OW Bunker presented DOT as golden egg in 2013

When Altor tried - in vain - to divest OW Bunker in March 2013, Singapore subsidiary Dynamic Oil Trading was presented as a booming growth enterprise. So why was the subsidiary completely absent from the IPO prospective on the basis of which 20,000 investors purchased shares a year later?
Photo: OW Bunker
Photo: OW Bunker

Why did OW Bunker's Singapore subsidiary Dynamic Oil Trading (DOT) disappear entirely from the sales prospect that the owner, private equity fund Altor, had produced when the fund performed an IPO and divested its stake in the Danish bunker company earlier this year?

That the IPO prospect - on which 20,000 major and minor investors based their OW Bunker investments back in March 2014 - did not contain one word about DOT was revealed already in late November. Altor explained this to ShippingWatch with the following answer:

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"In terms of the prospect, DOT is not mentioned separately as the company is part of the sales division and is thus handled like other sales units that are also not mentioned separately."

Six candidates

Separately might be a misleading term, as DOT is not mentioned once in the 272-page prospect.

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Though DOT was in fact mentioned exactly one year earlier, where Altor tried in vain to divest OW Bunker in one fell swoop to an international energy company.

According to ShippingWatch's sources, six serious candidates were in play at the time, including a Chinese company, but the negotiations ended without a result as the sums offered by the companies were too low for the equity fund.

Expansive growth enterprise

According to the sales material presented to the energy companies in 2013, Dynamic Oil Trading was not just a part of the sales division "Reselling" - the company was in fact highlighted separately on numerous pages as an expansive growth enterprise working aggressively to reach its target to become a "Top 5 bunker seller in five locations around the world within a five-year period."

The sales material, which Danish news media DR has gained access to and published on its website, shows that DOT is mentioned several times throughout the 95-page document as a driving force behind developments toward increasing revenue.

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DOT is mentioned separately on numerous occasions in the 17 pages of Section 5 in the presentation: "Reselling." Here one can read, among other things, that DOT, founded less than six months prior, would be expanding globally with staff operating with a "never give up" attitude, and that the Singapore subsidiary operated with higher profit targets and was thus "willing to accept slightly higher customer risk," according to the material. "However," says the material, "all OW Bunker corporate risk management policies and procedures apply stringently."

Back to the roots

DOT CEO Lars Møller, who is today seen as the key person responsible for the surprising deficit in DOT that led to the collapse of OW Bunker in early November, said the following about the new Singapore company in an interview with ShippingWatch back in the fall of 2012:

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"There are numerous reasons why we've decided to do it in this way. We believe we can develop a very strong organization that goes back to the very roots of the bunker industry, and that there's a niche for a company that enjoys a solid reputation throughout the entire supply chain."

He did, however, not hide the fact that DOT was based on a "fairly aggressive growth plan."


According to another section of the sales material from March 2013, the expansive global growth strategy also stated that the number of salesmen would be increased from three in February 2013 to 24 spread across five global locations.

The document from March 2013 is titled "Management Presentation" and features Morgan Stanley and FIH Bank as co-authors on the front page.

OW Bunker's Singapore company aggressive from day one

In addition to the fact that DOT is featured prominently in one prospect and completely absent one year later, numerous factors feature in both documents, including several texts as well as graphics, maps and cake diagrams used to illustrate the overarching story: that OW Bunker has expanded significantly in recent years. But there is at least one crucial piece of math missing.

Dynamic Oil Trading in Singapore has lost an estimated USD 125 million on, especially, large credits issued to local bunker supplier Tankoil Marine Services. This loss comes on top of a USD 150 million loss stemming from speculative oil contracts, which happened at OW Bunker's headquarters in Denmark.

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