Singapore oil trader ZenRock owes more than $600 mln - court document

China Aviation Oil (Singapore)

12/05/2020 01:49

(Repeats story published earlier, with no changes to text)
    * Six banks listed as ZenRock's secured creditors
    * ZenRock has outstanding balances of hundreds of
millions-document
    * Police raided ZenRock's office - source 

    By Jessica Jaganathan
    SINGAPORE, May 11 (Reuters) - Singapore-based ZenRock
Commodities Trading Pte Ltd, hit by tumbling oil prices and the
coronavirus pandemic, owes more than $600 million to creditors,
the company said in a court filing seen by Reuters on Monday.
    In the application for "moratorium relief", a form of
bankruptcy protection, filed last Wednesday, the company said it
owed at least six banks a total of $166.1 million and had
outstanding balances of about $449 million in total with at
least 10 unsecured creditors.
    ZenRock did not immediately respond to a request for
comment.
    In its application, ZenRock said it ran into financial
difficulties as the oil price collapse and coronavirus disrupted
trading just after it had expanded its sales and back office
operations last year.
    "ZenRock is now in financial difficulties for the following
broad reasons," it said in the application, listing "severe
disruption" to trade caused by the coronavirus, a "steep and
sustained decline in crude oil prices" and a tightening credit
market "exacerbated" by banks' increased caution.
    "Partly in consequence of the above, ZenRock is facing
difficulties in collecting accounts receivable of approximately
$120.5 million," it said in the application.
    ZenRock's application came after HSBC Holdings PLC  HSBA.L 
sought to place the oil trading company under judicial
management, where a court appoints an independent manager to run
the affairs of a financially distressed company, four people
familiar with the matter said on Wednesday.  urn:newsml:reuters.com:*:nL4N2CO0FD
    On Friday, Singapore's High Court appointed such an interim
manager after a virtual hearing, two sources with knowledge of
the matter said.  urn:newsml:reuters.com:*:nL4N2CQ1FR
    Reuters was unable to review the documents related to the
appointment.
    ZenRock's "moratorium relief" was also lifted during the
hearing, one of the sources said. Such relief automatically
takes effect with an application and lasts for 30 days or until
a court hearing, whichever is earlier.
    Late last month, ZenRock issued a statement to reassure
clients that it was not under financial duress after global oil
and fuel prices slumped.  urn:newsml:reuters.com:*:nL3N2CB27M
    
    CREDITORS
    HSBC has alleged that ZenRock engaged in a series of "highly
dishonest transactions" that included using the same oil cargo
to obtain loans from at least two different lenders, according
to a separate affidavit seen by Reuters.  urn:newsml:reuters.com:*:nL4N2CQ1FR
    Singapore police raided ZenRock's office on Friday after
HSBC filed a report, a source with knowledge of the matter said.
    A police spokeswoman said in an email on Friday that it was
"inappropriate" to comment.
    Besides HSBC, ZenRock has five other secured creditors
including Natixis Bank  CNAT.PA , ING Bank  ING.AS , Credit
Agricole  CAGR.PA  and Bank of China  601988.SS , according to
the court filing by ZenRock.
    Swiss bank Banque de Commerce et de Placements (BCP) is the
sixth creditor, the document showed.
    Natixis and BCP declined to comment while there was no
immediate response to Reuters requests for comment from the
other banks. 
    The document also included a list of ZenRock's top 10
unsecured creditors as of Feb. 29, 2020, for a total amount
close to $449 million.
    These creditors are: French oil major Total's  TOTF.PA 
Totsa Total Oil Trading SA, Malaysian state energy firm
Petronas'  PETR.UL  Petco Trading Labuan Co Ltd, Thai energy
major PTT PCL's  PTT.BK  trading companies in Singapore and
London, Angola's Sonangol Finance Ltd, oil majors BP's  BP.L  BP
Singapore Pte Ltd and Royal Dutch Shell's  RDSa.L  Shell
International Eastern Trading Company.
    PetroChina International Singapore Pte Ltd, a unit of
PetroChina  601857.SS , South Korea's Daelim Corp, Singapore,
and China Aviation Oil (Singapore) Corp  CNAO.SI  are also on
the list of unsecured creditors.
    "These trade creditors are unsecured but the obligations are
mostly matched against incoming receivables," ZenRock said in
the court filing.
    BP, Shell and Total declined to comment. The other companies
did not immediately respond to Reuters requests for comment, but
four sources with direct knowledge of the matter said Sonangol,
China Aviation Oil and PTT International no longer had any
outstanding amounts with ZenRock. 

 (Reporting by Jessica Jaganathan; Additional reporting by
Anshuman Daga, Roslan Khasawneh, Koustav Samanta, Florence Tan,
Seng Li Peng, Shu Zhang, Chen Aizhu and Chayut Setboonsarng;
Writing by Florence Tan; Editing by Nick Macfie and Nick
Tattersall)
 ((Florence.Tan@thomsonreuters.com; +65 6870 3497; Reuters
Messaging: florence.tan.thomsonreuters.com@reuters.net))