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SINGAPORE – The court appointed administrator for Ocean Tankers Pte Ltd has applied to the Singapore court to return most of the ships the company manages to the shipowners as cash is running low and Ocean Tankers will not be able to maintain the fleet, two sources with knowledge of the matter told Reuters.
If successful, the move will allow Ocean Tankers, the chartering arm of embattled oil trader Hin Leong Pte Ltd, to resume its cash-generating business, such as its oil lubricants business, for which a sales process, sources said.
Ocean Tankers, Hin Leong, Xihe Holdings and four special-purpose vehicles, all owned by oil magnate Oon Kuin Lim and his son and daughter, have been placed by the Singapore High Court under judicial management for restructuring after Hin Leong accumulated almost $ 4 billion of debt.
Ocean Tankers is spending $ 540,000 a day to maintain about 150 vessels, the sources said, citing the EY receiver’s update sent to creditors and other interested parties last week. Ocean Tankers had chartered these ships, mostly owned by the Lim family, before it ran into financial trouble.
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EY estimated that “at the beginning of November 2020, (Ocean Tankers) will not have enough cash to continue to maintain the ships in the company’s fleet and the operations of the company’s lubrication plant, storage and terminal business.” , according to the update, reviewed by Reuters. .
An EY spokeswoman declined to comment with Reuters, citing the client’s confidentiality. Hin Leong’s court managers at PricewaterhouseCoopers (PwC), the Lim family and their attorney also did not immediately respond to a request for comment.
The ships are incurring costs at a time when they are not generating revenue, the sources said.
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“The JMs are doing everything they can to preserve the oil lubricant business,” said one of the sources.
According to the update, the Lim family were no longer interested in restructuring Ocean Tankers because Hin Leong court administrators had sued the family.
The Lim family had proposed on Sept. 30 that Ocean Tankers “should be put into liquidation instead,” the update said.
