Update:  London-based multinational professional services firm Ernst & Young (EY) has reportedly been appointed as Interim Judicial Managers of Ocean Tankers during a hearing at the High Court of Singapore on Tuesday (12 May). There was no reply from the Director of Ocean Tankers to a request for comment from Manifold Times when contacted about the following article:

The Director of Singapore-based energy transportation firm Ocean Tankers (Pte) Ltd (OTPL), a separate entity from Hin Leong Trading (HLT), on Monday (11 May) submitted an additional affidavit at the High Court of Singapore.

The additional document was to supplement an earlier version filed on 6 May.

The latest affidavit, widely circulated within Singapore’s bunkering sector, was obtained by Singapore bunkering publication Manifold Times.

In it, Lim Chee Meng, also known as Evan Lim, provided reasons why he believed OTPL should be placed in judicial management even though its level of business may not return to similar levels before COVID-19.

“Additionally, it may not be easy to completely shake off the market perception of the linkage to the financial woes of HLT,” he stated, explaining the situation first.

“As a result of this relative decline of business, there is therefore a risk that in the next few weeks or months (subject to the timeous collection of the various freight accounts receivables) OTPL may not be able to fully meet all its operational costs and expenses to operate at the same levels as before.”

Lim further stated OTPL has been taking steps to pursue collection of its account receivables and making other plans, such as the sales of OTPL-owned non-core vessels, for debt repayment.

“I wish to highlight however that these steps take time, and that despite these best efforts, OTPL may still encounter cash flow constraints moving forward,” he said.

Lim, meanwhile, highlighted most vessels bareboat chartered to OTPL are owned by ship-ownig special purpose companies owned by Xihe Holdings Pte Ltd or Xihe Capital Pte Ltd (collectively, the Xihe Group) – where his sister Lim Huey Ching and himself are Directors.

He stated OTPL owing approximately USD 106 million for trade payables and USD 208 million in company loans to the Xihe Group.

He explained the relevant Xihe special purpose company will be entitled to terminate bareboat charters and seek re-delivery of the vessel in the event OTPL is unable to make payment; and there have already been some instances of non-payment by OTPL.

“Despite the real prospect of such termination, I remain of the view that OTPL ought be placed in judicial management, as there are reasonable prospects to keep OTPL as a going concern,” he said.

“This is because OTPL has a strong group of employees who have the requisite expertise and experience in ship chartering and management, which has commercial value and should be kept intact.

“Even if the bareboat charterparty agreements with OTPL are terminated, OTPL remains able to sell its charter, technical, commercial and crewing expertise to the new bareboat charterer for a profit, to ensure a seamless transfer of the vessel to the new bareboat charterer.”

An earlier collection of articles preceding the current development are as follows:

Related: Singapore: Ocean Tankers, a separate entity of Hin Leong, seeking judicial management
Related: Singapore High Court concedes interim judicial management to Hin Leong Trading
Related: Report: Hin Leong Trading appoints PwC as interim judicial manager
Related: Singapore’s Police Force commence investigations into Hin Leong Trading
Related: Sembcorp Cogen aborts gasoil supply and storage contract with Hin Leong Trading
Related: Winson Group and ZenRock Commodities reassure fiscal stability despite Hin Leong fiasco
Related: Report: Sinopec expresses interest in Hin Leong Trading stake of Universal Terminal
Related: Report: Hin Leong Trading founder gave instructions to hide USD 800 million losses
Related: Singapore: Ocean Bunkering Services to discontinue marine fuel deliveries
Related: Hin Leong in debt restructuring exercise; Ocean Tankers a separate entity, says CEO
Related: Report: Hin Leong Trading finances under scrutiny, amid credit pull from two banks

Photo credit: Manifold Times
Published: 13 May, 2020