Running out of luck with creditors and facing mounting distress, Singapore giant oil trader Hin Leong Trading (HLT) – and its sister company Ocean Tankers – sought indulgence from 23 lenders on Friday (April 17) as it applied for court protection from credit action to ensure its “survival”.
In a letter to lenders that was obtained by The Business Times, HLT director Evan Lim Chee Meng said the firm was facing a “real threat” of legal or insolvency proceedings or “enforcement steps” that would undermine its debt restructuring efforts and jeopardise HLT’s position as a going concern.
HLT, Asia’s largest oil trader, is weighed down by hefty debts of some US$3 billion (S$4.3 billion) and is facing a major crisis as oil prices have been ravaged by the Covid-19 outbreak and a price war among oil majors.
HSBC is the bank with the biggest exposure to Hin Leong at US$600 million, followed by ABN Amro at US$300m.
Three Singapore banks — DBS Group, OCBC Bank and United Overseas Bank — have a combined exposure of at least US$600 million. DBS has the highest exposure of around US$290 million, OCBC Bank is owed about US$220 million, and UOB had let Hin Leong draw down more than US$100 million as at early April, sources said. The Monetary Authority of Singapore has been in touch with the banks on their exposures, according to a report by the Financial Times.
Founded by low-key tycoon Lim Oon Kuin, whom many in the industry describe as a “workaholic”, the company said it was “constrained” to seek a debt moratorium following “numerous demands” for payment by banks and “numerous accompanying calls and emails correspondence”.
Source:Straitstimes
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