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ZenRock, Agritrade face winding up; Hontop put under JM

ZenRock, Agritrade face winding up; Hontop put under JM

Source: Business Times
Article Date: 15 Sep 2020
Author: Tay Peck Gek

ZenRock owes HSBC about US$49 million, while its total debt to banks is understood to stand at around US$165 million.

ZenRock Commodities Trading and Agritrade International could be wound up, as their respective judicial managers have filed applications to have them liquidated.

Separately, Hontop Energy (Singapore) has been placed under judicial management.

Judicial managers for oil trader ZenRock made the winding-up application on Aug 25, a month after the debt-laden firm was placed under judicial management - a form of debt restructuring that involves an independent party managing the company's affairs.

ZenRock's judicial managers from KPMG had said in July that there was value in placing the firm under judicial management, albeit for a relatively short period of time, during which they could also complete an inventory sale and review contract feasibility. They may also consider a proposed management buyout of a new unit ZenRock Europe set up by Mark Papallo, who owns 15 per cent of the Geneva-based entity.

However, the judicial managers had also made known their plan to file for ZenRock to be liquidated if and when it becomes evident that it will be unable to meet the purposes set out under the judicial management order.

ZenRock owes HSBC about US$49 million, while its total debt to banks is understood to stand at around US$165 million. It is also being investigated by Singapore's white-collar crime buster, the Commercial Affairs Department.

The police told The Business Times that it is "inappropriate to comment on ongoing police investigations" when asked on Monday for the status of the probe as well as if anyone would be prosecuted.

The judicial managers, in an interim report submitted to the court, had flagged doubtful trades, invoices and cash transactions over the past two years.

Commodity trader Agritrade, incorporated in 1979, is facing the same fate after its judicial managers from Ernst & Young applied in early September to wind it up. Agritrade is said to owe some US$1.55 billion.

The court will hear the application for Agritrade on Sept 21, and that for ZenRock a week later on Sept 28.

Meanwhile, Hontop Energy, an oil trader linked to a Chinese refiner, was placed under judicial management on Sept 7. It is now being taken care of by RSM Corporate Advisory.

The collapse in oil prices earlier in the year has blindsided the oil and commodities trading industry, and exposed the financial weakness and alleged irregularities of several traders in Singapore, including Hin Leong Trading.

Besides a flurry of judicial management applications, creditors of these embattled traders have also launched lawsuits.

Source: Business Times © Singapore Press Holdings Ltd. Permission required for reproduction.

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