Chemoil Energy Limited Calls it a Day

Chemoil Energy (SGX: AV5), a global trader in marine bunker fuel, is in the last leg of its privatisation exercise. The company announced on Wednesday that its public shareholders’ float has fallen below 10%, a threshold that a company has to maintain to be qualified as a publicly-listed entity.

Therefore, Chemoil is arranging for the suspension of the trading of its shares, effectively delisting itself from the Mainboard Exchange.

What is Chemoil Energy?

Chemoil was founded by Robert Chandran, an Indian-born Singaporean entrepreneur. In the early 1990s, Chemoil was named as one of the largest privately-held companies in the United States when it became the largest marine bunker fuel supplier in the Americas.

However, Chemoil soon fell into hard times during the recession in the shipping industry that was brought about partly due to the Exxon Valdez oil spill disaster in 1989. After restructuring and cash injections, Chandran slowly rebuilt Chemoil, moved the company’s headquarters to Singapore, and was eventually able to list it on Singapore’s stock exchange in 2006.

Unfortunately, Chemoil suffered another major blow when founder CEO Chandran was tragically killed in a helicopter accident in 2008. Before his death, Chandran was named by Forbes magazine as one of the richest people in Singapore.

In 2010, Glencore Xstrada (LSE: GLEN) (then named Glencore Inc) bought a majority stake in Chemoil. Glencore Xstrada further consolidated its holdings in Chemoil in 2012 by buying out Japanese oil trader Itochu’s  37.5% stake in Chemoil.  With that move, Glencore Xstrada thus became a 89.2% owner of Chemoil Energy.

A new beginning for Chemoil Energy

On 25 Feb 2014, Chemoil Energy made a voluntary delisting-announcement by offering all public shareholders US$0.40 per share for their holdings. That was a 30% premium from its last traded price of US$0.31 per share. As Glencore Xstrada is a public company itself, there is little need to maintain Chemoil Energy’s status as a listed entity and the delisting would allow management greater control in building Chemoil Energy’s business.

As Chemoil Energy reaches the end of its era as a publicly-listed company, I bid it farewell and good luck in the next stage of its development. Chemoil Energy will always serve as a legacy for its late founder Chandran. In light of that, it is only fair to end this article with a quote from the late entrepreneur himself:

“Don’t become an entrepreneur to make money, but be one because you want something you enjoy doing. That way, you will ultimately make money.”

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Stanley Lim doesn’t own shares in any companies mentioned.