Singapore oil trader Hin Leong, owes banks including HSBC, ABN Amro and Société Générale almost $4bn. It is reportedly scrambling to restructure its finances as a brutal downturn hits energy markets.
Controlled by self-made billionaire Lim Oon Kuin, the privately-owned company, which is one of Asia’s biggest fuel traders, entered talks with its lenders last week regarding a standstill agreement, according to industry insiders. The company is also said to be exploring a potential rescue deal with Chinese state-run oil company Sinopec.
Jean-François Lambert, a former Trade Finance Banker who runs consultancy Lambert Commodities, said: “This could have repercussions on the willingness of banks to finance commodities in Singapore especially smaller players that are likely to feel the pressure of curtailed bank lines.”
HSBC has the biggest exposure to Hin Leong at $600m, followed by ABN Amro at $300m, while Société Générale has lent the company $240m. In total, around two dozen banks are owed $3.85bn by the company.
Traders were first alerted to problems at Hin Leong when several lenders refused to issue new letters of credit, an important short-term financing tool for trading houses that act as a guarantee of payment to a seller. It is not clear what has caused Hin Leong’s downturn.
Mr Lim’s business empire includes Ocean Tankers, which claims to own more than 100 ships including 14 oil supertankers and is run by his son Evan Lim, and Universal Terminal, an oil storage joint venture with PetroChina
Hin Leong is being advised by accountant PwC and law firm Rajah & Tann.
For more information visit www.hinleong.com.sg
