An arm of beleaguered GP Global has applied to the Singapore High Court for a six-month debt moratorium.
The move comes as the Dubai-headquartered fuel oil trader seeks to restructure more than $1bn in debt.
The court request aims at shielding Singapore arm GP Global APAC but will have little impact on creditor action against its parent.
Reuters reported that GP Global APAC owed more than $464m to its top 20 unsecured creditors, citing an affidavit filed by Roderick Sutton, its sole director.
Sutton, from FTI Consulting, was appointed GP Global's chief restructuring officer in August 2020.
GP Global APAC has reportedly been facing mounting claims from creditors and has missed loan payments in recent months. Banks have also withdrawn credit lines.
Among its unsecured creditors is Singapore-based marine fuel supplier Equatorial Marine Fuel Management Services, which has filed more than $700,000 in claims, according to the affidavit.
In the document, Sutton said that in January Equatorial Marine obtained a court ruling allowing it to seize GP Global APAC's Singapore office after it defaulted on Equatorial Marine's payment demand.
The office is located in Suntec City, a prestigious office and retail complex.
He said that this derailed GP Global APAC's plans to sell the office for SGD 8.5m ($6.4m).
Sutton told Reuters that that in doing so, "Equatorial sought to queue-jump" by laying claim on the property "which is meant to be divided equally to all creditors".
GP Global APAC's affidavit has claimed that that the Swiss banks that are two of the company’s largest unsecured creditors both supported the moratorium application. Credit Suisse is owed $91m and compatriot UBS is owed $70.4m, the record shows.
The company’s restructuring strategy includes stand-still agreements with creditors that let it sell assets without the threat of creditors independently taking action.
Singapore-based legal sources told TradeWinds that while the moratorium would protect GP Global APAC from creditor action, the protection would not extend to its Dubai-based parent company.
Parent company woes
Details about the financial struggles of parent company GP Global, formerly known as Gulf Petrochem Group, emerged in July 2020.
The company admitted it was undergoing restructuring but dismissed any suggestions of financial problems, claiming it was a “victim of blatant lies” being spread by “vested interests who do not wish to see us succeed“.
It later claimed it had uncovered fraud within the company and filed criminal complaints against some of its employees.
These alleged fraudulent activities, which included “various irregular commodity trades and/or fictitious trades where there was no actual transfer of any underlying cargo” were blamed for the company's financial woes.
In a September report to lenders, Sutton said financial statements based on GP Global's management accounts through July showed the company had total liabilities of more than $1.2bn in bank borrowings and trade payables as well as a $1bn provision for bad debts.
Several of its owned and chartered ships have since been subject to legal action from creditors.
GP Global APAC could not be reached for comment.
