Xihe Group has announced a split with oil trader Lim Oon Kuin, owner of the collapsed oil trader Hin Leong Trading, as it opens “consensual” talks with its main lenders in a corporate restructuring.
Xihe, which controls a fleet of 140 tankers, was the tanker owning affiliate of the Lim-controlled Hin Leong and its shipping company Ocean Tankers.
But in a statement, Xihe said it has parted ways with the Lim family. “Lim Oon Kuin and his children are no longer part of the management team,” the company said.
Hearing adjourned
The statement comes after an attempt by Hin Leong creditor OCBC Bank to have subsidiary Xihe Holdings put under judicial management was adjourned earlier today.
In place of the Lim family, Xihe said a new independent management board has been appointed which has more than 100 years' collective sea and shoreside shipping company management experience between them.
Chief executive Kenny Lim will head the new team, with Desmond Chong appointed commercial director and Zhang Yujie appointed as vice president of fleet management.
Kenny Lim is the younger brother of Lim Oon Kuin but Xihe group points out that he has never been a shareholder of Hin Leong and Ocean Tankers, or even on the side of the Lim family that controlled these two companies.
Hin Leong and Ocean Tankers were controlled by Lim Oon Kuin and his two children. Kenny Lim has been appointed on an interim basis while discussions with creditors continue.
Xihe Group said it has cancelled all its charter agreements with Hin Leong, and its main bareboat charterer Ocean Tankers, which has been put into judicial management.
Xihe Group said it has secured redelivery of some of its vessels from Ocean Tankers, including the 108,953-dwt Ocean Queen (built 2008), and is awaiting further redeliveries.
“There is a market chartering out these vessels and Xihe is actively seeking opportunities to redeploy them,” the company said.
Vessel sales
Xihe Group said it is also restructuring the fleet through vessel sales to optimise returns to its main stakeholders. It has also employed leading technical and commercial management firms to find employment opportunities for its fleet.
“Xihe has been updating its lenders regularly on its strategic plans and the direction it has charted. It is confident of getting its business back on track and with full commitment to bring about the best outcome for all its stakeholders, partners and clients,” the company said.
Xihe’s statement comes after OCBC, one of Singapore's largest banks, has sought to have Xihe Holdings placed under judicial management due to a “strong distrust” of Xihe’s management after allegedly fraudulent activities were uncovered at affiliated Hin Leong Trading.
OCBC is Hin Leong’s fourth largest secured creditor with debts running up to $250m.
However, the court proceedings were adjourned after Xihe agreed to work toward a consensual restructuring with its lenders.
