Singapore’s Ocean Tankers wants to ditch its chartered ships because it could run out of cash by early November, Reuters has reported.
Ernst & Young (EY), the judicial manager of the troubled tanker operator, is said to have submitted an application to the High Court of Singapore seeking permission to return most of the ships the company charters to their owners.
Citing an EY update sent to creditors and other stakeholders last week, the news agency said Ocean Tankers was spending $540,000 a day to maintain around 150 idle vessels, and that “by early November 2020, (Ocean Tankers) will not have sufficient cash to continue maintaining the vessels in the company’s fleet and the operations of the company’s lube plant, storage and terminal business”.
Most of the Ocean Tankers fleet has anchored in the South China Sea since the collapse of the oil trading and shipping empire of owner Lim Oon Kuin in March.
Ocean Tankers’ cash-generating oil lubricants business is said to be its most valuable asset, and a sales process is underway.
TradeWinds has approached Ocean Tankers’ judicial managers for comment on these latest developments.
Ships in the Ocean Tankers fleet are chartered from a collection of affiliated shipowning companies that collectively form an entity called the Xihe Group.
Ocean Tankers, Xihe and oil trader Hin Leong Trading are owned by Lim, his son and his daughter. All were placed under judicial management for restructuring after Hin Leong racked up nearly $4bn of debt.
The Lim family is reportedly no longer interested in restructuring Ocean Tankers and on 30 September proposed that the operator be liquidated.
The collapse of Hin Leong and its sister companies in effect removed the third-largest bunker supplier from the Singaporean market.
On Monday, the Maritime and Port Authority of Singapore confirmed it had suspended the trading licences of Hin Leong subsidiary Ocean Bunkering Services as it had stopped its bunkering operations in April this year and therefore had not been able to fulfil its licensing commitment.
Xihe’s judicial manager, Grant Thornton, has been selling off assets, with John Angelicoussis' Maran Tankers reported this week to have acquired three VLCCs — the 318,000-dwt Tai San (built 2009) and Tai Hung San (built 2010) and the 319,000-dwt Pu Tuo San (built 2011) — for $110m en bloc.
Lim, who, according to Forbes, was Singapore's 18th-richest man in 2019 with a net worth of $1.65bn, was charged with forgery in August and September and is on bail.
