China Oil Refiner Is Said to Seek Loan Repayment Schedule Delay
China Oil Refiner Is Said to Seek Loan Repayment Schedule Delay
(Bloomberg) -- Shandong Qingyuan Group Co. is seeking to delay the repayment schedule of a $955 million loan as recent volatility in global oil prices has reduced the Chinese oil refiner’s cash flow, according to people familiar with the matter.
The company, based in the eastern Shandong province, informed lenders on a conference call Tuesday about its intention to extend the end of the grace period before the due date of the loan’s first installment by a year to June 2021, said the people, who are not authorized to speak publicly.
Shandong Qingyuan didn’t immediately reply to calls seeking comment.
The amortizing loan, guaranteed by Shandong Qingyuan and Shandong Qingyishan Petrochemical Technology Co., is tied to a contract for offtaker CNOOC Marketing Shandong Co., said the people. Fifteen lenders have joined the facility including commodity trader Trafigura Pte. Ltd., which committed $30 million at the signing of the loan in 2019, Bloomberg data show.
The company could be the latest victim of the recent collapse in oil prices, which have tumbled by about 50% since the beginning of this year, as the market is hit by a double whammy of oversupply and plummeting demand.
There’s also been heightened caution among lenders about financing commodity firms. Singapore oil trader Hin Leong Trading (Pte.) Ltd. has appointed advisers to help in talks with banks as some of them freeze credit lines to the firm, Bloomberg reported last week.
Based in Zibo, Shandong province, Qingyuan Group’s business spans from oil refining to logistics and trading, according to its website. Known as one of the privately owned teapot refiners, it operates two plants with a combined annual processing capacity of 8.2 million tons of crude oil and aims to produce more than 5 million tons of lubricant oil this year, its website shows.
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