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OW Bunker to restructure subsidiaries after alleged $125 million fraud
By Kali Hays
New York, Nov. 6 – OW Bunker AS has filed for an in-court restructuring of its main operating subsidiaries, O.W Bunker & Trading AS and O.W. Bunker Supply & Trading AS, with the probate court in Aalborg, Denmark, according to a Thursday news release form the company.
OW Bunker said that the financial impact of a restructuring “cannot be assessed” but “it must be assumed the group’s equity is lost” as both companies are expected to be insolvent.
The restructuring comes as a result of senior management of OW Bunker discovering an alleged fraud committed by “senior employees” of its Singapore-based subsidiary Dynamic Oil Trading and the company being unable to negotiate with its syndicate banks.
“The extent of the fraud is not yet clear, but preliminary findings suggest a potential loss of around $125 million,” the release stated.
An investigation of the alleged fraud is ongoing.
Moreover, a review of OW Bunker’s risk management contracts showed “a significant risk management loss” and in an effort to “reduce exposure to an absolute minimum level,” the company is unwinding current risk management contracts and dismissed its head of risk management Jane Dahl Christensen.
Together with a $24.5 million risk management loss in October, OW Bunker estimated its total mark to market loss to be around $150 million, according to a separate release.
OW Bunker said that the in-court restructuring may allow for the preservation of its operations and assets, “offering the possibility of rescuing an insolvent business, rather than proceeding straight to the filing of a bankruptcy petition.”
OW Bunker is an independent distributor and reseller of marine fuel based in Denmark.
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