CPC loses $60 mln hedging case vs Deutsche Bank

2 November 2012 01:20 pm - 19     - {{hitsCtrl.values.hits}}

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Sri Lanka's state-run oil company has lost a $60 million hedging case against Deutsche Bank after a U.S.-based arbitrator ruled in favour of the bank, officials said on Friday.

A source familiar with the ruling said Ceylon Petroleum Corporation (Ceypetco) would have to pay Deutsche $60.3 million plus interest for non-payment of dues.

 “It's against us,” Sri Lanka's Attorney General Palitha Fernando told Reuters. “Now we are considering what actions to be taken to annul this.”

Oil Minister Sisil Premajayantha told Reuters he was not aware of the ruling but would appeal if the case went against the company.

 Three foreign banks, Standard Chartered, Citigroup and Deutsche, took legal action after Ceypetco refused to make hedging payments of more than $460 million, including to two local banks. Deutsche had asked the Washington-based International Centre for Settlement of Investment Disputes to arbitrate.
Ceypetco, which imported some 26 million barrels at a cost of $2 billion in 2007, needed to hedge its purchases of crude oil and refined products on the international market.

 It was exposed to the oil rally of 2008, when oil hit a record high above $147 a barrel in July before crashing to less than $40 a barrel in December.

 In July, Ceypetco lost an appeal against a London court ruling which ordered it to pay nearly $162 million plus interest for non-payment of dues to Standard Chartered Bank linked to hedging deals.  Standard Chartered argued that Ceypetco had always been aware that a fall in oil prices would have made it liable to make payments to the UK-based bank.
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  Comments - 19

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  • patriotic Sunday, 04 November 2012 12:00 AM

    recover the lost from the former CPC hedgehog Asantha De Mel. why the hell we have to pay for all the lost that CPC makes when one has misused public money. via DM Android App

    Jagath Leanage Saturday, 03 November 2012 01:06 AM

    Thank you Asantha de Mel ! Where ever you go, you loose.2007,20011 worlld cup final,2012 T20 and CPC cases.What a track record you have.We, general pulic has to suffer.

    senavi Friday, 02 November 2012 01:46 PM

    Mega thieves - the closer you are to the center, safer you are from prosecution

    buruwa Friday, 02 November 2012 01:52 PM

    spend another 1 billion to appeal again. Officers can have lot of foreign tours. Apeal 10 more times in 10 countries so that top level people can have lot of foreign family tours.

    Shace-UK Friday, 02 November 2012 01:52 PM

    So whats the big deal....increase the petrol price an put the general public in deeper trouble...

    Lobo Friday, 02 November 2012 02:19 PM

    But as usual no one will be held responsible and the public will end up paying. The main culprit is now head of SLC....I rest my case!!!

    Nimal Ranasinghe Saturday, 03 November 2012 02:31 AM

    I can not understand why such type of foolish agreements are entered into. Hedging is there for reduce the risk not to increase the risk.

    RamUK Friday, 02 November 2012 02:59 PM

    good luck with the next move guys ....Lol ..more interest to pay any way borrow from the illegitimate husband CHINA to finance this

    Jayantha Saturday, 03 November 2012 03:22 AM

    Those responsible for these deeds must be impeched!

    kabi Friday, 02 November 2012 03:00 PM

    Why the culprits who were responsible for these huge hedging losses were not brought before courts or bribery commission like what they have done with Pradeep Kariyawasam??? Is this what called selectivity?? TFC loss was nothing compared to the loss from the hedging deal!!!

    jagath Friday, 02 November 2012 03:02 PM

    This is nothing. we have given credit under Ceylon to Germany after world war . Check this information.

    Sara Sunday, 04 November 2012 10:15 AM

    yes, very very true

    Nadi Saturday, 03 November 2012 03:56 AM

    Why waste money on another appeal. Is any minister resigning because the people have been cheated out of a lot of schools, roads and hospitals because of this.

    thejoy Saturday, 03 November 2012 05:50 AM

    how responsible it is for the minister to say "was not aware of the ruling".. anyways, congratulations, Mr. Minister and the people who concerned. without you guys SL would have been a better place.

    Lanka Muslim, UK Friday, 02 November 2012 05:36 PM

    Oh..just pay it off. It goes from the people not from your own pocket. Therefore it is okay. You have paid more than this.

    Epavela Saturday, 03 November 2012 06:19 AM

    what are these politicians doing to our country? they are irresponsibly playing with public money..thus money taken from taxing the people for mobile usage, vehicle imports, sunlight, crude, rice, vegetable imports etc are going to be paid to close these hedging loses...aney people why are you still voting MR? are you really wise?

    wild Saturday, 03 November 2012 06:32 AM

    clear indications of fuel price hike around the corner now !!

    Janaki Kalansuriya Friday, 02 November 2012 11:51 PM

    and Asantha De Mel continues to play Contract Bridge. What a clever man to be appointed to high places!! So it will be the public who will repay with more tax burdens on them.

    absl Saturday, 03 November 2012 12:00 AM

    Those who areresponsible for this bad transaction should make good the loss without giving further burden to general public. via DM Android App


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