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Brightoil aggregate debt has reached approximately $1.9 billion, it updates

01 Feb 2019

Hong Kong listed Brightoil Petroleum (Holdings) Limited, in a quarterly update on the company’s resumption progress and business operations released on Thursday, offered parties a glimpse into its total debt.

“Based on the management's preliminary assessment, the Group presently has aggregate debts of approximately US$1.9 billion with claims of approximately US$250 million made by some creditors of the Group, and therefore require, and is in discussions with the Group's key financiers for, external financing,” it said.

Additionally, Brightoil on 25 January made an application under section 211C of the Singapore Companies Act at the High Court of Singapore; it earlier successfully applied for section 211B of the Singapore Companies Act.

In short, section 211C (Power of Court to restrain proceedings, etc., against subsidiary or holding company) extends the moratorium coverage of section 211B (Power of Court to restrain proceedings, etc., against company) to cover several firms instead of a single entity.

This means creditors will not be able to disrupt operations of parent company Brightoil Petroleum (Holdings) Limited and its subsidiaries, such as Brightoil Petroleum (S’pore) Pte. Ltd., allowing for recovery unhindered by external factors (e.g. vessel arrests, winding up petitions, etc).

Broad Action Limited in early January attempted a winding up petition against Brightoil Petroleum (Holdings) Limited, but later backed out of the petition after discussions.

“The Company believes that the moratorium would provide the Company with the necessary protection against any effort to frustrate the potential debt reorganization for the Group,” it states.

Brightoil, meanwhile, confirms operations of its 5 VLCCs and 6 bunker barges have been temporarily suspended due to arrests by related creditors since the end of last year.

“Based on the management's preliminary assessment, so far the temporary suspension of the operations has affected on no more than two months' income of the respective vessels of the marine transportation sector,” it updates.

“The Group is currently in negotiation with the related creditors and working on the solutions, so that operations of the vessels could be resumed as soon as possible and the impact on the marine transportation sector could be minimized.”

The tightening of credit by financing banks, due to Brightoil’s suspension of trading in the Hong Kong Stock Exchange, has also drastically reduced the business volume of its International Trading and Bunkering Unit.

Brightoil shares stopped trading on the Hong Kong Stock Exchange since 3 October 2017 pending publication of its financial results.

Brightoil in December 2017 engaged an Independent Adviser to provide forensic technology and investigation services to assist with the review of its financial results.

In mid-December 2018, the Audit Committee hired a ‘Further Adviser’ to assist on reviewing the Independent Adviser’s findings and advising on the next steps proposed by the Independent Adviser.

A chronologically organised list of articles concerning Brightoil’s potential debt reorganization is below:

Related: Brightoil creditor claims amount to US $250 million, potential debt reorganisation
RelatedBrightoil to defend against winding up petition at Hong Kong court
RelatedSingapore: Brightoil to apply for six-month moratorium order at High Court
RelatedBrightoil oilfield project secures USD $700 million CNOOC funding
RelatedBrightoil: Plans to sell Zhoushan oil storage terminal, 15 vessels
RelatedShell to offload crude oil cargo from arrested “Brightoil Lion” tanker
RelatedBrightoil VLCC and Aframax tanker arrested at Singapore port
RelatedSingapore: Players to get fuel oil cargoes back from Brightoil bunker tankers
RelatedSingapore: Petrolimex v Brightoil case progresses to Pre Trial Conference
RelatedSingapore: Brightoil bunker creditor list growing with new firms
RelatedSingapore: Petrolimex owed over USD $30 million by Brightoil
RelatedBrightoil signals return to the shipping sector, starts reorganisation of debt
RelatedSingapore: Brightoil bunker tanker fleet placed under Sheriff’s arrest
RelatedSingapore: Toyota Tsusho Corporation seeking $21 million from Brightoil
RelatedQatar National Bank seeks USD $21.59 million debt from Brightoil

A chronologically organised list of articles regarding the trading halt of Brightoil on HKSE is below:

RelatedBrightoil: Independent adviser requests for more information
RelatedBrightoil: ‘Business as usual’ with HKSE’s new delisting rules
RelatedUPDATE: Brightoil Singapore introduces new Acting CEO
RelatedBrightoil: Singapore CEO resigns, trading halt continues
RelatedBrightoil continues suspension of trading activities
RelatedBrightoil: Delay in release of 2018 financial results
RelatedBrightoil: Update on suspension of trading

Photo credit: Brightoil Petroleum (Holdings) Limited
Published: 1 February, 2019

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