SINGAPORE (Reuters) - Singapore’s Hin Leong Trading Pte Ltd, one of Asia’s top oil traders, has been placed under the management of a court-appointed supervisor as it seeks to restructure billions of dollars of debt, three sources with knowledge of the matter said on Monday.
Hin Leong had applied last week to be placed under interim judicial management and withdrew an application it had made to the Singapore High Court for legal protection for six months from creditors, two other sources said on Friday.
Hin Leong did not immediately respond to a Reuters request for comment.
Under so-called judicial management, a court appoints an independent manager to run the affairs of a financially distressed company in the place of existing management. Such moves are often seen favourably by creditors.
Executives from accounting firm PwC have been appointed as interim judicial managers of Hin Leong, the three sources said on Monday. They have up to eight weeks to file a preliminary report on Hin Leong, two of the sources said.
PwC did not immediately respond to a request for comment.
Hin Leong owes $3.8 billion (3.05 billion pounds) to 23 banks, according to a company presentation to lenders on April 14 contained in an affidavit in court filings. The affidavit was reviewed by Reuters but has not been made public.
In the affidavit, Hin Leong’s founder Lim Oon Kuin, also known as O.K. Lim, said he had directed the firm not to disclose $800 million in losses over several years. The financial difficulties have come to light following the collapse in oil prices and slump in demand as the coronavirus pandemic shut down economic activity.
Hin Leong had appointed PwC and law firm Rajah & Tann as advisers for negotiations with lenders to obtain short-term credit, but talks fell through, sources had said previously.
Singapore police said last week they had launched an investigation following news of Hin Leong’s losses.
Reporting by Anshuman Daga and Jessica Jaganathan; Editing by Nick Tattersall