China Cosco Shipping has denied alleged debt claims from several banks relating to its marine fuel trading subsidiary Sinfeng Marine Services.
According to Cosco, Sinfeng’s major supplier Coastal Oil Singapore filed for liquidation in December and a number of third party commercial banks claimed that Coastal Oil has transferred receivables due from Sinfeng to the banks, thus the banks have demanded repayment of the debt from Sinfeng.
The management of Sinfeng is of the view that the documents in relation to almost all of the alleged debts are not genuine based on a preliminary assessment.
Currently Sinfeng is still in the process of conducting an investigation and seeking professional advice for the issue.
Cosco expects that revenue of the group will decrease significantly unless and until alternative suppliers to Coastal Oil are identified.
Coastal Oil has around $354m of outstanding loans in total with 10 creditor banks. Last week, DBS Bank seized two tankers of Coastal Oil in Singapore after receiving approval from a local sheriff.