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KS Energy and KS Drilling placed under IJM; OCBC faces USD 282 million exposure

25 Sep 2020

Editor: The following article is a summary of the full 14-page judgement from the High Court of the Republic of Singapore. The complete document published on 18 September 2020 is available here.

The High Court of Singapore has on Friday (18 September) granted Oversea-Chinese Banking Corporation Limited’s (OCBC) application for KS Energy Limited (KSL) and sister company KS Drilling Pte Ltd (KSD) to be placed under interim judicial management, according to a court document seen by Manifold Times,

According to the document, OCBC has over the past decade, extended several loan facilities to the KSE Group including a “Jumbo Loan” amounting to USD 282 million (exact: USD 282,283,332.20) in July 2010, and a further “bridging loan” of USD 5 million in July 2017. 

KSE executed a deed of guarantee dated 27 July 2010 in respect of the Jumbo loan for up to USD 150 million, as well as a further deed of guarantee dated 9 September 2017 in respect of the July 2017 “bridging loan”.

The court acknowledged that between 2016 and 2019, the KSE Group faced financial difficulties where in 2019 the reported loss after tax for the KSE Group nearly doubled to USD 104.4 million from 2018, while KSD recognised a loss before tax of USD 40.7 million in its unaudited financial statements for2019. 

Compounding KSE Group’s difficulties, Kris Wiluan, the then Chairman of the KS Companies and CEO of KSE was charged with 112 charges on 5 August 2020 for engaging in false trading and market rigging of KSE shares, noted the Court.

Kris Wiluan has since resigned from the management positions and been replaced by his son Richard James Wiluan, who was the Executive Director of KSE and CEO of KSD at the time.

Given the circumstances outlined, OCBC said it has “lost confidence” in the management of KSE and KSD and applied for the companies to be placed under interim judicial management. 

OCBC alleges the KSE Group continues to suffer heavy losses, and has withdrawn support moving forward.

It also alleges KSD is “burning through slightly over USD 1,000,000 per month in manpower and maintenance costs associated with its fleet of rigs”.

The hearing for the companies to be placed under judicial management has been scheduled for Tuesday (13 October), 2.30 pm at the Singapore High Court.

Related: Hearing date set for OCBC application to place KS Energy under judicial management
Related: Singapore: CEO of KS Energy Kris Wiluan facing false trading and market-rigging charges

Photo credit: Manifold Times
Published: 25 September, 2020

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