(Bloomberg) — A United Arab Emirates-based energy trader is seeking to restructure its finances after the coronavirus pandemic sent oil prices tumbling and lenders withheld credit lines.
GP Global Group started the restructuring effort as the virus swept through economies around the world, a company spokesperson said. The move reflects months of turmoil in crude markets as a 35% slump in prices this year plunged producers and traders into crisis.
GP Global, which changed its name from Gulf Petrochem Group in 2018, has been “targeted by vested interests” spreading rumors about its financial standing, the spokesperson said. “A few financial institutions” have declined to provide credit for some trades, forcing it to look for alternative funds.
The company, which has offices in Dubai, operates a tank farm at regional trading hub Fujairah, with 412,000 cubic meters of capacity to store and blend fuels. It also has a 200,000-cubic-meter storage terminal and a 9,000-barrel-a day refinery at the port of Hamriyah in the UAE emirate of Sharjah.
Both storage terminals at Fujairah and Hamriyah continue to operate normally, the spokesperson said.
Though cash is tight, many of GP’s peers are in a similar position and the company is confident of attracting new investment, according to the spokesperson, who said the restructuring should be completed in the next few months.
Several trading houses have been in the spotlight after oil plummeted this year, prompting banks to reduce credit lines and look more cautiously on financing commodity trades. Two Singapore traders failed earlier in 2020 amid allegations they hid losses or used the same cargoes as collateral for different loans.