The court hearing into OCBC Bank’s application to have Ocean Tankers affiliate Xihe Holdings placed under judicial management has been adjourned until 13 August.
Xihe Holdings is part of the troubled Lim family business empire that also includes oil trader Hin Leong Trading, which was placed under court-appointed supervisors earlier this year, along with affiliate Ocean Tankers.
“The Xihe Group of companies is pleased to announce that it and its lenders have adjourned court proceedings to work together towards a consensual restructuring,” the tanker owner said in a statement.
Xihe, which controls almost 140 tankers, said it was “deeply grateful” to the lenders and to the court for this opportunity and it was “committed to bring about the best outcome” for all its stakeholders, partners and clients.
Last week, OCBC applied to the High Court of Singapore for Seshadri Rajagopalan and Paresh Jotangia of Grant Thornton Singapore to be appointed as interim judicial managers.
The application covered Xihe as well as four subsidiaries — Da Xin Tankers, Hua Guang Shipping, Nan King Maritime and Hua Xin Shipping.
OCBC, one of Singapore's largest banks, has sought to have the company placed under judicial management due to a “strong distrust” of Xihe’s management after allegedly fraudulent activities were uncovered at affiliated Hin Leong Trading.
The bank said the appointment of independent judicial managers and interim judicial managers would "help greatly in restoring confidence of potential investors".
OCBC stated that because of interlinked businesses, common ownership and leadership of the Xihe Group, Hin Leong and Ocean Tankers, “interim judicial managers need to be appointed urgently over the debtor companies to investigate the serious irregularities and prevent further prejudice to creditors”.
“The Xihe subsidiaries have persistently failed to seek and collect payments from Ocean Tankers for months or years, to the prejudice of creditors of the Xihe Group and in breach of contractual obligations owed to OCBC,” the lender added.
Hin Leong is seeking to restructure billions of dollars of debt after the oil price crash revealed a massive, multi-year long fraud at the once fabled oil trader.
OCBC is owed $250m, making it Hin Leong’s fourth largest secured creditor, according to a presentation by the oil trader to lenders in April.
