Mercuria Said to Plot Hiring of Fuel Traders From OW Bunker

Dec. 2 (Bloomberg) — Mercuria Energy Group Ltd. is plotting a major expansion into marine fuels and is in talks to hire traders from failed Danish supplier OW Bunker A/S, according to two people familiar with the matter.

Mercuria is negotiating to hire as many as 50 former employees of OW Bunker, which filed for bankruptcy protection last month after the company alleged it uncovered fraud by senior staff in Asia. The talks are well advanced but could still collapse, said the people, who asked not to be named because the discussions are private.

A deal would extend Mercuria’s rapid growth that has seen the Cyprus-based firm with major trading operations in Geneva buy JPMorgan Chase & Co’s physical commodity unit for $800 million. That deal, completed in October, added more than 100 employees to Mercuria’s roster of 1,000 staff at 38 offices and boosted the 10-year-old firm’s gas- and power-trading operations in North America and Europe as well as its oil holdings.

Now Mercuria, founded by Swiss citizens and former Goldman Sachs & Co. traders Marco Dunand and Daniel Jaeggi, is looking to trade fuel used by cargo vessels and cruise ships as the next leg of expansion for the fastest-growing independent commodity trader. OW Bunker once sold about 7 percent of the fuel used by the world’s shipping fleet.

OW Bunker and some of its units filed for bankruptcy protection in November after saying two Singapore workers carried out a $125 million fraud. The Noerresundby-based company said it lost another $150 million on bad risk management.

Asset Sales

John Sommer Schmidt, one of the trustees appointed in the bankruptcy case in Denmark, did not immediately respond to a phone call seeking comment.

In March OW Bunker had Denmark’s second-largest IPO since 2010. The offering valued the company at almost $1 billion at the time and the shares soared 21 percent on their first day of trading.

The stock lost 42 percent before trading was halted on Nov. 5 when banks refused to provide more credit.

The potential deal between Mercuria and the ex-OW Bunker traders does not include any physical assets although Mercuria might be interested in acquiring assets sold through the bankruptcy process, one of the people said. Several investors expressed interest in buying all or part of OW Bunker, Danish newspaper Borsen reported Nov. 19, citing trustee Pernille Bigaard.

OW Bunker was founded in 1980 and had operations in 29 countries, including the U.S., South Korea, and Greece, according to its website.

–With assistance from Erik Larson in New York.

To contact the reporters on this story: Andy Hoffman in Geneva at [e-mail]; Yuji Okada in Tokyo at [e-mail] To contact the editors responsible for this story: Will Kennedy at [e-mail] Alex Devine