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With nearly $180 million of debt, IPP proposes interim juridical management

27 Aug 2019

UPDATE: A spokesperson from Kairos Oil Trading has clarified with Manifold Times the company does not have any accounts receivables with IPP.

Singapore bunker supplier Inter-Pacific Petroleum Pte Ltd (IPP) and its parent company Inter-Pacific Group Pte Ltd (IPG) on Friday (16 August) filed an application for interim judicial management at the High Court of the Republic of Singapore.

An affidavit filed by Zoe Cheung, the current director of IPP and IPG, on Tuesday (20 August) provided more details of developments leading up to the company’s decision to come under interim judicial management.

It noted that IPG originally had two shareholders, namely Zoe Cheung (85%) and Dr Goh Jin Hian (15%); Dr Goh was a director of IPG and IPP until 20 August 2019 when his resignation took effect. An individual of Pek Chong Beng is the current nominee local director in IPG and IPP, in place of Dr Goh.

The document alleged that IPP posted total accounts receivables of USD 21.07 million from 21 trading counterparties to date; notably, the majority at USD 14.73 million, or 69.9%, of the total figure was from Minerva Bunkering Pte Ltd.

Inter-company receivables of USD 248.36 million from five related firms of Chuang Xin (China) Group Limited, Inter-Pacific Group Pte Ltd, Inter-Pacific Petroleum Trading Pte Ltd, Pacific Energy 8 Pte Ltd and Pacific Ship Management Pte Ltd were declared.

Chuang Xin (China) Group Limited, currently insolvent, undertook USD 237.36 million, or 95%, of the total inter-company receivables.

Significant and verifiable liabilities totalling USD 181.63 million consisted of trade financing from SocGen with an outstanding amount of USD 96.3 million, MayBank banking facilities of USD 69.8 million, and account payables of USD 2.43 million to 10 players; the highest outstanding amount stands at around USD 1.16 million, or 48%, which is owed to Kairos Oil Trading Pte Ltd.

The purported affidavit highlighted IPP, “has been struggling to put its books and accounts into good order. However, as the business was still able to maintain its cashflow to meet its mature liabilities, the company was able to continue its trading flow.”

“However, on 14 June 2019, the Maritime Port Authority (MPA) issued a Port Marine Circular No. 14 of 2019 stating that arising (sic) from an enforcement check on a bunker tanker operated by IPP, the MPA had temporarily suspended IPP’s bunker craft operator license with effect from 27 June 2019 until further notice.

“The reason for the suspension is related to an incident involving an outsourced employee, and IPP is presently investigating the incident and cooperating with MPA in this regard to provide further information as relevant. However, the immediate effect of the suspension was to prevent IPP from operating as a bunker craft operator in Singapore.

“As a result of the suspension of the license, IPP’s business and operations were severely impacted.”

IPP noted the development caused the firm to incur “very significant expense and effort”, together with disruption to its business, as it had to arrange for other operators to take on contracts due to the license suspension.

The suspension also “significantly impacted counterparties’ confidence” in IPP as players which previously offered credit started asking for cash terms, “such that there is insufficient cash to sustain operations.”

Moving forward, the directors of IPG and IPP said they have received a letter from a confidential investor which is a publicly-listed company in Hong Kong who may, amongst other options, take on short term six-month charters of IPG’s vessels to allow for cash generation while providing other solutions pending the outcome of IPP’s licensing issues at Singapore.

Related: Inter-Pacific Group, Inter-Pacific Petroleum under judicial management
RelatedMagnets on MFMs: “Consort Justice” crew pleads ‘not guilty’ to tampering charge
RelatedIPP responds to temporary suspension of bunker craft operator licence
RelatedMPA temporarily suspends IPP bunker craft operator licence
RelatedSingapore: Bunker Cargo officer, crew face charges over alleged MFM tampering

Photo credit: Manifold Times
Published: 27 August, 2019

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