Creditors of debt-laden oil trader Hin Leong Trading could throw a spanner in the works of attempts to sell a large number of tankers that are operated by affiliated Ocean Tankers.
Legal sources told TradeWinds that many of these out-of-pocket parties are seeking to get their hands on vessels linked to company founder Lim Oon Kim, also known as OK Lim.
Maritime lawyers said banks, suppliers and trade creditors want to get a hold of these assets belonging to Lim’s related companies to recoup at least some of the outstanding payments.
“There is a lot of interest on the vessels,” one lawyer said. “Claims exist, and numerous writs were served. But no arrest has taken place since the ships are staying out of Singapore waters.”
The bulk of the 79 tankers — larger than 10,000 dwt operated by Ocean Tankers but owned by the Lim family’s privately held company, Xihe Group — have been idling offshore, mostly in the South China Sea, since troubles at Hin Leong and Ocean Tankers first emerged in April.
Ocean Tankers bareboat chartered Xihe’s tankers, which were mostly used to transport Hin Leong cargoes.
Hin Leong and Ocean Tankers subsequently filed for court protection, and later judicial management, but, as far as TradeWinds has been able to ascertain, Xihe has not followed suit.
The writs filed against the ships in the High Court of Singapore are said to number in the double digits.
Xihe's tankers are estimated to be worth $1.17bn and have been listed as sales candidates on the secondhand market since early June. This includes eight VLCCs, 12 LR2 product tankers, five LR1 product tankers, two chemical tankers and 16 newbuildings under construction at shipyards in China.
A source close to Lim stressed that the fleet sell-off is a move to rightsize the fleet in an orderly fashion to meet expected future market demand.
“It is not a distress or fire sale," the source said. "He is aware of the writs issued.”
Maritime lawyers believe that Xihe’s attempts to sell its tankers will be far from easy, where writs have been issued against them.
Prudent buyers conducting due diligence would likely refrain from acquiring vessels if the potential exists of being caught in a long legal battle involving multiple claims.
Some of the tankers are also believed to be laden with oil, which lawyers say would make it even harder to sell the ship as creditors could potentially arrest the cargo.
There are already indications that Hin Leong’s creditors are also going after the cargoes remaining on the tankers.
Singaporean media recently reported that HSBC, Societe Generale, ICICI Bank, Natixis and Credit Agricole have filed claims on cargoes loaded on two VLCCs — the 318,000-dwt Wu Yi San (built 2012) and E Mei San (built 2010).
Both vessels are anchored off Malaysia.
Unipec Singapore was reported to be looking to take delivery of cargoes of diesel fuel currently on board a VLCC off the UK and two LR2 product tankers off France.
