Borrelli Walsh appointed receiver of Jurong Aromatics
Jurong Aromatics hasn’t been able to service interest payments
Jurong Aromatics Corp., operator of one of the world’s largest petrochemical plants, has been pushed into receivership after debt-restructuring talks stalled amid faltering demand for commodities.
Restructuring firm Borrelli Walsh has been appointed the receiver of the $2.4 billion plant on Singapore’s Jurong Island, according to a filing dated Monday with the city’s Accounting & Corporate Regulatory Authority. Jurong Aromatics, whose shareholders include South Korea’s SK International Investment and Glencore Pie, hasn’t been able to service interest payments amid a plunge in oil prices, and operations have been stalled since December, people familiar with the matter said last month.
The latest move comes amid a China-led slowdown that’s hurt prices for commodities from oil to copper and Jurong Aromatics’s shareholder Glencore losing almost $45 billion in market value this year. Singapore’s Economic Development Board had said the plant had given a boost to the city’s reputation as a leading chemical hub. The government agency’s investment arm has a 5 percent stake in the project and had tried to facilitate discussions among the stakeholders.
”Unfortunately, the parties involved could not agree on a commercially viable agreement,” said Damian Chan, executive director of energy and chemicals at the EDB. “The impact to the rest of the energy and chemicals industry is expected to be limited.”
Jurong Aromatics said in an e-mailed statement it declined to comment. Cosimo Borrelli, Hong Kong-based managing director at the receiver, didn’t respond to a phone call and e-mail.
“Given the quantum involved and the original aspirations behind the formation of the company, this does look like a setback,” said Vishnu Varathan, a Singapore-based economist at Mizuho Bank Ltd. “The broader petrochemical industry has also evolved rapidly and become much more difficult to keep up.”
The petrochemical plant operator had been locked in talks with lenders including BNP Paribas SA and Standard Chartered Pie, as well as suppliers Glencore Pie, BP Pie and SK Energy Co., the people said, asking not to be identified because the details are private.
The company had $1.53 billion in liabilities and $68.7 million of accumulated losses as at the end of 2013, according to the company’s latest available financial records. BP, Glencore and SK Energy have secured claims against the firm, while BNP Paribas led a $1.73 billion loan facility in 2011 that has yet to be repaid, the records show.
Jurong Aromatics is owned 30 percent by SK International Investment, 25 percent by China’s Jiangsu Sanfanxiang Group Co. and 10 percent by Glencore. Other shareholders include Arovin Ltd., Shefford Investments, UVM Investment Corp. and Essar Ltd., company records filed with the Accounting & Corporate Regulatory Authority show.
By Andrea Tan and Christopher Langner