Brightoil Petroleum has suspended its VLCC and barge operations after all of the fuel trader’s vessels in the sectors were arrested by creditors.
In an exchange filing, the Hong Kong-listed company confirmed it was forced to temporarily suspend the operations of five VLCCs and six bunker barges after they were seized.
“Based on the management's preliminary assessment, so far the temporary suspension of the operations has affected on no more than two months' income of the respective vessels of the marine transportation sector,” Brightoil said.
“The Group is currently in negotiation with the related creditors and working on the solutions, so that operations of the vessels could be resumed as soon as possible and the impact on the marine transportation sector could be minimised.”
The company didn’t not provide further details on the arrests.
Based on VesselsValue data, Brightoil owns the 7,000-dwt Brightoil 688 (built 2008), Brightoil 639 (built 2013), Brightoil 666 (built 2013) as well as the 4,100-dwt Brightoil 319 (built 2014), Brightoil 326 (built 2015) and Brightoil 329 (built 2016).
It also owns the 318,000-dwt Brightoil Gravity (built 2012), Brightoil Glory (built 2012) and 319,700-dwt Brighoil Galaxy (built 2012), and the 319,800-dwt, 2013-built Brightoil Gem and Brighoil Grace.
TradeWinds reported the barges were seized by Singaporean law firm Rajah & Tann, acting on the behalf of an unknown creditor, and Brighoil Grace by mortgage bank Credit Suisse.
Faced with total debts of $1.9bn as of end-November, of which claims of $250m have been made by some creditors, Brighoil said it has been seeking to restructure its debts via external financial and other capital raising efforts.
“Presently, due diligence is being carried out in relation to the extent of existing financial obligations of the Group that will require reorganisation and the financing that will be required for the continuation of the Group's business post-reorganisation,” Brightoil said.
“At the same time, sub-committees were established to work on restructuring options for domestic and foreign debts respectively.”
Brightoil has applied for further court injunction against legal proceedings directed at its Singaporean subsidiary, which it believes “would provide the company with the necessary protection against any effort to frustrate the potential debt reorganisation”.
The company has expected to have made net loss of HKD 452m ($57.6m) in the second half of 2018 due to weak bunker trading volume and low freight rates.
It has yet to issue its 2017 and 2018 annual reports as the auditing is not completed. Trading of its shares has been suspended since 3 October 2017.
