OW Bunker Almost Bankrupt During 2008 Oil Price Collapse, "Should Never Have Been Listed" Says Former Risk Manager

Kenneth Rosenmeyer says he lost OW Bunker some $45 million when the price of oil collapsed after hitting its all time high in July 2008.

Former OW Bunker risk manger Kenneth Rosenmeyer says the oil price collapse of 2008 pushed the now defunct global bunker supplier and trader to the brink of bankruptcy six years before its ultimate demise, Danish business news outlet Dagbladet Børsen reports.

"The company should never have been on the stock exchange in the way it was," Rosenmeyer was quoted as saying, adding that if the company was listed then its "risk management" activities should have either stopped, or the true extent of the risk from oil price fluctuations should have been clear.

OW Bunker is understood to have made substantial profits through Rosenmeyer, with earlier reports indicating he was tasked with making $1.5 million profit per month through speculative activities.

The 2008 incident took place a year after Swedish private equity firm Altor Equity Partners (Altor) acquired OW Bunker when its €1.15 billion ($1.5 billion) Altor Fund II investment vehicle purchased the Wrist Group and its subsidiaries.

According to Børsen, Rosenmeyer says he lost OW Bunker some $45 million when the price of oil collapsed after hitting its all time high in July 2008.

The company was said to only be able to survive after it managed to raise $25 million from selling options on around 500,000 tonnes of oil.

"I could see 1,200 people in OW come in and make a profit, and then I could see myself, one man, lose 300 million kroner," he said.

Crazy Decisions

Rosenmeyer was not sacked over the incident, a decision he says "was crazy," as the company's management believed he could eventually make the money back.

He left OW Bunker in 2014 after 14 years, shortly after the company's $1 billion IPO in March 2014.

OW Bunker went bankrupt less than 8 months after the IPO following the collapse in oil prices last year, reporting at the time it had made a risk management related loss of around $150 million.

At the same time it said it had also discovered a $125 million fraud at its Singapore-based subsidiary Dynamic Oil Trading (DOT).

Rosenmeyer's revelations come in a new book by Børsen business reporter Jakob Skouboe, OW Bunker – insidernes fortælling og det dramatiske kollaps (OW Bunker - the insider's narrative and the dramatic collapse).

The book, due to be published on June 22, is said to be based on interviews with around 30 former employees.

Last week, Morten Schwartz Nielsen, president of the association OW Bunker Investor said that lawyers representing 3,500 former shareholders believe that deficiencies in OW Bunker's IPO prospectus were so numerous that a planned claim for damages will be won.