The company's employees in Singapore and China will leave by the end of next month.
Singapore-based oil trader Zenrock Commodities Trading, currently under investigation for using the same oil cargo as collateral for multiple credit facilities, is planning to shut down its business, according to a «Bloomberg» report on Tuesday.
The company is also preparing to hand over responsibilities to judicial manager KPMG, the report said, citing people with knowledge of the matter.
Finews.asia previously reported that Zenrock was yielding a bid by HSBC – its largest creditor – bid to place the company under judicial management, a form of debt restructuring. A hearing has been set for July 13.
Large Exposure by Banks
Zenrock owes at least six banks a total of $166.1 million and has outstanding balances of $449 million, according to a bankruptcy protection application filed in May.
The creditor banks are said to be HSBC, Natixis, Crédit Agricole, ING Bank, Bank of China, and Banque de Commerce et de Placements, with HSBC having the largest exposure at $49 million.
Commodities Hub Hit
Singapore's oil trading sector has come under the spotlight since the commodity's plunge earlier this year as a result of the Covid-19 pandemic, with several trading firms having trouble repaying their debts.
Fellow Singapore trader Hin Leong admitted to undisclosed losses which has caused distress to nearly $4 billion of loans from some 23 banks – including $600 million from HSBC, the largest lender.
The Monetary Authority of Singapore said in the wake of the Hin Leong scandal that it was «closely monitoring liquidity and credit conditions in the market» and reminded banks «not to de-risk indiscriminately from the bunkering and oil trading sectors,» while banks in Singapore are cooperating to establish better commodity financing standards to avoid a repeat of the blunder.
