GP Global APAC Seeks Six-Month Debt Moratorium in Singapore
“The moratorium application simply seeks to give effect to the in-principle agreement and allow GP APAC breathing space to carry on with the restructuring,” said Moses Lin, a legal adviser to GP APAC and partner at the law firm Shook Lin & Bok LLP.
Daniel Tan, another GP APAC adviser from the same firm, told Reuters: “The potential for seeking a moratorium in support of the restructuring has always been an option in the event any minority creditor falls out of line, and as you can see, that has happened with a couple of minority creditors.”
GP APAC owes more than US$464 million to its top 20 unsecured creditors, according to an affidavit filed by Roderick Sutton, GP APAC’s sole director. Sutton, from FTI Consulting, was appointed GP Global’s chief restructuring officer in August.
Among the unsecured creditors is Singapore-based marine fuel supplier Equatorial Marine Fuel Management Services, which has more than US$700,000 in claims against GP APAC, according to the affidavit.
After GP APAC defaulted on Equatorial’s payment demand, Equatorial in January obtained a court ruling allowing it to seize GP APAC’s Singapore office, according to the affidavit.
That derailed GP’s plans to sell the office for S$8.5 million.
In doing so, “Equatorial sought to queue-jump” by laying claim on the property “which is meant to be divided equally to all creditors”, Mr Sutton told Reuters by phone.
Equatorial declined to comment, citing ongoing discussions.
Equatorial’s action also prompted Singapore’s DBS Bank to withdraw credit facilities for GP APAC and demand a repayment of more than S$2.4 million, according to the document.
DBS and the other debtors ie. Credit Suisse and UBS declined to comment.
Mr Sutton said in the affidavit that “various irregular commodity trades and/or fictitious trades where there was no actual transfer of any underlying cargo” led to the company’s financial woes.
“This left the group with significant bad debt as the trade receivables due from these ‘trades’ are unlikely to be recoverable,” he said.
He told Reuters GP Global’s unsecured liabilities were expected to be reduced to about US$800 million or less.
Asked how much creditors could expect to recover, he said that if the restructuring proceeds, “We think it’s 20 to 30 cents on the dollar – and if there is a liquidation it’s zero.”