Singapore court okays winding up of oil trader Hin Leong

FILE PHOTO: Pipelines run down the deck of Hin Leong's Pu Tuo San VLCC supertanker in the waters off Jurong Island in Singapore July 11, 2019. Picture taken July 11, 2019. REUTERS/Edgar Su/Fiel Photo

Singapore’s High Court on Monday approved an application to wind up collapsed oil trading firm Hin Leong Trading Pte Ltd, marking the end of what was once one of Asia’s top oil traders, three sources familiar with the matter said.

Hin Leong, owned by Singaporean tycoon Lim Oon Kuin and his children, racked up some $4 billion in debt and entered court restructuring nearly a year ago.

The company had been seeking to restructure its debts after the oil price crash last year when Lim admitted in a court document to directing the firm not to disclose hundreds of millions of dollars in losses over several years.

Court-appointed judicial managers Goh Thien Phong and Chan Kheng Tek from accounting firm PwC had submitted an application to wind up Hin Leong on Feb. 5 and have been appointed as joint liquidators of the company, the sources said, speaking on condition of anonymity as they were not authorised to speak with media.

The Lim family, their lawyer, Singapore High Court, PwC, Goh and Chan did not immediately respond to Reuters’ requests for comment.

Hin Leong, which was set up in 1973 to trade primarily in petroleum products, was placed under judicial management in August, last year.

Under judicial management, a court appoints an independent manager to run the affairs of a financially distressed company in the place of existing management.

When a company is wound up, its business will stop operations and its assets will be handed over to an independent liquidator.

In a court document filed by the judicial managers last month and seen by Reuters, the managers said that efforts to sell Hin Leong Trading and its affiliated companies as an integrated group were not successful.

They said that potential investors had included state-owned enterprises and other companies from China as well as several regional and global traders in the oil and gas industry.

They added that as of Oct. 31, last year, Hin Leong had assets with an estimated value of $273.28 million and total liabilities of about $4.59 billion.

With all trading and operations at the company having stopped and no viable proposal on hand for any injection of funds by an investor, the company is “not in a position to trade out of its insolvency or restructure its debts”, they said, adding that as such, the company should be wound up.

Reporting by Jessica Jaganathan and Roslan Khasawneh; editing by Carmel Crimmins

Reuters

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.