OW Bunker teeters on the brink of bankruptcy after huge fraud at Singapore subsidiary

The group’s equity is lost.

Danish marine fuel supplier OW Bunker is now teetering on the brink of bankruptcy after uncovering a massive fraud at Dynamic Oil Trading, its Singapore subsidiary.

The fraud, committed by its senior employees in Singapore, could cost OW Bunker over $162m.

OW Bunker today revealed that it has not been able to find a solution with its creditors. Reuters reports that the firm owes over $971.6m to 13 banks.

“On this basis, it has been decided to file for commencement of in-court restructuring procedure in the subsidiaries O.W. Bunker & Trading A/S and O.W. 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,” OW Bunker said in a statement.

An 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. 

The procedure is intended to provide a tool for management and creditors alike, offering the possibility of rescuing an insolvent business, and thereby preserving its assets, rather than proceeding straight to the filing of a bankruptcy petition.

“For the time being, the financial impact cannot be assessed, however, it must be assumed that the group's equity is lost,” OW Bunker stated.