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Update: Brightoil plans ‘disposal’ of entire international oil trading and bunkering business

05 Feb 2020

Hong Kong-listed Brightoil Petroleum (Holdings) Limited (Brightoil) on Wednesday (4 February) shared several details of its resumption progress for trading on the Hong Kong Stock Exchange (HKSE).

The company recently released information, including the disclosure of its forensic investigation and the publication of its financial results, to meet HKSE’s resumption conditions.

Resumption plan

The latest update noted Brightoil planning the disposal of its oil trading and bunkering arm as part of its resumption plan; this was a much wider development when compared to an earlier announcement specifically stating disposal of Brightoil Petroleum (S’pore) Pte. Ltd.

“To resume trading in its Shares, the Company submitted the resumption plan to the Stock Exchange on 31 January 2020, including but not limited to, the disposal of the international oil trading and bunkering business (Target Business),” it stated.

“The Company has signed the sale and purchase agreement regarding the disposal of the Target Business and the relevant draft announcement has been submitted to the Stock Exchange for review.”

Loan from Chinese investment firm

Brightoil, meanwhile, noted it has entered into an agreement with the subsidiary of China Huarong Overseas Investment Holding Co., Ltd. for approximately USD 413 million in loan financing, refinancing and working capital support on 1 November 2019.

The loan includes financing of approximately USD 362 million to various Brightoil subsidiaries for a period of five to twelve years for acquiring the company’s debts and restructuring the company’s existing debt.

Additionally, the lender may provide respective additional loans of up to USD 15 million and USD 35.5 million to Brightoil for capital expenditure of its Xinjiang Dina project and general working capital under the premise of the company meeting certain conditions.

Sale of “Brightoil Gem”

The Brightoil Gem has since been sold by the Haikou Maritime Court of PRC for RMB 403.3 million. The first tranche of the net proceeds from sale of the VLCC has been received and applied to settling the debts of the company and its subsidiaries.

Winding-up petitions in Singapore and Hong Kong

Brightoil subsidiary, Brightoil Petroleum (S’pore) Pte. Ltd., has successfully extended its claims moratoria at the Singapore High Court until 3 April 2020 and “made good progress in reaching legally binding settlements with major trade creditors,” it said. The next hearing date has not yet been fixed but is expected to take place in early April of 2020.

Over in Hong Kong, Brightoil noted it has made progress by entering into settlement agreements with other key creditors, while obtaining commitment letters from several creditors showing support for its debt restructuring efforts. The company has made instalment payments pursuant to the settlement agreements that have already been concluded.

Intended sale of Zhoushan oil storage and terminal facilities

On 7 January 2020, Brightoil signed a non-binding “Zhoushan Project Cooperation Framework Agreement” with a potential buyer of its Zhoushan Oil Storage and Terminal Facilities; the company will work towards achieving signing of a binding agreement within three months.

Upstream business

The Caofeidian Oilfield of Brightoil achieved 11.62 million barrels of crude oil production, completing 114% of the annual plan, between January to December 2019.

The construction & installation of the ‘Overall Development Adjustment Plan’ for the Caofeidian project has been finished. Actual construction costs incurred were approximately RMB 2,423 million, which is approximately RMB 500 million below the approved budget of RMB 2,923 million.

As of 31 December 2019, the daily natural gas production of the Dina 1 and Tuzi gas field was 3.03 million cubic meters in aggregate. The preparatory work for the Tuzi gas field booster station and Dina 1-4 new well has begun, and the booster station is expected to be completed in October 2020 to achieve higher production targets.

“The management expects that the upstream business will be the primary focus of the Company’s development in the future,” it states.

Related: Singapore bunker supplier Brightoil Petroleum (S’pore) Pte. Ltd. to be disposed by parent company
RelatedBrightoil publishes unaudited financial results for FY 2017, 2018, 2019

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


Photo credit: Manifold Times
Published: 5 February, 2019

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