicant will be able to borrow up to S$5m, with ‘borrower groups’, including a company, its corporate shareholders and its subsidiaries, able to borrow up to S$15m, over a period of up to six years. The measures are an M&OE-focussed enhancement of the MTI’s existing Internationalisation Financing Scheme and the SPRING Bridging Loan.

“While there has been a general slowdown in economic growth, the impact has been uneven. The M&OE industry, in particular, is facing a deep and prolonged downturn due to cyclical and structural forces,” said S Iswaran, Singapore’s minister for trade and industry (industry), adding: “These targeted measures aim to help preserve the M&OE industry’s core capabilities which have been built up over the years and will be important to seize future opportunities. The government will continue to monitor the economy closely and stands ready to act if necessary.”

He added that industry consolidation is “inevitable” as companies seek to adjust to the new business environment.