Titan Petrochemicals back in black after selling off assets

PUBLISHED : Monday, 01 September, 2014, 11:06am
UPDATED : Monday, 01 September, 2014, 11:06am

Titan Petrochemicals, a debt-laden fuel logistics firm controlled by Guangdong Zhenrong Energy, said on Monday that its interim earnings had reverted to black after it disposed of at least 10 subsidiaries.

In a filing with the Hong Kong stock exchange, Titan reported profit before tax from continuing operations of HK$3.77 billion in the first half of the year, compared with a loss of HK$5.02 billion for the same period last year, thanks to a gain of HK$4.14 billion on asset disposals.

“We will continue to work extensively with our financial and legal advisers to further speed up the debt restructuring process and the resumption of trading of the company’s shares,” said Zhao Xuguang, the chairman of the firm, which is seeking to resume trading in its stock after a halt of more than two years.

Though undergoing the final stage of debt restructuring with major creditors, Titan did not generate any revenue from continuing operations for the first half, compared with sales of HK$117 million in the same period last year.

We will continue to work with our advisers to further speed up the debt restructuring process
Zhao Xuguang, Titan chairman

As a result of the asset disposals, net liabilities dropped to HK$4 billion in June from HK$7.7 billion at the end of last year, while cash and bank balances plunged to HK$2.5 million from HK$20 million.

Guangdong Zhenrong bought a majority stake in Titan from Fujian businessman Tsoi Tin-chun, paid off the debt of the shipyard Titan runs and bought its fuel storage assets from the firm’s liquidators.

Singapore’s Keppel, the world’s largest maker of oil drilling rigs by market share, clinched a preliminary deal in April last year to help Titan transform the shipyard into a rig maker, in exchange for an annual management fee of US$2 million and a share of its operating profit.