Business

Aegean Chapter 11: Bondholders object Mercuria’s $532 million DIP Facility

‘It is an insider transaction designed solely to benefit Mercuria and is not in the best interests of the Debtors’ estates.’

Published

8 years ago

November 9, 2018

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An Ad Hoc Group of bondholders with investments in troubled New York-listed bunkering firm Aegean Marine Petroleum Network (Aegean, or, Debtors) on Thursday filed an objection at the U.S. Bankruptcy Court over a debtor-in-possession (DIP) financing facility offered by Mercuria to bail out Aegean.

“The Mercuria DIP Facility should not be approved because it is an insider transaction designed solely to benefit Mercuria and is not in the best interests of the Debtors’ estates,” they alleged in a court document seen by Manifold Times.

“Mercuria’s onerous insider DIP financing facility which, among other things, is designed to syphon value from the Debtors’ unsecured creditors for Mercuria’s benefit and facilitate Mercuria’s acquisition of all of the Debtors’ assets via an insider credit bid under Bankruptcy Code section 363.”

Mercuria has earlier agreed to provide more than $532 million in postpetition financing to fund the chapter 11 process and Aegean’s working capital needs.

“Nominally, the Mercuria DIP Facility provides the Debtors with approximately $532 million in DIP financing,” claims the Ad Hoc Group.

“In reality, however, Mercuria will provide the Debtors with, at most, only an incremental $152 million of financing through revolving postpetition credit facilities and a new delayed draw term loan. The remaining $380 million of “DIP financing” is in the form of a roll up of Mercuria’s prepetition debt.

“Mercuria seeks to implement this roll up in an accelerated manner, with 50% of Mercuria’s prepetition debt to be rolled up automatically upon interim approval of the Mercuria DIP Facility and the remaining 50% of Mercuria’s prepetition debt to be transformed into postpetition debt through a ‘creeping roll up’ as prepetition receivables are collected during the early stages of these chapter 11 cases.

“If approved, the roll up would not only convert all of Mercuria’s prepetition debt into superpriority administrative expense claims, it would provide Mercuria with substantial credit enhancement.”

The group further alleges the Mercuria DIP Facility, and the path proposed by Mercuria in Aegean’s chapter 11 cases, “is a prime example of an insider transaction that should be subjected to heightened scrutiny to ensure a value-maximizing reorganization for all of the Debtors’ stakeholders.”

“Yet, since Mercuria entered into the MOU with the Debtors, Mercuria has sought to execute on its self-serving loan-to-own scheme.”

The Ad Hoc Group explained it had delivered a term sheet on July 6, 2018 to Aegean to provide up to $50 million in secured financing to address the November 1 maturity of the 2018 Notes.

However, Mercuria entered into a Memorandum of Understanding (MOU) with Aegean a day before on July 5, 2018 for a US$1 billion trade finance facility.

“From that point forward, Mercuria improperly exercised control of the Debtors to block any meaningful negotiation with other potential financing parties, refusing to consider restructuring proposals that would have avoided the need for the commencement of these cases,” they say.

“The MOU that was executed between Mercuria and the Debtors on July 4, 2018 was an overreaching agreement representing the first step in Mercuria’s scheme to take control of the Debtors.

“Pursuant to the MOU, Mercuria agreed to acquire the Debtors’ U.S. and global revolving credit facilities and, upon acquisition of the facilities, Mercuria would receive 30% of the Debtors’ common stock and the right to appoint a representative to the Debtors’ board of directors.

“From this initial agreement with Mercuria, it was clear that Mercuria was not interested in a traditional lender-borrower relationship but, rather, desired to—and started acting like—a controlling stakeholder of the Debtors.”

A timeline organised list of events preceding the current development have been recorded by Manifold Times below:

Published: 9 November, 2018

Legal

Singapore withdraws remaining 127 charges against Hin Leong founder OK Lim

Lim Oon Kuin, also known as OK Lim, was issued a stern warning and a district court granted him a discharge amounting to an acquittal for these charges on 17 July.

Published

22 hours ago

July 21, 2026

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Founder of collapsed oil trader Hin Leong Trading, Lim Oon Kuin, also known as OK Lim, has had the remaining 127 charges against him withdrawn, according to The Straits Times on Monday (20 July).

OK Lim was issued a stern warning and a district court granted him a discharge amounting to an acquittal for these charges, including those for cheating, on 17 July. The discharge means Lim cannot be prosecuted again for the same offences.

