SINGAPORE, April 15 (Reuters) – Singapore oil dealer Hin Leong held a name with collectors on Tuesday after banks failed to supply a letter of credit score to the buying and selling agency to buy not less than one cargo of oil merchandise because of load this month, 4 sources mentioned. The worldwide coronavirus pandemic has led to an unprecedented droop in gasoline demand and hammered oil costs, making it tough for buying and selling companies to make a revenue. Hin Leong is likely one of the largest gasoline merchants in Asia and an operator of a serious tanker fleet. A number of banks which supply credit score services to Hin Leong held a name with the corporate and its advisors on Tuesday, three sources with information of the matter mentioned. The assembly was to debate methods to supply short-term commerce finance for the agency to proceed buying and selling operations, the sources mentioned. “Issues are heading in a optimistic route however it would take a while,” mentioned one of many three folks with information of the decision. Hin Leong didn’t reply emails and phone calls from Reuters in search of remark. The corporate has appointed accounting agency PwC and legislation agency Rajah & Tann as its advisers for its negotiations with banks, two sources mentioned. Rajah & Tann declined remark and PwC had no speedy remark. Letters of credit score are the device used to ensure fee to a counterparty for the acquisition of a cargo. With out them, corporations battle to commerce. The agency was unable to supply a letter of credit score from a financial institution for an oil product cargo it contracted to purchase in April, mentioned one Singapore-based supply with direct information of the matter. “Everyone seems to be apprehensive [about payment] they usually don’t dare to let Hin Leong to elevate the cargoes,” he mentioned. A supply at a Singapore-based buying and selling agency mentioned on Tuesday his agency had mutually agreed with Hin Leong to cancel a transaction for one more oil product cargo loading in April because of issues over the corporate’s credit score. Hin Leong, began in 1963 by Singapore billionaire Oon Kuin Lim, higher often called O. Ok. Lim, is a serious dealer of oil merchandise, and owns a fleet of greater than 100 vessels by its Ocean Tankers arm. It additionally partly owns Singapore’s Common Terminal and owns Ocean Bunkering Providers Pte Ltd, one of many island state’s largest marine gasoline suppliers. A supply at one other Singapore-based buying and selling agency mentioned his firm was approached by a financial institution over the weekend to purchase a cargo that the financial institution was promoting on behalf of Hin Leong. He declined to provide additional particulars. Separate sources at two Singapore-based companies that take care of Hin Leong and are ready on letters of credit score for cargoes of oil merchandise they’re contracted to promote to the corporate however have but to ship mentioned they had been ready for an replace on Hin Leong’s monetary standing. “We’re apprehensive however there are nonetheless some days to go earlier than the loading schedule,” one of many sources mentioned. “Given the prior document of Previous Lim, we might wait till at some point earlier than loading.” Hin Leong has contracted to purchase over 2 million barrels of gasoline from a spread of main oil corporations to load in April, commerce knowledge confirmed, together with about 1 million barrels of jet gasoline, 2 million barrels of gasoil and 300,000 tonnes of gasoline oil. Reporting by Roslan Khasawneh, Florence Tan, Chen Aizhu, Seng
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