Xihe seeks to restructure business amid OCBC's JM application

OIL tanker shipowner Xihe Group, which is linked to the Lim family of troubled oil trader Hin Leong, plans to embark on a "consensual restructuring" with its lenders and sell some of its vessels, the company said in a statement on Thursday.

Its statement comes ahead of a Singapore High Court hearing on Aug 13, at which Hin Leong creditor OCBC Bank seeks to bring Xihe and four of its vessel-owning units under judicial management.

On Wednesday, Bloomberg reported that the Lim family is trying to block OCBC's request. The report cited an affidavit filed by Xihe's interim chief executive Kenny Lim, who said that the bank's application will "disrupt the constructive discussions" that Xihe has had with lenders.

Kenny Lim is the brother of Hin Leong founder Lim Oon Kuin, also known as O.K. Lim.

In the Thursday statement, Xihe said it is working with the interim judicial managers of Hin Leong and its unit Ocean Tankers Pte Ltd (OTPL) to seek redelivery of some vessels. A number of bareboat charter contracts that Xihe had entered into with OTPL and Hin Leong have been terminated, and most of those vessels have not been redelivered.

"There is a market for chartering out these vessels and Xihe is actively pursuing opportunities to re-deploy them," Xihe said.

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It is also seeking to downsize its fleet. The company said that it has concluded the sale of several of its vessels and is in discussions with some potential buyers on a programme of sales.

This week, Xihe successfully took redelivery of its 108,953 DWT oil tanker Ocean Queen from Hin Leong, its bareboat charterer, and OTPL, which is the ship manager. The vessel is now under the technical management of a newly-appointed ship manager.

Xihe added that O.K. Lim and his children are no longer part of the management team. A new board of directors, consisting of a majority of independent directors, is also being finalised as part of the consensual restructuring with Xihe's lenders.

"Xihe has been updating its lenders regularly on its strategic plans and the direction it has charted. It is confident of getting its business back on track and with full commitment to bring about the best outcome for all its stakeholders, partners and clients," the company said.