BNP Paribas and its partners in a Scottish energy loan are staring at a loss of $172m after entrepreneur Ian Suttie’s venture went bankrupt, illustrating the wreckage banks are likely to face from the oil bust.
Bloomberg News reports that First Oil Plc, an Aberdeen-based operator in the North Sea, entered U.K. bankruptcy protection in February.
While the lenders are jointly owed about $210m, they may only receive about $38m in proceeds from asset sales, according to Bloomberg calculations based on bankruptcy filings.
The banks, which include Barclays and ING Groep, agreed to accept the writedown on April 4, a filing shows. Bank of Nova Scotia has sold its share of the debt, spokeswoman Diane Flanagan said.
The episode shows how quickly millions of dollars in bank debt can evaporate when energy prices collapse.
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