Danish marine fuel bunkering company OW Bunker has advised investors to assume its equity is "wiped out flat" after it suspended shares following allegations of fraud by senior employees in Singapore.
In an announcement last night, it confirmed an investigation into the allegations is under way, but added that initial findings suggested the fraud had resulted in a loss of around $125m, which it said would affect its operations and “credit facilities”.
As a result, the company has had to begin restructuring its subsidies OW Bunker & Trading and OW Supply & Trading.
Nordea Bank helped advised on the original sale. It told Bloomberg it was “shocked” by the yesterday's news.
"No one can foresee fraudulent activity by individuals,” said the bank's spokesman Stephen Ghisler-Solvang. “No one could foresee that the company would incur losses of this magnitude after the IPO.”
“We strongly believe that we have conducted a thorough and correct process assisting OW Bunker in the IPO process together with the two joint global co-ordinators,” he continued.
TURN FOR THE WORSE
It was only eight months ago that the company first went public, with a valuation of $1bn. During its first day of trading on 28 March, shares rose 21 per cent as investors battled to throw money at such a promising venture.
The incredibly positive performance resulted in it being Denmark’s second-biggest IPO since 2010, but since then shares continually declined in value, reaching around half their original value in recent weeks.
Besides the allegations of fraud, OW Bunker has also suffered from a “significant risk management loss” of around $150m. It has fired Jane Dahl Christensen, its head of risk management.
“This situation has snowballed over an extremely short period of time,” Soeren Johansen, a partner at Altor Equity Partners which owned OW Bunker since 2007 until its IPO, said in a statement today.
“Since being informed of the situation, the board has done all it can to try to protect what was, before the breaches mentioned in the company’s release, a very sound business.”