By Jessica Jaganathan
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.
HSBC has alleged that ZenRock engaged in a series of "highly dishonest transactions" that included using the same oil cargo to obtain loans from at least two different lenders, according to a separate affidavit seen by Reuters.
Singapore police raided ZenRock's office on Friday after HSBC filed a report, a source with knowledge of the matter said.
A police spokeswoman said in an email on Friday that it was "inappropriate" to comment.
Besides HSBC, ZenRock has five other secured creditors including Natixis, ING Bank, Credit Agricole and Bank of China, according to the court filing by ZenRock.
Swiss bank Banque de Commerce et de Placements (BCP) is the sixth creditor, the document showed.
Natixis and BCP declined to comment while there was no immediate response to Reuters requests for comment from the other banks.
The document also included a list of ZenRock's top 10 unsecured creditors as of Feb. 29, 2020, for a total amount close to $449 million.
These creditors are: French oil major Total's Totsa Total Oil Trading SA, Malaysian state energy firm Petronas' [PETR.UL] Petco Trading Labuan Co Ltd, Thai energy major PTT trading companies in Singapore and London, Angola's Sonangol Finance Ltd, oil majors BP's BP Singapore Pte Ltd and Royal Dutch Shell's Shell International Eastern Trading Company.
PetroChina International Singapore Pte Ltd, a unit of PetroChina, South Korea's Daelim Corp, Singapore, and China Aviation Oil (Singapore) Corp are also on the list of unsecured creditors.
"These trade creditors are unsecured but the obligations are mostly matched against incoming receivables," ZenRock said in the court filing.
BP, Shell and Total declined to comment. The other companies did not immediately respond to Reuters requests for comment, but four sources with direct knowledge of the matter said Sonangol, China Aviation Oil and PTT International no longer had any outstanding amounts with ZenRock.
(Reporting by Jessica Jaganathan; Additional reporting by Anshuman Daga, Roslan Khasawneh, Koustav Samanta, Florence Tan, Seng Li Peng, Shu Zhang, Chen Aizhu and Chayut Setboonsarng; Writing by Florence Tan; Editing by Nick Macfie and Nick Tattersall)