NewOcean Energy Acquires Hong Kong Bunker Business "Seriously Affected" by OW Bunker Collapse

by Ship & Bunker News Team
Tuesday December 23, 2014

Hong Kong-listed NewOcean Energy Holdings Limited has signed an agreement to acquire the remaining half of an OW Bunker-affected bunker business in Hong Kong for HK$250 million ($32.2 million), the company announced

NewOcean's subsidiary, Maxx Investments, will buy the entire equity interest of King Vision-owned Success Pillar Limited, whose primary business was owning 51 percent interest in Hong Kong bunker player Ego Time Group

The other 49 percent is already owned by Maxx.

According to NewOcean, Ego's profit this year has been "seriously affected" by the collapse of marine fuel supplier OW Bunker, leading to losses of roughly HK$58.6 million ($7.6 million) caused from contracts made with or through OW Bunker China

NewOcean directors said that despite the losses, the amount would not affect the value of Success Pillar, and that it welcomed future legislation changes to the legal obligations between bunker suppliers and the ships being supplied.

"In the meantime, Ego Time Group will, like other major bunker suppliers, review payment policies and seek insurance products that can minimize the risk of non-performance or financial failure of an intermediary bunker supplier," said the company.

Ego was originally formed as a joint holding company by Success Pillar and Maxx in May 2012 to sell and distribute oil products in Hong Kong.

At the time, NewOcean had also owned roughly a third of Success Pillar, though it sold that stake in the latter half of the same year. 

OW Bunker China filed for court protection soon after the collapse of its parent company, with Cockett Marine Oil (Cockett) having since taken on more than 10 of the subsidiary's former employees.