Hong Kong-based oil and bunkering firm Brightoil Petroleum Holdings on Friday (31 July) published a quarterly update announcement on its position regarding the Listing Department’s recommendations to delist the company altogether. 

When the trading of Brightoil on HKSE was suspended in 2017, the company said it “started preparation of the resumption without delay” based on the given conditions from HKSE.

Brightoil explained that due to certain unexpected events including:

1. extensive time required to determine the scope and complete of forensic investigation which was just concluded
2. postponement of audit work pending for the result of the forensic investigation
3. The resignation of PricewaterhouseCoopers as auditors of the Company; 
4. substantial time spent in negotiation with creditors in debt restructuring;
5. longer than expected lead time in going through the High Court of Singapore auction process for disposal of the Group’s vessels and purchaser seeking approval for acquisition of the Zhoushan Oil Storage and Terminal Facilities
6. Covid-19 and its various travel restrictions hindering audit procedures

The resumption was expected to take longer than originally contemplated, and it submitted a resumption plan in January 2020, which included an application to seek an extension of the resumption deadline to 29 May 2020. 

On 24 February 2020, the Listing Department informed Brightoil that it had failed to fulfil all the resumption conditions and the department would proceed to recommend the Listing Committee to delist Brightoil on 27 February 2020.

On 25 February 2020, Brightoil said it wrote to the Stock Exchange and requested to read the reasons of the Listing Department’s recommendation, to be present in the Listing Committee and make written or oral submission to the Listing Committee. 

Brightoil also requested the Listing Department not to present the case to the Listing Committee unless its requests are met. 

However on 28 February 2020, the Stock Exchange notified Brightoil that the Listing Committee had decided to:

1. reject the company’s various requests
2. cancel the company’s listing 

The committee reasoned that listing rules do not enforce the right of companies to receive written explanations nor grant them any form of oral hearing before the committee for the department’s recommendations. 

If any company is dissatisfied with the committee’s decision and would like to be granted the above, an appeal may be made to the Listing Review Committee on a de novo review basis of the company’s merits. 

As to the Listing Committee’s decision to delist Brightoil, it explained that it did not consider the ‘unexpected events’ presented by the company to qualify as extenuating circumstances and Brightoil had failed to fulfill the given conditions to resume its trading.

In the published update, Brightoil claims that the Listing Department and the Listing Committee was “grossly unfair” towards the company.

Brightoil added that its applications for judicial review against the delisting decision made by the Listing Committee on the ground of procedural unfairness were dismissed by the High Court of Hong Kong after being heard. 

With regards to being delisted, Brightoil noted that listing rules state that the Listing Committee may extend the remedial period in exceptional circumstances or there are factors outside the company’s control.  

Alongside the circumstances above, Brightoil states that it has taken various remedial actions to comply with the Resumption Conditions including:

1. Forensic Investigation – RSM Corporate Advisory (Hong Kong) Limited has issued the investigation report, detailing the findings of their investigation on the events which have led to suspension in trading. 
2. Outstanding Financials Results – Brightoil has published the management account for the financial years ended 30 June 2017, 2018 and 2019, and for the six months ended 31December 2017 and 2018 on 31 January 2020. The Company expects all the outstanding audited annual results and unaudited interim results to be published in due course; and
3. Debt Restructuring and Discharge of Winding-up Petitions – Upon completion of the debt restructuring, the total debt amount would be substantially reduced with various loans extended from 1 to 12 years and the winding-up petitions are expected to be discharged.

Brightoil said it has since made a formal request to the Stock Exchange for a review of the Listing Committee’s decision by the Listing Review Committee and a hearing date has been set for Monday, 31 August, 2020. 

Trading in the company’s shares will remain suspended until further notice and Brightoil said it will make further announcements as and when appropriate.

Earlier developments of Brightoil (since late 2017 to date) can be found in the search results here. 

Photo credit: Manifold Times
Published: 4 August, 2020