The credit line worth up to USD 130 million that was given by Singapore arm of Danish marine fuel distributor OW Bunker, Dynamic Oil Trading, to Tankoil Marine Services, was not authorized by the parent company’s board.
According to the company’s Chairman Niels Henrik Jensen, cited by Reuters, “the credit granted to Tankoil was never submitted to the board, let alone authorised by it.”
In addition, the board of directors was also “extremely surprised to learn of the USD 150 million trading loss” writes Reuters, citing Jensen.
OW Bunker filed for bankruptcy protection on November 7 having reported a loss of at least USD 275 million resulting from a fraud by senior employees at Singapore subsidiary and mark-to-market losses.
The bankruptcy has had a ripple effect on Singapore units, along with those in the US.
Singapore-based Dynamic Oil Trading and OW Bunker Far East Pte. Ltd. filed for liquidation and are facing court claims by creditors worth USD 37 million.
U.S. units of OW Bunker filed Chapter 11 petitions Nov. 13 and are now seeking court permission to sell more than 150,000 barrels of stranded California oil, Bloomberg writes.
OW Bunker North America Inc. was quoted by Bloomberg as saying in its filing to U.S. Bankruptcy Court in Bridgeport, that the California oil must be sold quickly, at USD 350-to-500 per metric ton, in order to avoid fluctuating oil prices and required storage costs of more than USD 300,000 a month.
On the other hand, bunker trading company Integr8 Fuels has hired a number of former traders from OW Bunker, the company confirmed on its website.
These include four staff members, two for its Singapore office and a further two for its Dubai arm.
The bankruptcy case has not disrupted bunker supply and bunkering operations in Singapore, the Singapore Shipping Association (SSA) said having consulted with close to 50 companies.
In addition, bunker fuel demand in Mumbai and Hong Kong has remained steady, despite some predictions that it would rise as vessels sought ports with fewer credit issues, according to Platts.
World Maritime News Staff