July 22, 2020 / 2:54 PM / 13 days ago

OCBC seeks court-led supervision of Lim family's shipping unit Xihe Holdings - sources

* Seeks judicial management for Xihe and subsidiaries

* Debt moratorium would help preserve ships’ values

By Anshuman Daga and Jessica Jaganathan

SINGAPORE, July 22 (Reuters) - Singapore bank OCBC is seeking a court-appointed supervisor to manage shipping firm Xihe Holdings Pte Ltd and four of its subsidiaries, four sources with knowledge of the court filing said.

Xihe Holdings is part of the troubled Lim family business empire, which also includes oil trader Hin Leong Trading and fleet manager Ocean Tankers (Pte) Ltd, both of which were placed under court-appointed supervisors earlier this year.

Hin Leong is seeking to restructure billions of dollars of debt after the oil price crash revealed a massive, yearslong fraud at the once fabled trading house. OCBC is owed $250 million, making it Hin Leong’s fourth biggest secured creditor, according to a presentation by Hin Leong to lenders in April.

Xihe Holdings, owned by Hin Leong founder Lim Oon Kuin, his son Evan Lim Chee Meng and daughter Lim Huey Ching, controls a shipping fleet that ranges from coastal barges to very large crude carriers (VLCCs).

OCBC wants a court-appointed manager to run Xihe to maximise its chances of recouping some of the money it is owed. The bank wants to avoid the risk of other creditors trying to sell assets belonging to Xihe and its subsidiaries in a fire-sale, one of the sources said.

It also wants to preserve the company’s assets. OCBC discovered that $208 million had been transferred from two of the Xihe companies to Hin Leong via Ocean Tankers “for no valid commercial purpose”, and some charters of OCBC-financed vessels were terminated without the bank’s consent, the source said.

Hin Leong’s judicial managers PricewaterhouseCoopers and Ocean Tankers’ judicial managers EY were not immediately available to comment.

The bank has applied for Xihe Holdings and its subsidiaries, Da Xin Tankers (Pte) Ltd, Hua Guang Shipping Pte Ltd, Nan King Maritime (Pte) Ltd and Hua Xin Shipping Pte Ltd, to be placed under the supervision of Grant Thornton Singapore, the source added.

OCBC declined to comment, while Grant Thornton Singapore and Xihe Holdings did not immediately respond to a request for comment.

Evan Lim, and the Lim family’s legal and financial advisors did not immediately respond to emailed requests for comment.

Hin Leong’s judicial managers PricewaterhouseCoopers discovered that the oil trader had overstated its assets by more than $3 billion through widespread forgery and have recommended it merge with other companies owned by the Lim family, including Ocean Tankers and Xihe Group. (Reporting by Anshuman Daga and Jessica Jaganathan; Writing by Florence Tan; Editing by Richard Pullin and Carmel Crimmins)

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