The Danish bunkering group said it had not been able to find a solution with its syndicate banks following the events announced late Wednesday. When it revealed the fraud and risk management loss on Wednesday OW Bunker said these events had affected its operations and credit facilities.
“It has been decided to file for commencement of in-court restructuring procedure in the subsidiaries OW Bunker & Trading A/S and OW Supply & Trading A/S at the probate court in Aalborg. The main operational activities of the group are located in these companies, which are expected to be insolvent,” the company said in statement.
It said the purpose of the in-court restructuring was designed to see whether there was a basis for continued operations of the companies, including injecting further capital.
However, OW Bunker warned: “For the time being, the financial impact cannot be assessed, however, it must be assumed that the group's equity is lost.
“In court restructuring procedure is aimed at debtors who are insolvent but where there is a chance that all or part of the debtor's business may be able to continue operations after the completion of a restructuring,” it added.
The news will send shockwaves around the global bunkering market of which OW Bunker claims 7% share on its website.
OW Bunker chairman Niels Henrik Jensen told Reuters that it had received support from Danske Bank and Nordea, but not from 11 international banks. "The company is at risk of going bankrupt. We have decided to file for the commencement of a court restructuring process," he was quoted as saying.
On Wednesday OW Bunker revealed it had uncovered a $125m fraud in its Singapore subsidiary Dynamic Oil Trading allegedly carried out by senior members of staff.
It also announced that a review of OW Bunker’s risk management exposure had found significant losses in addition to the $24.5m loss announced on 23 October with the mark to market loss standing at $150m. The company immediately fired head of risk management and evp Jane Dahl Christensen.
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