Titan in Winding Up Order Action

Warburg Pincus filed a petition in the Supreme Court of Bermuda.

Saturn Petrochemical Holdings Ltd. (Saturn), a special purpose entity of U.S. private equity firm Warburg Pincus, LLC, (Warburg Pincus) filed a petition in the Supreme Court of Bermuda on July 5, 2012 to wind up the business of Titan Petrochemicals Group Ltd. (Titan) [HKG:1192] "as it is insolvent and should be liquidated," according to a report by Bloomberg.

The report said that since 2007 private equity investors Warburg Pincus has invested more than $215 million in the downstream oil services company, which provides end to end oil sourcing, transportation, storage and wholesale distribution.

Titan reported in March that it had been hit with non-payment of approximately $153.73 million owed by Grand China Logistics rendering Titan unable to meet its debt repayment obligations of $105.87 million in principal on senior notes due in March and $39.8 million payable in preferred shares redeemable after June 22.

Titan had to delay issuing its 2011 annual audited results needing more time to negotiate further with Grand China Logistics for completion of the sale of the Titan Quanzou Shipyard, proceeds of which were earmarked to reduce debt, fund development, and working capital. 

Titan defaulted on principal of HK $825.8 million, and interest of HK $35.1 million U.S. dollar bonds on March 19.

According to Saturn's petition, Titan has not been profitable since 2007, liabilities exceed its assets by $1.24 billion, nor is Titan likely to be able to redeem Warburg's 555 million preferred shares, for which Warburg sought redemption of HK$384 million (US $49.5 million) on July 4.

Titan had said in March that it is "actively working to require Grand China Logistics to honour its obligations" while continuing to seek new equity and or debt funding to resolve the group's current situation and financial obligations.

On July 3, 2012 Ship & Bunker reported company founder Mr. Tsoi Tin Chun resigned as chairman of the board of the Hong Kong headquartered firm.

According to Bloomberg Serene Goh, a spokeswoman for Titan, said that it has not been informed of any legal action requesting its liquidation on the basis on insolvency and had declined to comment any further.