Titan Petrochemicals Group Ltd. (1192) should be liquidated because the Hong Kong-listed company is insolvent, private equity firm Warburg Pincus LLC said in a lawsuit.
Saturn Petrochemical Holdings Ltd., a Warburg special purpose vehicle, filed a winding-up petition in the Supreme Court of Bermuda on July 5, according to a copy obtained by Bloomberg News. Li Mingxia, a spokeswoman in Beijing for the New York-based firm, confirmed the document. A call to the Supreme Court of Bermuda outside office hours wasn’t answered.
Warburg has invested more than $215 million in the Titan group of companies since 2007, according to the petition. Shares in the provider of oil transportation and storage services were suspended in Hong Kong on June 19 after falling 22 percent this year, cutting its market value to HK$1.92 billion ($248 million).
Serene Goh, a spokeswoman for Titan Petrochemicals, said in an e-mail the company hasn’t been informed of a lawsuit asking for its liquidation on the basis of insolvency, and declined to comment further by phone today.
Titan, which provides services including oil storage and transportation in the Asia-Pacific region, reported a fiscal year net loss of HK$783.3 million on May 11 and said it’s seeking investors to buy an equity stake.
The company defaulted on HK$825.8 million of principal and HK$35.1 million in interest due on its U.S. dollar bonds on March 19. It hasn’t been profitable in any of the past five years, and its liabilities at the end of last year exceeded its assets by HK$1.24 billion, according to the petition.
Titan is unlikely to be able to redeem Warburg’s 555 million preferred shares, according to the document. Warburg sought redemption on July 4, claiming HK$384 million.
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