The arrest of yet another Coastal Oil handysize tanker by Singapore’s DBS Bank on Wednesday suggests that it could be the High Court of Singapore, rather than shipbrokers, that will be selling the majority of the company’s tanker fleet.
DBS seized the 24,000-dwt product tanker Babylon (built 2017) shortly after it arrived in Singapore. The bank had filed a $12.6m mortgage claim against it.
The seizure came just days after DBS arrested the 24,200-dwt product tanker Atalanta (built 2015) for an outstanding mortgage of $5.36m, and the 5,500-dwt Coastal Neptune (built 2014) for an unpaid debt of $3.59m.
On the market
The ships are part of a fleet of six product tankers that Coastal Oil, via subsidiary shipping outfits Coastal Logistics and Heng Tong Fuels & Shipping, placed on the market at the end of last year.
Other product tankers in the fleet include the 5,500-dwt Coastal Jupiter (built 2013), 2,300-dwt Coastal Mercury and 2,200-dwt Coastal Saturn (both built 2012).
These vessels are also in Singaporean waters, but court records do not indicate that any applications for arrest have been filed against them.
The two arrested handysize tankers are registered under the ownership of Coastal Logistics and have until recently been deployed in the regional product trades. The smaller ships are owned by Heng Tong and operate in Singapore waters supplying bunkers.
Financial troubles
Repeated attempts by TradeWinds to contact Coastal Oil this week were unsuccessful, but Singaporean bunker industry observers said its financial troubles began last year with the sharp drop in oil prices.
Unable to service loans and pay creditors, the company filed for voluntary liquidation in December.
Coastal Oil’s main business activity was supplying bunker fuel to ships calling at Singapore as well as bunker suppliers operating in South East Asian waters.
The debt it owes to DBS on the three arrested ships is a fraction of the $354m it owes lenders, including Overseas Chinese Bank of Commerce, United Overseas Bank and Standard Chartered (Hong Kong).
Last Friday, Cosco Shipping International (CSI), the ship services arm of China’s giant Cosco group, notified the Hong Kong Stock Exchange that a number of banks had demanded repayment of alleged debts owed to Coastal Oil by Sinfeng Marine Services, its wholly-owned bunker supply subsidiary.
CSI dismissed the debt claims as fraudulent.
