MPA awards two new bunkering licenses to fill void left by Hin Leong

“While there is some immediate collateral impact through credit-tightening on other bunkering players, it is manageable,” says Khaw in a Facebook post on April 20. “Our priority is to ensure that our bunkering sector remains robust. And it is.”

He notes that other existing bunker suppliers have immediately come in to fill the gap.

“It is also fortuitous that the Maritime Port Authority invited bids for new bunker suppliers in December last year. We have evaluated the bids and two new suppliers will get their bunkering and craft operator licences today,” he adds. They are Minerva Bunkering and TFG Marine.

Khaw did not specify who the two new suppliers are. According to MPA, there are 45 bunker suppliers listed in 2019 – down from 51 in 2018.

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According to MPA, Ocean Bunkering Services, the Hin Leong subsidiary, was the largest bunkering supplier in 2018.

Last year, it dropped to number three, behind PetroChina International (S) Pte Ltd, and Sentek Marine & Trading Pte Ltd. These two suppliers were second and third respectively in 2018.

Total bunkering volume in Singapore has dropped since 2017. From 50.63 million tonnes that year, the demand dropped to 49.8 million tonnes the following year and dip even lower to 47.5 million tonnes for 2019.

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Hin Leong is in the news recently for incurring some US$800 million in undeclared losses. The company’s founder, Lim Oon Kuin, has resigned from all his posts in the company and subsidiaries with effect from April 17. His son, Evan Lim Chee Meng has taken over and is now leading the effort to restructure the company.

As at April 9 2020, Hin Leong has incurred total debt of US$4.05 billion, versus assets worth US$714 million.

The company is a major casualty of plummeting crude oil prices over the past few months.

In an April 17 affidavit, Evan explains that banks started tightening lines after several other competitors in the industry faced problems, thereby affecting Hin Leong’s cash flow.

The three local banks DBS, OCBC and UOB, are owed US$290 million, US$250 million, and US$140 million respectively. The largest creditor is HSBC, with US$600 million due.

Even says that the company is already in talks with a Chinese oil major and has also received indications of interest from at least two other prominent players in the industry.

In the affidavit, Evan noted that as at Oct 31 2019, the end of its most recent financial year end, Hin Leong reported positive equity of US$4,562,759,000 and earnings of US$78,168,000 as at the end of the last financial year ended 31 October 2019.

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“In truth, however, HLT has not been making profits in the last few years. HLT has suffered about US$800 million in futures losses over the years, but these were not reflected in the financial statements,” he adds.
“I am not personally aware of how and why these losses were not reflected, as I was not involved in the finance function which was supervised by my father."

“I understand from my father that he gave instructions to the finance department to prepare the accounts without showing the losses and told them he would be responsible if anything went wrong. I signed off on Hin Leong’s financial statements on the instructions of my father,” states Evan.

See also:

• Oil trader Hin Leong set to hand over management from founding family to PwC
• Singapore oil trader Hin Leong failed to declare losses of US$800 mil
• Potential reprieve for Hin Leong as Sinopec eyes oil terminal
• Hin Leong bankruptcy may cause local NPLs to rise
• DBS, OCBC, UOB likely to record impairments owing to Hin Leong Trading bankruptcy: Phillip Securities
• Banks freeze credit to Singapore oil trader after price crash
• Standard Chartered hit by bad loans including Hin Leong