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November 30, 2007 |
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SEMBCORP MARINE: Asks Court to Protect Unit from BNP Liquidation SembCorp Marine Ltd. asked a Singapore court to protect its unit from liquidation by France's BNP Paribas SA, the Wall Street Journal reports. According to Reuters, the Singapore-based rig-builder is seeking court injunction to stop BNP Paribas from demanding millions of dollars in payment from its subsidiary -- Jurong Shipyard -- for currency trades. SembCorp, Reuters recalls, has said it lost US$303 million due to alleged unauthorized currency trades by former finance chief Wee Sing Guan, who was terminated in October. The loss, the report notes, is the biggest trading loss in Singapore since 2004 when China Aviation Oil lost US$550 million in botched bets on oil prices. WSJ says that SembCorp has pledged a US$115.45-million payment to Societe Generale SA of France, but it remains unclear when it will settle debts with 10 other banks involved in the illegal trades. According to Reuters, SembCorp agreed to pay Societe Generale after the French lender assured it would refund the amount if it was proven that the SembCorp subsidiary is not liable for the losses. The report recounts that BNP asked SembCorp last week to pay US$50.7 million to settle BNP's share of the debt. However, SembCorp claims that it is not liable for the trades, which were placed through Jurong Shipyard. "BNP Paribas's statutory demand is baseless and an abuse of the winding-up process," WSJ quotes SembCorp as stating. BNP had previously said that if Jurong Shipyard does not pay the amount immediately, it would file a case in the court seeking to have the subsidiary wound up. Reuters, however, notes that BNP said it would not file the wind-up application against Jurong Shipyard until the court has heard the case from SembCorp. Sembcorp therefore asked Singapore's High Court for protection from BNP on Nov. 23, and the request will be heard on or after Jan. 14, WSJ says. WSJ cites analysts as explaining that it is natural for creditors to ask for payment on the outstanding debt, which exceeded the company's entire 2006 net profit of SGD238.4 million (US$165.1 million). "BNP should be asking for the money at this point," said an analyst. "If SembCorp wants to hold an investigation, it should pay all of the banks first -- not just Societe Generale." SembCorp Marine -- http://www.sembcorp.com.sg/ -- is a leading global marine engineering group specializing in a full spectrum of integrated solutions, ranging from ship repair, ship building, ship conversion, rig building to offshore production and engineering. As one of the largest marine engineering leaders in Asia, SembMarine's global network spans 14 yards in the four strategic hubs of Singapore, China, Brazil and U.S.A. Singapore-listed SembCorp Industries has a 61% stake in SembCorp Marine. SembCorp Industries is in turn 49% owned by Singapore's state investment firm Temasek Holdings. |
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