OW Bunker fallout could lead to exit of Opet S'pore

Singapore

THE fallout from the OW Bunker scandal is far from over.

Bunker provider Opet Trade (Singapore) will reportedly soon exit the industry as a result of its large exposure to the Danish marine fuel supplier, which collapsed last November after allegations of fraud hit its Singapore subsidiary, OW Bunker Far East.

Opet Trade (Singapore) is likely to leave the fuel oil-and-bunker fuel markets in the second half of the year, trade publication Platts reported.

It has already taken the necessary first steps to do so, said Platts, which quoted sources as having said that Opet had contacted trading counterparties to close off their trading accounts, sort out bankers' guarantees and settle outstanding payments.

Opet, which is headquartered in Turkey, is said to have declined comment.

Last week, a company spokesman told Reuters that the company planned to shut down its six-year-old Singapore office; a separate company source said the operation had suffered a series of exposures to OW Bunker and other insolvent companies.

The company reportedly had exposure of up to US$33.2 million to OW Bunker Far East and its subsidiary, Dynamic Oil Trading (DOT).

Its Singapore operations had previously also been exposed to other insolvencies - notably of Vanguard Energy in 2013, and Baxus Marine, the year before that.

Opet, a subsidiary of Turkey's biggest conglomerate KOC Holding, incorporated its Singapore arm in 2008 and has about a dozen employees, trading an estimated 100,000 to 150,000 tonnes of fuel oil a month, Reuters stated.

Separately, OW's liquidators from KPMG Services and receivers from PricewaterhouseCoopers (PwC) on Monday announced that they had signed a cooperation agreement to facilitate the prompt collection and receipt of all receivables owed to group's Singapore subsidiary.

The agreement, signed last Friday, sets up a framework for the collection of all receivables owed to OW Bunker Far East, as its objective is to maximise recovery while preserving the rights of all parties concerned.

At a creditors' meeting held in Singapore on Monday, the creditors were informed that a special resolution in writing had earlier been passed by the sole shareholder of OW Bunker Far East to wind up the company.

The creditors' meeting unanimously confirmed the appointment of the provisional liquidators - Bob Yap Cheng Ghee, Chay Fook Yuen and Tay Puay Cheng, all partners of KPMG - as liquidators.

The creditors also resolved to set up a Committee of Inspection comprising not more than five creditors.

Based on the records of OW Bunker Far East, which have not been audited, the company owed an estimated US$330 million to mainly unsecured trade creditors.

ING Bank (ING) is the security agent under an Omnibus Security Agreement entered into in December 2013 between, among others, OW Bunker Far East and ING. ING had on Nov 14, 2014 appointed three partners of PwC as joint receivers to collect receivables assigned and charged to ING.

Clifford Chance Asia act for the liquidators and Drew & Napier, for the receivers.

The outcome of the OW's liquidation process in Singapore will heavily determine the outcomes of the group's creditors in Denmark.

Trade publication Shipping Watch reported last week that trustees dealing with the bankruptcy of OW Bunker Denmark are struggling to get an overall picture of claims against the defunct group's worldwide subsidiaries and that it may take another month for them to have a better idea of the claims and counterclaims for the group.

This is because three-quarters of the group's claims following its crash are scattered in subsidiaries around the world, with Singapore figuring heavily in the equation.

For instance, KPMG is handling DOT's claims against Tankoil Marine Services (Tankoil), which reportedly played a key role in the company's collapse, as it had received oversized credits from the defunct marine fuel supplier.

However, since Tankoil is reportedly not showing signs of financial distress or being anywhere close to shutting down its business, the Danish-based trustees have to wait until the Singapore-based liquidators, KPMG, can get the money owed to them from Tankoil.

Pernille Bigaard, an OW Bunker Denmark trustee, told ShippingWatch: "The only thing we can do is put pressure on the DOT trustees. DOT is bankrupt, so we'll be able to file claims in dividends from that estate."