Singapore's Vallianz Holdings Ltd. reported Wednesday that it has received letters from the interim judicial managers (IJMs) of Swiber Holdings Ltd. -- a controlling shareholder of Vallianz -- and the latter's unit, Swiber Offshore Construction Pte Ltd. (SOC), seeking payments of approximately $63.5 million which the IJMs claim are outstanding amount owed to Swiber or SOC as well as statements of accounts from Vallianz to Swiber and/or SOC.
In the letters, the IJMs have also requested reasons for non-payment should Vallianz declines payment of the outstanding amounts.
Vallianz revealed that it has declined payment of the amount in its Aug. 25 reply to the IJMs, citing the substantial commercial dealings between Vallianz and Swiber, including SOC. Through the provision of its services to various Swiber entities on a regular basis, Vallianz would more often than not have receivables due from Swiber.
Also, both firms have conducted business between themselves on an extended credit basis as well as a netting off basis, including the netting off of receivables and payables. This was an established course of dealings in transactions between Vallianz and Swiber with the squaring up of positions reflected in year-end reports of Vallianz and Swiber.
Vallianz explained that the netting off practice allowed the 2 firms to conduct business easily and efficiently, with the assurance that credit would be granted to each other with no fixed term of repayment, and on the expectation that if sums are to be paid, it would be with the ability to net off all that is owed between the 2 groups leaving only the net amount payable to the relevant entity/group.
As such, receivables due to Vallianz that are owed by Swiber must be taken into account when payment/s for the $63.5 million are requested by Swiber
According to Vallianz's June quarter financial statement, the firm had trade receivables and other receivables owing from Swiber of approximately $65.92 million, while trade payables and other payables owing to Swiber stood at around $67.34 million.
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