Banks owed US$3 billion by squeezed Singapore oil trader Hin Leong

[The_King]

(Bloomberg) -- Banks have a combined exposure of at least US$3 billion to Singapore’s Hin Leong Trading (Pte.) Ltd. and are in talks with the privately-held oil trader over how to shore up its finances amid concerns over its liquidity, according to people with knowledge of the matter.

The group of lenders including HSBC Holdings Plc, DBS Group Holdings Ltd. and Oversea-Chinese Banking Corp., held a virtual meeting with the trader and its advisers on Tuesday, according to the people, who asked not to be identified because they’re not authorised to speak publicly. As many as 10 banks are involved, according to one of the people. HSBC has the biggest exposure at about US$600 million, they said.

Singapore’s closely-knit oil trading community is gripped by speculation over the predicament of one of its biggest players and the potentially far-reaching impact its difficulties could have on the market and trading partners. Before crude’s spectacular crash, it would have been almost unfathomable that a company of Hin Leong’s status could be in such a position.

Bloomberg reported last week that some banks wouldn’t issue new letters of credit to the trader because of concern over its ability to repay the short-term debt. Nobody responded to calls or emails to the company seeking comment. Spokespeople for HSBC, OCBC and DBS declined to comment.

Founded by legendary self-made Chinese tycoon Lim Oon Kuin, Hin Leong could be the latest casualty of the collapse in oil prices and a heightened caution among lenders to finance commodity trades.

The company was established in 1963 and has grown into one of Asia’s largest suppliers of ship fuel, or bunkers. OK Lim, as the founder is known, built the company from a one-man-one-truck oil dealer to a regional powerhouse with assets including 130 vessels and businesses across oil trading, terminal and storage, bunker supply and lubricants manufacturing, according to its website.

The company’s bunkering arm, Ocean Bunkering Services (Pte.) Ltd., was ranked the third-largest shipping fuel supplier in Singapore last year, according to the city-state’s Maritime and Port Authority. Singapore is the world’s biggest shipping fuel bunkering hub.

Letters of credit are a critical financial lifeline for commodity traders, used as way of financing short-term trade. A bank issues the so-called L/C on behalf of the buyer as a guarantee of payment to the seller. Once the goods have exchanged hands, the buyer repays the lender.

[socrates469bc]

unless hin leong took a short on the futures to cover their physical, no way the company can even the financing.

 

and if not wrong, their ceo shld have taken a big long position to get into this predicament.

 

so no sympathies from me.

 

wahahahhahahahah

[Standing Birdy]

 

[socrates469bc]

Just now, Standing Birdy said:

 

 

the boss is now almost 80 yo, so he is gg liao.

 

really sad for him to see his 57 yrs of work gone in 3 mths.

[Standing Birdy]

2 minutes ago, socrates469bc said:

 

the boss is now almost 80 yo, so he is gg liao.

 

really sad for him to see his 57 yrs of work gone in 3 mths.

If he see open then no big deal. Had a good run. Hope he took some time to smell the roses along the way. Can't bring money along when uplorry so no need to be too attached to it.

[socrates469bc]

1 minute ago, Standing Birdy said:

If he see open then no big deal. Had a good run. Hope he took some time to smell the roses along the way. Can't bring money along when uplorry so no need to be too attached to it.

 

most towkays of that generation usually have all the fortune in his founding biz, maybe will have to declare personal bankruptcy as well.

 

if his son is smart, he will have shifted some money and assets separate from the holding company.

 

but i dont think his son is that smart.