Ocean Tankers distances itself from Hin Leong Trading
Singapore
OCEAN Tankers - a wholly owned unit of Hin Leong Group and Singapore's leading tanker manager - has sought to reassure its partners and customers, and distance itself from the financial woes of the group's trading arm Hin Leong Trading.
"Please note that the company is a separate entity from Hin Leong, and has not guaranteed the debts of Hin Leong," said Ocean Tankers' chief executive Evan Lim Chee Meng in a letter dated April 15.
In the letter that was obtained by The Business Times and addressed to "whom it may concern", Mr Lim referred to "news in the public domain" about Hin Leong Trading having appointed advisers for a debt restructuring exercise.
He added: "Kindly be assured that the company is able to, and intends to carry on its business as usual."
Mr Lim is the son of Hin Leong Group's founder and low-key billionaire Lim Oon Kuin, better known as OK Lim. Based on filings with the Accounting and Corporate Regulatory Authority (Acra), the younger Mr Lim and his sister Lim Huey Ching are also directors and shareholders of Hin Leong Trading - the group's flagship.
On Thursday, BT reported that the oil trading giant, which owes debts of some US$3 billion to over 20 banks, was mulling several options to raise funds and was in talks with lenders. It was also reported that the firm has appointed Rajah & Tann as advisers.
While it is not clear what had led to Hin Leong's debt dilemma, market watchers said it is possible that the trader is feeling the heat from the recent sharp collapse in oil prices.
"I'm surprised this has happened at all. The market must have turned against him because of the fall in oil prices," said a corporate executive in the sector, adding: "The only thing Hin Leong needs most is time - time for oil prices to go up. Until then, everybody needs to stand still. But how long can the banks do that?"
One industry player said: "Traders are resilient people, and will always find a level that they can live with. They may be knocked down for awhile but generally, they will come back up."
Ocean Tankers is one of the biggest tanker owners in the world with more than 100 oil tankers of varying sizes, including 14 very large crude carriers (VLCCs).
Another unit of the Hin Leong Group, Ocean Bunkering Services (OBS), is said to have stopped deliveries of marine fuels to customers, according to a Reuters report. The move follows a slowdown in global shipping activities, leading to a slump in marine fuel demand.
In terms of volume, OBS was Singapore's third-largest bunker fuel supplier last year. It listed on its website a fleet of 14 bunker barges that operates in Singapore port and outside port limits. Attributing to estimates by industry sources, the Reuters article said OBS supplied about 3-4 million tonnes of bunkering in 2019.
The other core business under the Hin Leong Group include Universal Terminal, a commercial storage facility located in Singapore's Jurong Island and which Hin Leong co-owns with China's oil giant PetroChina.
