Middle East trader FAL Oil, in talks with creditors on $700 million in debt, is on the cusp of hiring a chief restructuring officer to keep the faltering discussions on track, sources familiar with the matter said on Sunday.
United Arab Emirates-based FAL, once one of the biggest regional fuel oil traders, has been forced to cut its fuel oil and bunkering operations in the UAE by as much as 60 percent and shut its trading operations in Singapore and London.
"FAL is in the process of hiring a CRO, which could be finalised in a week's time," said a source close to the matter, speaking on condition of anonymity.
"Everyone's interests are aligned - the company's, the banks'. There are different levels of support from banks depending on their exposure, and the only option now is the restructuring."
The company declined to comment. FAL previously presented a medium-term plan to its creditors that included a standstill agreement for its existing $700 million in debt and a request for $620 million in fresh funds to keep business operations going.
Last month, sources told Reuters banks were likely to reject the restructuring plan.. "There has been no explicit yes or no from banks," the source close to the matter said.
The Al Sari group, which owns FAL, is also putting in its fair share of new money as it seeks to prevent the year-long restructuring process from being derailed, the source added. "Some creditors don't want to put in new money, but we are trying to get them to agree," a banker involved in the talks said, adding discussions had been delayed due to the traditional regional summer lull and the holy month of Ramadan.
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