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News / Business/ Brightoil: Second quarter update on business ops and resumption process

Brightoil: Second quarter update on business ops and resumption process

31 Jul 2019
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Hong Kong-listed Brightoil Petroleum (Holdings) Limited (Brightoil) on Tuesday (30 July) issued an update on its business operations and resumption process for the quarter ended 30 June (Q2) 2019.

Update on Business Operations

The company, among updates, shared financing banks have tightened credit for the International Trading and Bunkering Unit (ITB) business, thus drastically reducing its trading volume.

As a result, no significant amount of revenue has been generated by the ITB during Q2 2019.

Its fleet of 5 VLCCs, 6 barges and 4 Aframax tankers currently remain suspended due to arrests by related creditors since the end of 2018.

To date, four of the arrested vessels have been sold by auction through a judicial sale process for approximately US $201,584,000.

The remaining 11 tankers are also in the course of being sold, with an estimated total sale proceeds of approximately US $230 to $250 million.

“All proceeds are expected to be used to settle the debts of Singapore BOPS and the Company after repayment of the vessel related debts,” it states.

Brightoil, meanwhile is negotiating with a potential buyer in respect of the sale of all or part of the interests of the Company in Zhoushan Oil Storage and Terminal Facilities.

“The negotiation is on-going but has been prolonged due to negotiation in valuation method and terms of payment,” it updates.

Update on Potential Debt Reorganisation and Winding up Petitions

Presently, various financial institutions are carrying out due diligence activities on Brightoil’s current debt that will require reorganisation.

In addition, the Group is exploring other capital raising initiatives including different financing options and asset disposal with different investors to increase its liquidity.

Brightoil’s Singapore unit on 17 July was granted a moratorium until 5 August 2019 (now re-fixed to 8 August 2019 by the Singapore Court) with a view to giving effect to the Company’s ongoing debt restructuring efforts in Singapore.

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

In the meantime, the High Court of Hong Kong has, by consent of the Petitioner, vacated and adjourned the company’s winding up petition.

“The adjournment by consent was the result of ongoing and amicable discussion with the Petitioner and other key creditors of the Company,” it states.

“The Company has made progress by entering into a settlement agreement with one of the key creditors on 19 July 2019, and obtaining commitment letters from several creditors showing support for the Company’s debt restructuring efforts.

“The Company will continue to negotiate with its key creditors for the purpose of resolving the Petition by way of a consensus debt reorganisation.”

Progress on Review and Resumption Plan

Since the resignation of Brightoil’s independent non-executive directors on 19 June, Brightoil has formed a new Independent Control Committee (ICC) with active personnel to replace the Independent Investigation Committee comprising of resigned Directors as members.

The ICC is seeking advice from a new financial adviser and auditors to understand the latest audit status of Brightoil, identify issues related the company’s outstanding financial results, and take further action to complete a Review of the company.

“As soon as the Review is completed, the ICC will report to the Board on the findings and results of the Review,” says Brightoil.

“It is expected that the Company will then make further announcement(s) about the findings and any appropriate remedial measures, and liaise with the Auditors to complete the audit of the Company’s financial statements in order that the Company can publish the Outstanding Financial Results.”

Continued Suspension of Trading

Trading of Brightoil’s shares on the Hong Kong Stock Exchange has been suspended since 3 October 2017 pending the publication of the Outstanding Financial Results, and will remain suspended until further notice.

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

Related: Brightoil provides updates on winding up petitions at SG, HK courts
RelatedBrightoil: Independent non-executive Directors leave over audit review
RelatedBrightoil issues update on winding-up petition and sale of vessels
RelatedDr Sit Kwong Lam returns to Brightoil as Strategic Adviser
RelatedBrightoil Petroleum announces new Chairman and acting CEO
RelatedBrightoil former Chairman undertook $1.4 billion in personal guarantees
RelatedOfficial: Dr Sit Kwong Lam leaves Brightoil Petroleum Holdings
RelatedHong Kong High Court issues bankruptcy order against Brightoil Chairman
RelatedBrightoil aggregate debt has reached approximately $1.9 billion, it updates
RelatedBrightoil 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

Published: 31 July, 2019

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