Brightoil Negotiates Withdrawal of Hong Kong Winding Up Petition

Cash crunch. File Image / Pixabay

Brightoil Petroleum (Holdings) Limited today revealed it is facing creditor claims of around $250 million that it needs new funding to settle in full, but is making good progress on tacking winding up petitions made against its Singapore and Hong Kong entities.

It is the first official comment since news surfaced earlier this week about the petition made against its Hong Kong-listed entity by Broad Action Limited, but Brightoil says through "friendly consultation, pursuant to a settlement" the pair have now filed for its withdrawal.

Broad Action's petition was related to an alleged unpaid $42 million due this year on notes issued in 2015, Brightoil added.

In Singapore, where two creditors have filed winding up petitions against its Brightoil Petroleum (S'Pore) Pte. Ltd. (BOPS) entity, Brightoil says it filed to restrain legal action or proceedings against BOPS and that moratorium has now been extended until March 31, 2019.

Brightoil says it expects a further hearing will be held before the end of March.

"The Group is also negotiating with other creditors which have issued statutory demands against the Company and/or commenced legal actions against Brightoil Shipping Singapore Pte. Ltd., another indirect wholly-owned subsidiary of the Company, with the view to exploring settlement options and seeking creditors' support to reorganize the Group's debts," Brightoil said.

The company says it has made various efforts to increase liquidity, including discussions with potential purchasers or investors about its Zhoushan oil storage and terminal facilities.

As for the total owing of approximately USD $250 million (based on preliminary assessments), Brightoil says it has sufficient cash flow to maintain its normal operations, but needs new funding to satisfy all the creditor claims.