China Aviation Oil (Singapore) Corp (CAO), the country's former major jet-fuel supplier, had its yearly financial report of 2004 approved at a shareholders' meeting on February 3 and its plan to re-list on the Singapore Exchange (SGX) in March is pending approval by shareholders, due then, too, according to Gu Yanfei, head of CAO's restructuring task force, as reported in yesterday's China Securities Journal.

 

CAO lost more than US$500 million on risky oil trade in 2004, and its financial report that year was delayed until the end of 2005, pending a series of investigations by the Singapore government.

 

According to the financial report, CAO lost S$864.9 million (US$530 million) in 2004, and the losses were narrowed to S$7.30 million (US$4.47 million) by September 30, 2005.

 

CAO, which enjoyed a monopoly on importing jet fuel to China, shocked financial markets in November 2004 after it disclosed losses of about US$550 million from trading oil derivatives and applied to Singapore's High Court for protection from creditors.

 

As compensation to creditors, CAO's parent company, the state-owned China Aviation Oil Holding Company, injected US$75.77 million into CAO, about 34.4 percent of CAO's total capital stock after the restructuring.

 

In addition, BP is to invest US$44 million in CAO for 20 percent of its shares, and Singapore-based Temasek Holdings will purchase a 4.65 percent share for US$10.23 million.

 

David Gerald, head of Singapore's Securities Investors Association, said it will take a long time for CAO to be profitable again.

 

Sources from Singapore media said the SGX has "agreed in principle" to CAO's plan.

 

Gu said CAO will set up a new board of directors with two representatives from British oil giant BP Plc., but Singapore's state-owned Temasek will have no seat on the new board. Gu believed the move will help to "repair CAO's image."

 

Sources from CAO said the company will not cover the legal fees for Chen Jiulin, the suspended CEO of CAO. Chen is facing several charges relating to CAO's bankruptcy.

 

(Xinhua News Agency February 8, 2006)