Oil trader GP Global APAC seeks debt moratorium in Singapore By Reuters


© Reuters. FILE PHOTO: A 3D printed oil pump jack stands on dollar bills in this illustration image

By Roslan Khasawneh SINGAPORE (Reuters) – Oil trader GP Global APAC Pte Ltd has petitioned the Singapore High Court for a six-month debt moratorium as its parent company seeks to restructure more than $ 1 billion in debt, according to a director of the company. lawyers and a court document. The parent, GP Global, a major global oil trader and supplier of ship fuel based in the United Arab Emirates, said in July it would restructure the group’s debt by selling assets after lenders cut credit. GP APAC, which has defaulted on loans in recent months, joins a series of defaults among Asian oil trading companies, including Singapore’s Hin Leong Trading Pte Ltd, one of Asia’s largest bunker fuel suppliers, following the collapse caused by last year’s pandemic in oil prices. The parent company, owned by the Goel family of India, said last year that it discovered fraud within the company and filed criminal complaints against some of its employees, while it has faced various lawsuits and repossessions from creditors. The Singapore merchant’s restructuring strategy includes “suspension agreements” with creditors that allow it to sell assets without the threat of creditors taking independent action against the company. “The moratorium request is simply intended to give effect to the agreement in principle and allow GP APAC to have a breathing space to continue with the restructuring,” said Moses Lin, GP APAC legal counsel and partner at the law firm Shook Lin & Bok LLP. . Daniel Tan, another GP APAC advisor from the same firm, told Reuters: “The possibility of seeking a moratorium in support of the restructuring has always been an option in case any minority creditor gets out of line and how can See, what has happened to a couple of minority creditors. ” GP APAC owes more than $ 464 million to its top 20 unsecured creditors, according to an affidavit filed by Roderick Sutton, sole director of GP APAC. Sutton of FTI Consulting (NYSE 🙂 was appointed Head of Restructuring for GP Global in August. Among the unsecured creditors is Singapore-based marine fuel provider Equatorial Marine Fuel Management Services Pte Ltd, which has more than $ 700,000 in claims against GP APAC, according to the affidavit. After GP APAC defaulted on Equatorial’s demand for payment, Equatorial obtained a court ruling in January that allowed it to seize GP APAC’s Singapore office, according to the affidavit. That derailed GP’s plans to sell the office for S $ 8.5 million ($ 6.4 million). In doing so, “Equatorial sought to jump the queue” by claiming the property “which must be divided equally among all creditors,” Sutton told Reuters by phone. Equatorial declined to comment, citing ongoing discussions. Equatorial’s action also led Singapore’s DBS Bank Ltd to withdraw the credit lines for GP APAC and demand a repayment of more than S $ 2.4 million, according to the document. DBS declined to comment. DEBTS From GP APAC’s two largest unsecured creditors, Credit Suisse (SIX 🙂 (Switzerland) Ltd owes $ 91 million and UBS Switzerland AG $ 70.4 million, both of which supported the moratorium request, according to the court document. Credit Suisse and UBS declined to comment. In a report to lenders in September, Sutton said financial statements based on GP Global’s management accounts through July showed the company had total liabilities of more than $ 1.2 billion in bank loans and commercial accounts payable. as well as a provision of $ 1 billion for bad debts. Sutton said in the affidavit that “various irregular commodity exchanges and / or fictitious exchanges in which there was no actual transfer of any underlying cargo” led to the company’s financial problems. “This left the Group with significant bad debt, as trade accounts receivable due from these ‘operations’ are unlikely to be recoverable,” he said. He told Reuters that GP Global’s unsecured liabilities were expected to drop to about $ 800 million or less. When asked how much creditors could expect to recover, he said that if the restructuring continues, “we think it’s 20 to 30 cents on the dollar, and if there’s a liquidation, it’s zero.” ($ 1 = S $ 1.32)