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OW Bunker's US units file for bankruptcy protection, Korea refiners mull legal action: reports
US UNITS of OW Bunker A/S, the Danish shipping-fuel supplier that filed for bankruptcy after reporting a US$125 million fraud at its Singapore unit, sought creditor protection in Connecticut.
According to Bloomberg, three OW Bunker units filed Chapter 11 petitions on Thursday in US Bankruptcy Court in Bridgeport, listing assets of as much as US$50 million against debt of as much as US$100 million. The parent filed for bankruptcy on Nov 7 in Denmark.
The company - estimated to have about 7 per cent of the global market for bunker, a liquid fuel refined from crude oil and used to power ships - went from a US$1 billion valuation after its initial public offering in March to bankruptcy last week, sending shock waves through Denmark's investor community.
OW Bunker reported two Singapore employees to police over the alleged fraud, while also saying it lost US$150 million more on bad risk management.
According to Bloomberg, company records show that Dynamic Oil Trading (Singapore) Pte, the unit of OW Bunker at the centre of the fraud allegations, had US$2.1 billion in sales from its incorporation in August 2012 to December 2013.
Meanwhile, Reuters has reported that South Korean refiners are also contemplating legal action against OW Bunker.
"We are considering all possible legal actions ... We don't have exact schedules over legal actions, though," a spokeswoman at SK Innovation Co Ltd, which fully owns South Korea's largest refiner SK Energy, told Reuters by phone. She declined to comment on the size of the refiner's losses.
Another South Korean refiner GS Caltex Corp, a joint venture between GS Holdings and Chevron Corp, is also considering legal action, a spokesman said, without elaborating.
South Korea exports around 700,000 tonnes of bunker fuel oil a month on average, and OW is estimated to have traded and sold around 100,000-150,000 tonnes a month, traders told Reuters.
In Singapore, firms that have so far made claims against OW Bunker or one of its subsidiaries are: Hin Leong Trading, Golden Island Diesel Oil Trading Pte, Bunker House Petroleum Pte, Equatorial Marine Fuel Management Services Pte, and Panoil Petroleum Pte.