Singapore's struggling oil giant, Hin Leong, is expected to get the cash it needs most, and Sinopec may be interested in acquiring its stake in Universal Terminal, a crude oil storage terminal.
Universal Terminal is jointly owned by PetroChina and Hin Leong. Among them, PetroChina holds a 25% stake, Hin Leong holds 41%, and the remaining 34% is held by Macquarie Fund. The source said that Sinopec had contacted Hin Leong earlier this month.
PetroChina invested in Universal Terminal in 2006, initially accounting for 35%, and Hin Leong owns the remaining 65%. PetroChina allegedly recovered its initial S $ 750 million investment in only 36 months.
In 2016, PetroChina and Hin Leong sold 34% of Universal Terminal to Macquarie Fund, with a total transaction value of US $ 550 million. After the sale, the share of PetroChina fell to 25%, and Hin Leong dropped to 41%. According to transaction estimates at the time, the total value of Universal Terminal exceeded US $ 1.5 billion.
Universal Terminal is the most attractive asset of Hin Leong. It is the largest independent gasoline storage terminal in Singapore.
Hin Leong was founded in 1963 by Lin Enqiang, a well-known Chinese businessman in Singapore. It is one of the largest marine fuel suppliers in Asia.
Recently, Hin Leong has applied to Supreme Court of Singapore to freeze debts due to the debt owed by US $ 3.85 billion from 23 banks. Ocean Tankers also applied for court protection.
In the last financial year ending October 31, 2019, Hin Leong's net assets were $4.56 billion and its net profit was $78.2 million. But earlier this month, Hin Leong told its creditors that its total liabilities stood at $4.05 billion and its assets were only $714 million.
Source: Sarah Yu, XINDE MARINE NEWS
The opinions expressed herein are the author's and not necessarily those of The Xinde Marine News.
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