Hin Leong bankruptcy may cause local NPLs to rise

SINGAPORE (Apr 24): Hin Leong Trading, an unlisted oil trading company that last reported a turnover of US$20 billion ($28.5 bil-lion), has had its credit lines from the banks frozen. According to an affidavit dated April 17 by Lim Chee Meng, whose father, Lim Oon Kuin, or better known as OK Lim, founded and built up Hin Leong, the local banks exposure looks manageable.

As at April 9, Hin Leong had total liabilities of US$4.05 billion — of which US$3.85 billion was bank debt — versus assets of just US$714 million, implying the creditor banks would only get back 18 cents to the dollar in the most optimistic outcome. This was a far cry from its audited accounts which reported assets of US$4.56 billion.

The US$3.85 billion bank debt is owed to 23 banks. The largest local exposure is DBS Group Holdings, at US$290 million, followed by Oversea-Chinese Banking Corp with US$240 million, and United Overseas Bank with US$140 million.

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