Hin Leong Trading, an oil trading company, collapses

Hin Leong Trading is a huge trading company from Singapore dealing in trading and storage oil. Lim Chee Meng, the only son of its founder, Lima Oon Kuin, has just revealed that the company has withheld $ 800 million in losses and has also sold inventory to secure loans. In total, the cash on hand may well exceed USD 3 billion, and the case has just been brought to court. Just like an application for protection against creditors, including 20 banks.

Brokers offering trading in crude oil - CHECK THE SETUP

The collapse of Hin Leong Trading Ltd., one of the largest oil trading companies not only in Asia but also in the world, is already a fact. Until now, however, no one realized how much it would bring - not only to its owners, but also to its partners.

Coronavirus pandemic and oil price war, fueled by Saudi Arabia and Russia, caused the prices of raw material to fall to record low levels. This had to affect the condition of oil trading and storage companies, but hardly anyone expected the effects to be so great. The son of the owner of the company just informed them.

$ 800 million loss to Hin Leong Trading Ltd.

Lim Chee Meng, Lim Oon Kuin's only son, said the Singapore oil trader hid about $ 800 million in futures trading losses, suggesting a much larger hole in the company's finances than previously thought. The company also sold millions of barrels of refined products, which it used as collateral for loans at banks " - writes the news agency Bloomberg.

Thus, the situation became dramatic: the declared oil stocks ceased to correspond to the fatal stocks envisaged as collateral for working capital and investment loans. What's more - the stocks were sold at record low prices to keep the company liquid and not to share the fate of Noble Group and Agritrade, which went out of business with losses of millions. However, rolling the debt did not help much.

It also turned out that Hin Leong Trading's losses have been hidden over the past few years. They were also omitted in quarterly and annual financial statements.

Who will get the money back and what are the actual losses?

The case is in court and the allegations are very serious. Hin Leong and Ocean Tankers have already applied for judicial protection against creditors. Both companies belong to the Lim family, which is now trying to secure leftovers. The numbers are inexorable. Although Hin Leong valued equity at USD 31.10.2019 billion and net profit at USD 4,56 million in the last annual report of October 78, XNUMX, the facts are now quite different.

Creditors have just learned that total liabilities at the beginning of April amounted to USD 4,05 billion and assets to USD 714 million. So it's easy to count that over USD 3,3 billion is missing. The balance sheet from 9.04.2020/141/1,28 did not show any company capital. That's not all, because creditors have been informed that the stocks of petroleum products are currently worth USD 50 million. It is also nothing compared to the state of the last six months, when they were to amount to USD 461 billion. Cash stocks fell to USD 2019 million compared to USD XNUMX million in October XNUMX.

20 banks have withdrawn Hin Leong credit lines, totaling USD 4 billion. Everything seems to indicate that this is the end of the company founded in 1963, which has grown into one of the largest fuel suppliers in Asia and the world over the past 50 years. How much power is falling is shown only by one number: the company had a fleet of over 100 tankers.