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HSBC Targets Singapore Oil Trader as Loan Concerns Escalate | Entrepreneur News

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HSBC Holdings PLC took steps to oust the management at a Singapore oil trader as Europe’s biggest bank seeks to limit potential credit losses from the sector following the collapse of Hin Leong Trading (Pte) Ltd.

The lender filed an application at Singapore’s High Court on May 4 to put ZenRock Commodities Trading Pte Ltd. under so-called judicial management, a form of debt restructuring in which a third party runs the company, according to people with knowledge of the situation. HSBC proposed that KPMG lead the process, according to the people familiar.

HSBC and other banks are stepping up efforts to avoid further losses after the failure of Hin Leong, the storied Singapore oil trader that owes 23 banks almost $4 billion. HSBC has the most exposure to Hin Leong, at $600 million, as part of its global oil-trading portfolio of $2 billion. Its ZenRock credit is less than $55 million, according to the people.

HSBC declined to comment. ZenRock didn’t respond to multiple attempts to seek comments via calls and messages. A pre-trial conference is scheduled for June 11, said the people, who asked not to be identified as the matter is private.

In response to market speculation over its financial status, ZenRock released a statement last month saying it’s not under statutory restructuring or insolvency protection. The Singapore-based company is operational and is working with other creditor banks to negotiate a consensual restructuring, according to one of the people.

ZenRock has trade financing facilities with other lenders aside from HSBC, including Natixis SA, and Oversea-Chinese Banking Corp., according to the company’s profile at the Accounting and Corporate Regulatory Authority. Representatives for these banks declined to comment. ZenRock has repaid debts owed to ABN Amro Bank NV as of April 23, according to filings to Singapore’s accounting regulator.

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HSBC Targets Singapore Oil Trader as Loan Concerns Escalate | Entrepreneur...

HSBC Holdings PLC took steps to oust the management at a Singapore oil trader as Europe’s biggest bank seeks to limit potential credit losses from the...

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