New Silkroutes undertakes strategic review of physical oil trading division

NEW Silkroutes Group has started a strategic review of its physical oil trading division, IEG, which has been hit by a "significant reduction" in trading volumes and lower oil prices.

The review will include exploring options to scale down, divest, enter into arrangements with creditors, or wind up the oil and trading business of IEG, the mainboard-listed group said on Tuesday.

This comes as New Silkroutes incurred a net loss after tax of approximately US$8.2 million for the financial year ended June 30, largely due to the oil and gas segment. The group added that it is expecting more provisions of expected credit loss while trying to recover the remaining trade and other receivables amid the pandemic.

In addition, IEG's subsidiary, TXZ Tankers Pte Ltd, has been experiencing "challenging situations" in view of the decrease in shipping charters.

Shares of New Silkroutes closed down 8.43 per cent at S$0.076 on Tuesday before the announcement.