Lim, 84, is currently serving a 13½-year prison sentence after the High Court reduced his original 17½-year jail term in March 2026. He was convicted in 2024 on two cheating charges and one count of abetting forgery in a case prosecutors described as one of Singapore’s most serious trade finance frauds.

Lim was convicted in May 2024 of two charges of cheating the Hongkong and Shanghai Banking Corporation (HSBC) and one count of abetting forgery that proceeded to trial out of a total of 130 criminal charges.

He was first charged in court on 14 August 2020, and was subsequently handed further charges in court on 25 September 2020, 30 April 2021 and 24 June 2021 for his role in perpetuating fraud on various financial institutions.

A total of 130 charges were eventually brought against him for cheating and forgery-related offences.

Photo credit: Sora Shimazaki
Published: 21 July, 2026

Winding up

Singapore: Coastal Logistics Pte Ltd to be wound up voluntarily

Coastal Logistics was reportedly affiliated with troubled Singapore bunker player Coastal Oil (Singapore) Pte Ltd.

Published

22 hours ago

July 21, 2026

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Several resolutions for Coastal Logistics Pte Ltd were made during an extraordinary general meeting held on 14 July, according to a notice in the Government Gazette on Friday (4 July).

The following resolutions were duly passed during the meeting:

As Special Resolution

That it has been proved to the satisfaction of the meeting that the Company cannot by reason of its liabilities continue its business and accordingly the Company be wound up voluntarily pursuant to Section 160(1)(b) of the Insolvency, Restructuring and Dissolution Act 2018 (No. 40 of 2018);

As Ordinary Resolutions

that Mr. Wong Pheng Cheong Martin and Ms. Koay May Yee, both care of FTI Consulting (Singapore) Pte Ltd, One Raffles Quay, #27-10 South Tower, Singapore 048583 be appointed as the joint and several Liquidators of the Company for the purpose of such winding up; and
that the Liquidators be at liberty to open, maintain and operate any bank account(s) or account(s) for monies received by them as Liquidators with such bank(s) as they deem fit; and
that a Committee of Inspection will not be formed.

Manifold Times previously reported Nicholas James Gronow, director of Heng Tong Fuels & Shipping and Coastal Logistics, filed statutory declarations for both companies stating the firms cannot continue their businesses due to liabilities.

Both companies were reportedly affiliated with troubled Singapore bunker player Coastal Oil (Singapore) Pte Ltd.

In 2019, several vessels owned by both firms entered the sale & purchase (S&P) market in Singapore.

Photo credit: Drew Beamer
Published: 21 July, 2026

LNG Bunkering

PIL’s LNG dual-fuel boxship “Kota Elok” arrives in Singapore on maiden call

As the first of 13 new 13,000 TEU vessels joining its fleet, Kota Elok is equipped to operate on LNG and low-sulphur fuel oil that helps reduce our greenhouse gas emissions.

Published

22 hours ago

July 21, 2026

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PIL's LNG dual-fuel boxship “Kota Elok” arrives in Singapore on maiden call

Singapore-based Pacific International Lines Pte Ltd on Monday (20 July) said its first 13,000 TEU LNG dual-fuel container vessel, Kota Elok, recently made her maiden call to Singapore on 15 July.

As the first of 13 new 13,000 TEU vessels joining its fleet, Kota Elok is equipped to operate on liquefied natural gas (LNG) and low-sulphur fuel oil that helps reduce our greenhouse gas emissions.

The vessel also incorporated energy-saving features and digital technologies to reduce fuel consumption and enhance operational performance, as well as a bow windshield to improve aerodynamics, contributing to improved fuel efficiency and lower emissions over the course of long-haul voyages.

“Following Singapore, Kota Elok will continue her voyage on our East Coast Service 1 (ES1) route to South America, calling at ports in Brazil, Uruguay, and Argentina before returning to Asia,” the company said in a social media post.

Kota Elok also became PIL’s first vessel to receive Lloyd’s Register certification for compliance with the IACS UR E26 and UR E27 cyber security requirements.

Developed by the International Association of Classification Societies (IACS), UR E26 and UR E27 are mandatory cyber resilience requirements for newbuild vessels contracted from 1 July 2024.

Photo credit: Pacific International Lines
Published: 21 July, 2026