BEIJING • Singapore investment firm, New Silkroutes Group, is set to launch two China-focused funds worth US$1.6 billion (S$2.2 billion) in total and is looking to expand its oil trading business with Chinese customers following a restructuring.
The former loss-making information technology firm repositioned itself last year as an investment company under new management led by Mr Goh Jin Hian, a former healthcare executive.
The group expects to obtain Singapore licences shortly for a US$600 million healthcare fund and another with a minimum size of US$1 billion focused on energy infrastructure, company executives told Reuters in an interview. "We're interested in allocating funds in infrastructure like oil storage or even a stake in a refinery," said Mr Goh, who is the chief executive officer.
Executives said seed funding of US$200 million for the healthcare fund has been agreed on with a private Chinese group involved in aluminium smelting and property.
New Silkroutes' energy business, the International Energy Group, currently contributes about 90 per cent of group turnover and is expected to generate revenue for the year ending June 2017 of US$225 million, up fourfold from a year earlier, they said.
The unit, which started as a gas oil and fuel oil trader, is branching into crude oil. This week, it appointed Mr Nelson Goh, previously of Singapore oil trading firm Hin Leong Group, as head of crude oil, adding to an oil products trader and coal trader.
The company aims to work with more Chinese customers, expanding trades in yuan, the Chinese currency, to attract new business in oil and coal, the executives said.
The firm intends to pre-sell oil cargoes to customers and receive payment in yuan in the form of 90-day letters of credits.
New Silkroutes reached a deal this week to work together with a unit of state-owned China Shipbuilding Industry Corp on oil procurement from the Middle East and as well as investing in storage facilities.