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Ocean Tankers placed under interim judicial management

Ocean Tankers placed under interim judicial management
Photo courtesy of Ocean Tankers

Singapore’s High Court yesterday approved the appointment of Ernst & Young representatives as interim judicial managers for Singapore-based Ocean Tankers (Pte) Ltd, to stabilise its business. Ocean Tankers is owned by the Lim family, which also owns troubled oil trader Hin Leong Trading Pte Ltd.

The interim judicial management application by Ocean Tankers did not face any objection from its more than 30 creditors.

Ocean Tankers also withdrew its application for a debt moratorium which was filed last month. Hin Leong and Ocean Tankers initially sought a six-month moratorium on debts of more than USD3.6 billion to 23 banks.

However, Ocean Tankers failed to get a court declaration that its overseas property be protected during the company’s restructuring. This could include more than 100 vessels outside Singapore it claims to have an interest in.

The High Court also directed the applications for judicial management of Hin Leong Trading and its shipping arm Ocean Tankers to be heard together, because there are potential cross claims as well as common shareholders and directors. No date has been set yet for a court hearing.

Ocean Tankers Director Evan Lim Chee Meng, son of Hin Leong Founder and Chairman Lim Oon Kuin, said in court filings that its financial troubles stem from its dealings with Hin Leong, and that its exposure to some claims could amount to USD2.07 billion.

The proposed debt restructuring of Ocean Tankers will inevitably be linked to or intertwined with Hin Leong’s debt restructuring as Ocean Tankers’ potential contingent liabilities are related to the debts owed by Hin Leong to its bank lenders, Lim was quoted as saying by Straits Times.

However, about 85-90% of all cargoes carried by Ocean Tankers-operated vessels are for third-party charterers, and not Hin Leong, according to Lim, which means its business is not entirely dependent on Hin Leong.

“Due to the present buoyant market for oil tankers, Ocean Tankers believes it will be able to generate a healthy profit on charters to third parties that are independent of Hin Leong,” Lim was quoted as saying in court filings.