ABN Amro makes claims against troubled Singapore oil trading giant Hin Leong

The charges by ABN Amro Bank were related to irrevocable letters of credit tied to Hin Leong's goods and documents.
The charges by ABN Amro Bank were related to irrevocable letters of credit tied to Hin Leong's goods and documents.PHOTO: REUTERS

SINGAPORE (BLOOMBERG) - ABN Amro Bank 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 goods and documents 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 some US$3.85 billion (S$5.48 billion) to more than 20 Singaporean and international banks, including HSBC Holdings, DBS Group Holdings Ltd. and Standard Chartered Plc.

London-based HSBC has the most exposure to the oil trader, with about US$600 million, people familiar with the situation said.

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.

ABN Amro didn't specify the amount owed to the bank in the documents dated April 17. The charges covered include Hin Leong's bills of landing, air waybills, cargo and warehouse receipts, as well as the goods shipped related to the bank's credit.

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.


Chairman and CEO of Hin Leong Group Lim Oon Kuin. PHOTO: ST FILE

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.