Aviation Oil to receive support from parent
China Aviation Oil Holding Co. (CAOHC), parent of struggling China Aviation Oil (Singapore) Corp. (CAO), said late Tuesday it would provide financial support to CAO to resume its jet fuel procurement activities.
The parent company also reiterated it would support CAO¡¯s restructuring proposal to enable the Singapore-listed unit to continue normal business operations and allow the shares to resume trading.
¡°However, as a commercial entity and as a Chinese State-owned enterprise responsible for a critical function in the Chinese economy, we¡¯re not in a position to pledge unconditional support,¡± CAOHC said in a statement.
Its support for the struggling unit was conditional upon sufficient resolution of the legal and regulatory issues concerning CAO, the parent company said.
¡°We are in talks with CAO to provide funding to its newly-incorporated subsidiary, CAOT Pte. Ltd., so that CAOT can resume jet fuel procurement business during this period prior to the implementation of the restructuring proposal,¡± CAOHC said.
The company has appointed a special task force to help with the restructuring.
It also pledges to provide ¡°full cooperation to the investigating parties to enable the investigations to be completed expeditiously.¡±
In a separate development, the Business Times reported Wednesday CAO¡¯s chief executive officer Chen Jiulin had resigned as president of the trade group China Enterprises Association Singapore (CEAS).
Ji Haisheng would replace Chen as president of the CEAS, which had 120 members, the paper said.
The CEAS said the CAO affair was an individual case and would not affect its operation.
CAO is being investigated by Singapore¡¯s stock exchange authorities, the Monetary Authority and the Commercial Affairs Department after it shocked the market last month when it disclosed a US$550 million loss in oil derivatives trading.