Gulf Oil buys OK Lim's Ocean Tankers assets in Singapore

Singapore

GULF Oil International, part of the India-based Hinduja conglomerate, has inked an agreement to acquire a lubricant blending plant with wharf access, a storage tank farm and a terminal facility from Hin Leong-linked Ocean Tankers.

The assets, located in the Tuas area of Singapore, will continue to operate as a going concern after the acquisition, Gulf Oil said in a press statement on Tuesday night.

The agreement is subject to closing conditions, the downstream lubricant firm added, without disclosing the deal price.

Ocean Tankers, one of the biggest tanker owners in the world, is part of the troubled Hin Leong empire and has been placed under judicial management.

It is owned by embattled Hin Leong Group's founder and oil tycoon Lim Oon Kuin, better known as OK Lim, who was recently charged with abetment of forgery for the purpose of cheating. The group's insolvent trading arm, Hin Leong Trading (HLT), had racked up nearly US$4 billion of debt.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

Entities that have filed lawsuits against the Lim family and the group included HLT's judicial manager PwC, major creditor HSBC and Italy's UniCredit.

Although Gulf Oil did not name the assets in its statement, Ocean Tankers' website states that the Singapore-based company wholly owns Tuas Terminal, an integrated facility for the handling and storage of liquid petroleum products. The terminal includes berths, about 97,680 cubic metres of storage capacity, a 200-metre wharf and a lubricant blending plant.

Gulf Oil said it will continue to support and grow the existing customer base of Ocean Tankers.

"We are excited to welcome the associated employees to the global Gulf family and engage with all stakeholders post-closing," said Mike Jones, chief executive of Gulf Oil.

The company owns and operates blending plants in Argentina, China, India, the Philippines and the United Arab Emirates, showed Hinduja's website. It offers engine oils, coolants, brake fluids and more.

Mr Jones added that the Singapore facility provides a strategic opportunity for his company to invest further in the marine segment and grow its market share in marine lubricants and other services.

The facility will also serve as a regional hub for Gulf Oil to accelerate its business development plans in South-east Asia's automotive sector, particularly in Vietnam, Malaysia and Thailand, as well as in the Oceania region.

Reuters reported in October that Ocean Tankers had applied to a Singapore court to return most of the ships it manages to the shipowners, as cash was running low and Ocean Tankers would not be able to maintain the fleet.

If successful, this would allow the chartering giant to resume its cash-generating business such as its oil lubricants business, Reuters added.

Ocean Tankers was spending US$540,000 a day to maintain around 150 vessels, showed judicial manager EY's update sent to creditors and other stakeholders. EY also estimated then that by early November 2020, the company would not have sufficient cash to continue maintaining its fleet and the operations of its lubricant plant, storage and terminal business, Reuters reported.

Separately, in April, energy giants Vitol and China's state-run Sinopec were said to be among industry titans that were exploring buying the Lim family's 41 per cent stake in Universal Terminal, an oil storage terminal at Jurong Island.