COSCO Shipping said it would not be affected by liquidation.
On January 5, COSCO Shipping International (00517) issued a notice. The company learned from media reports that Coastal Oil (Singapore) Co., Ltd. had submitted a voluntary liquidation application to creditors on December 13, 2018 for liquidation. Coastal Oil Singapore is the main supplier of Xinfeng Marine Services Pte. Ltd. (Xinfeng Shipping Services Co., Ltd.) which is not a wholly-owned subsidiary of the company.COSCO Shipping
In addition, a number of third-party commercial banks have claimed to Xinfeng that Xinfeng Petroleum Singapore has transferred its due accounts receivable from Xinfeng Petroleum Singapore to the bank. According to the alleged offshore oil Singapore claims the transfer of debt to the bank, the bank has asked Xinfeng to repay the claimed debt. According to the preliminary assessment, Xinfeng’s management believes that the vast majority of documents involving claims of debt are untrue. As of January 4, 2019, Xinfeng Company is still investigating the incident and seeking professional advice on the aforementioned issues.COSCO Shipping
It is reported that Xinfeng is mainly engaged in the supply and trade of ship fuel and related products, covering major refueling ports such as Singapore and Malaysia. According to the audited consolidated financial statements for the year ended 31 December 2017 and the unaudited consolidated financial statements for the six months ended 30 June 2018, the operating income from Xinfeng Company accounted for about 66% and 69% of the group’s income in the same period, and the pre-income tax spillover from Xinfeng Company’s business accounted for about 1.3% and 1.2% of the group’s pre-income tax spillover in the same period, respectively.COSCO Shipping
Coastal Oil Singapore is mainly engaged in global oil product supply and harmonization. Coastal Oil Singapore is the main supplier of Xinfeng. In the year ending December 31, 2017 and the six months ending June 30, 2018, the procurement cost from Xinfeng to Singapore accounted for about 94% and 93% of the total procurement cost of Xinfeng during the same period, respectively.COSCO Shipping
The board expects that unless and until a Singapore supplier is identified to replace Coastal Oil, the group’s revenue will be substantially reduced. However, in view of the small profit contribution of Xinfeng, the board now expects that the liquidation of Coastal Oil Singapore will not have any significant adverse impact on the group.COSCO Shipping