(May 6): HSBC Holdings PLC took steps to oust the management at a Singapore oil trader as Europe’s biggest bank seeks to limit potential credit losses from the sector following the collapse of Hin Leong Trading (Pte) Ltd.
The lender filed an application at Singapore’s High Court on May 4 to put ZenRock Commodities Trading Pte Ltd. under so-called judicial management, a form of debt restructuring in which a third party runs the company, according to people with knowledge of the situation. HSBC proposed that KPMG lead the process, according to the people familiar.
HSBC and other banks are stepping up efforts to avoid further losses after the failure of Hin Leong, the storied Singapore oil trader that owes 23 banks almost US$4 billion (S$5.66 billion). HSBC has the most exposure to Hin Leong, at US$600 million, as part of its global oil-trading portfolio of US$2 billion. Its ZenRock credit is less than US$55 million, according to the people.