Just when you thought things couldn’t get any worse, they did.
That’s probably what oil entrepreneur Xue Guanglin was thinking last week, when a Hong Kong judge officially declared him bankrupt in connection with a long-running case involving financial woes at his company, Brightoil Petroleum.
Xue’s company has left a trail of unpaid bills and other bad debt as it deals with its own financial struggles, and its Hong Kong-listed shares have been suspended from trading since October 2017, when its problems first came to light.
The latest action came from one of Brightoil’s suppliers, Vietnamese national oil company Petrolimax. The Vietnamese firm sold Brightoil’s Singapore subsidiary about $30 million worth of products with a payment date of April 23 last year.
You can probably guess what’s coming next, as Brightoil not only missed that date but also several others afterwards. So Petrolimax decided to go after Xue in court as the personal guarantor for his company’s debt. Accordingly, the high court ruled last Thursday that Xue was bankrupt due to his status as personal guarantor of overdue debt that Brightoil was unable to repay.
Petrolimax’s dispute was just the latest for the embattled Brightoil. As the complaints piled up, the company announced a series of steps last November to reorganize and raise more money in a bid to return to financial health. It estimated its total obligations at the end of January stood at about $1.9 billion. That same month, it said it obtained $700 million of financing from China’s state-run energy giant, China National Offshore Oil Corp., or CNOOC.Related: Brightoil Secures $700 Million Financing from CNOOC