February 27, 2020 / 4:05 PM / a month ago

Chinese oil trader Hontop Energy goes into receivership in Singapore - regulator

SINGAPORE (Reuters) - Hontop Energy (Singapore) Pte Ltd, the trading arm of a Shandong-based refiner, has gone into receivership, according to its business profile on the website of Singapore’s accounting and corporate regulator.

Singapore bank DBS, one of Hontop’s creditors, has appointed accounting firm KPMG as the receiver, a KPMG official told Reuters.

DBS declined to comment.

“Hontop continues to be run by the existing management. The receiver has been appointed over specific charged assets which mainly relate to one trade transaction financed by DBS. Their involvement is limited to realising DBS’ security and to discharge DBS’ debts,” Kelvin Koh, a partner at law firm TSMP Law Corporation, acting on behalf of Hontop, said.

“China Wanda Group maintains a positive outlook on the future growth of its oil refinery business in China,” he added.

Hontop, a unit of China Wanda Group, buys crude oil for the group’s 100,000 barrels per day refinery in Dongying, Shandong province, operated by Tianhong Chemicals Co Ltd.

China Wanda Group, which also owns petrochemical, electric cables and property businesses, has no relation with the conglomerate Dalian Wanda Group.

Hontop last issued a tender in October, said a Singapore-based trader who regularly participates in its tenders. Hontop typically buys Russian, Angolan and Brazilian crude.

Purchases are now being made directly by Wanda, which bought a 300,000-barrel cargo for delivery in the first half of March as it looks to restart a refinery that has been shut since mid-January.

Chinese independent refiners, or teapots, account for about 20% of China’s oil imports, but they have recently come under pressure with ample fuel supplies at home and bleak demand due to the coronavirus outbreak weighing on margins.

Reuters reported earlier this week that banks have suspended credit lines for some of these teapots amid rising concerns about overall industrial defaults.

Reporting by Jessica Jaganathan and Chen Aizhu; additional reporting by Shu Zhang, Roslan Khasawneh and Jane Merriman; writing by Florence Tan; editing by Himani Sarkar, David Evans and Richard Pullin

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