ABN Amro Files Claims Against Singapore’s Troubled Oil Firm

(Bloomberg) -- ABN Amro Bank NV has become the latest lender to make a claim against a Singapore oil trading giant that filed for protection from creditors amid a plunge in oil prices.

The Dutch bank filed applications for charges related to irrevocable letters of credit tied to assets of Hin Leong Trading (Pte) Ltd., according to filings with Singapore’s Accounting and Corporate Regulatory Authority.

The Amsterdam-based lender is the second bank to file charges linked to Hin Leong, which owes almost $4 billion to more than 20 Singaporean and international banks, including HSBC Holdings Plc, DBS Group Holdings Ltd. and Standard Chartered Plc. London-based HSBC has the most exposure to the oil trader at $600 million, according to a draft copy of Hin Leong’s presentation for bank creditors seen by Bloomberg News.

Hin Leong, founded in 1963 by Chinese tycoon Lim Oon Kuin, filed the application for a debt moratorium from Singapore’s High Court on Friday, according to people with knowledge of the matter.

Read how Hin Leong is said to have hidden $800 million losses.

Hin Leong owes $300 million to ABN Amro, the second largest bank creditor after HSBC, according to the April 14 presentation. An ABN Amro spokesman declined to comment. DBS, Singapore’s biggest bank, has exposure of $290 million, followed by Oversea-Chinese Banking Corp. at $250 million and Societe Generale SA at $240 million, according to the report.

The ABN charges filed April 17 relate to Hin Leong’s bills of lading, air waybills, cargo and warehouse receipts, as well as the goods shipped related to the bank’s credit.

The Monetary Authority of Singapore, the nation’s financial regulator and central bank, has been in contact with Hin Leong’s bank creditors, according to people familiar with the matter, who requested anonymity as the matter is confidential.

An irrevocable letter of credit can’t be canceled or amended by the issuing bank without the agreement of the parties in the credit transaction. Letters of credit are a critical financial lifeline for commodity traders, used as way of financing short-term trade. A bank issues the so-called L/C on behalf of the buyer as a guarantee of payment to the seller. Once the goods have exchanged hands, the buyer repays the lender.

Societe Generale last week registered several charges covering goods and receivables financed by the bank and the Hin Leong bank account with the Paris-based bank.

The table below shows the amounts Hin Leong owes to individual banks as of April 9, broken down into ranges, according to the draft presentation.

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