Brightoil Petroleum has settled with Vietnam-owned trader Petrolimex over a debt of more than $30m that led to the bankruptcy of its founder Sit Kwong Lam.
In an exchange filing, the Hong Kong-listed bunker player and former tanker owner said all of its debt to Petrolimex had been settled via the agreement.
Sit had provided a personal guarantee of more than $30m for goods Brightoil bought from in April 2018.
When failing to recover the debt, Petrolimex had secured bankruptcy order from the High Court of Hong Kong against Sit.
The Vietnamese company was also trying to wind up a Brightoil subsidiary in Singapore.
Also, Brightoil said it settled debts with Toyota Tsusho, Broad Action, Luso International Banking, Petco Trading Labuan, Haitong Global Investment SPC III, Bank of China, among others.
“With satisfactory resolution of the debts relating to the majority of the creditors to which Dr Sit had provided personal guarantee, it is expected that this will help expedite the resolution of Dr Sit’s bankruptcy proceedings,” the company said.
Brightoil was often nicknamed the "fourth oil barrel" in Chinese press reports, in an allusion to its quasi-state-owned status alongside state oil majors Sinopec, PetroChina, and CNOOC.
Sit, who was once a member of the Chinese People's Political Consultative Conference, built up Brightoil from a bunker oil trader into a major player in Chinese oil distribution.
He resigned as Brightoil chairman and chief executive when declared bankrupt, only to return one month later as a strategic advisor.
Since 2018, Brightoil has faced financial difficulties and been forced to sell its fleet of 14 tankers.
But the company managed to secure a $362m refinancing package from state-linked China Huarong Overseas Investment in end-2019 to stay afloat.
In addition, Huarong agreed to provide another $30m in loan to Brightoil on Tuesday.
“This provided strong support for the company's debt restructuring and operations during the epidemic,” Brightoil said.
