Singapore’s troubled marine and offshore engineering industry (M&OE) has been boosted by government lending measures for the sector.

IE Singapore has relaunched a bridging loan scheme for companies in the M&OE space, which will allow companies based in the city state access to six-year, S$5mn (about US$3.51mn) bridge loans to tackle cashflow problems. The maximum amount each borrower can access is S$15mn.

IE has also expanded its existing Internationalisation Finance Scheme (IFS), which provides project and asset financing support to the industry. The maximum borrowing per company will be raised to US$70mn from US$40mn, as the government seeks to help arrest the sharp industry decline.

Last month, Singapore’s M&OE industry almost halved in terms of output. Describing its intervention as “one-off measures”, the government will take on 70% of risk-share for both the bridging loan programme and the IFS.

The rest will be borne by IE Singapore, which is the government’s trade development board, and Spring Singapore, also part of the trade ministry.

In a joint statement, IE, Spring and the Ministry of Trade said: “These measures will help to address the intensifying financing challenges faced by the marine and offshore engineering industry in recent months as it experiences a unique and prolonged slowdown.”

The industry has been particularly badly hit by the low oil price. Rig building activity slowed correspondently and dramatically, and while last month’s collapse alone is worried, it shouldn’t be viewed in isolation. The M&OE industry slowed by 31.7% in September and 29.5% in August. The first 10 months of 2016 were 31.5% worse than 2015’s equivalent.

The local banking sector has also been heavily exposed to this downturn, with the collapse of Swiber Holdings, an offshore oil and gas service provider, meaning DBS, OCBC and UOB all took a financial hit.

GTR reported in August that DBS, Singapore’s largest bank, had US$700mn exposure to SwiberAfter the collapse, it was revealed that DBS had given Swiber a bridge loan – the terms of which have not been revealed – on the expectation of an equity injection that never came, and on the strength of an order book that was worth north of US$1bn.

Of the three Singaporean banks, a note from Japanese bank Nomura shows that DBS has US$23bn exposure to the oil and gas sector, 8% of its total lending book; for OCBC it is US$14.3bn, or 7%, while UOB is exposed to the tune of US$14bn, or 6.6%.

Meanwhile, other companies are expected to follow Swiber into financial difficulties, if not down the pan altogether. Troubled oil and gas producer recently engaged Keppel Corporation, one of the world’s largest M&OE companies, to help it restructure its debts.

Kris Energy had previously announced that it was struggling to repay its debts, with Keppel now applying to convert them into shares in Kris Energy, which has oil and gas assets throughout Southeast Asia.