Singapore Oil Trader ZenRock Owes More Than $600 Million

OILMONSTER.COM- Singapore-based ZenRock Commodities Trading Pte Ltd, hit by tumbling oil prices and the coronavirus pandemic, owes more than $600 million to creditors, the company said in a court filing seen by Reuters on Monday.

In the application for “moratorium relief”, a form of bankruptcy protection, filed last Wednesday, the company said it owed at least six banks a total of $166.1 million and had outstanding balances of about $449 million in total with at least 10 unsecured creditors.

ZenRock did not immediately respond to a request for comment.

In its application, ZenRock said it ran into financial difficulties as the oil price collapse and coronavirus disrupted trading just after it had expanded its sales and back office operations last year.

“ZenRock is now in financial difficulties for the following broad reasons,” it said in the application, listing “severe disruption” to trade caused by the coronavirus, a “steep and sustained decline in crude oil prices” and a tightening credit market “exacerbated” by banks’ increased caution.

“Partly in consequence of the above, ZenRock is facing difficulties in collecting accounts receivable of approximately $120.5 million,” it said in the application.

ZenRock’s application came after HSBC Holdings PLC sought to place the oil trading company under judicial management, where a court appoints an independent manager to run the affairs of a financially distressed company, four people familiar with the matter said on Wednesday.

On Friday, Singapore’s High Court appointed such an interim manager after a virtual hearing, two sources with knowledge of the matter said.

Reuters was unable to review the documents related to the appointment.

ZenRock’s “moratorium relief” was also lifted during the hearing, one of the sources said. Such relief automatically takes effect with an application and lasts for 30 days or until a court hearing, whichever is earlier.

Late last month, ZenRock issued a statement to reassure clients that it was not under financial duress after global oil and fuel prices slumped.

Courtesy: www.reuters.com