Mariners Rescued from Disabled Barge Off Rhode Island
Three mariners were rescued from a disabled barge off the coast of Point Judith, Rhode Island on Wednesday after their tug sank. The U.S. Coast Guard reports that watchstanders at...
SINGAPORE (Dow Jones)–Indonesia’s Berlian Laju Tanker (B66.SG) said Tuesday it had obtained an order in the High Court of Singapore that prevents its ships from being impounded, a move that enables it to continue restructuring while it copes with the global slowdown in the shipping industry.
Berlian Laju said in January its subsidiaries had failed to make debt payments, then in February, the shipper–which has a fleet of oil, gas and chemical tankers–said it had defaulted on six U.S. dollar and local currency instruments. In January the company said that it estimated around $418 million in principal debt payments are due to be made this financial year.
Often seen as a barometer of global economic health, the shipping sector has been hurt by high fuel costs and a slump in trade that has suppressed freight rates. The company said operating in such conditions had “significantly impacted” its fiscal position.
The court order announced Tuesday will prevent any of the company’s assets from being impounded by a “limited number of creditors” for three months, the company said. It said it had obtained the order with the support of the largest group of bank creditors, who are led by Norway’s largest lender, DNB ASA (DNB.OS), according to Cosimo Borrelli, managing director of accountants Borrelli Walsh, which has been appointed by Berlian to help restructure the firm.
“There are a couple of small creditors that tried to arrest two ships overseas and that’s really what prompted taking the steps we did,” said Borrelli. When used in a maritime context, arresting a ship refers to trying to gain jurisdiction over a vessel that is the subject of a law suit.
Borrelli declined to name the creditors that were seeking to impound the vessels, but said that the order was sought with support from the company’s largest group of bank creditors.
Berlian Laju’s latest financial report from November 2011 states that one of the company’s subsidiaries in February 2011 obtained a loan with a maximum credit of $685 million from European banks DNB ASA, BNP Paribas SA (BNP.FR), ING Bank NV, NIBC Bank Ltd, Nordea Bank Finland Plc (NDA.SK) and emerging markets bank Standard Charted Bank PLC (SCZ.ZM). Sweden’s SEB AB (SEB-A.SK) in May 2011 joined the group of lenders, according to the report.
DNB were not immediately available for comment on the court order.
Borrelli said it is “very early days” for the company’s restructuring, and an update on developments should take several weeks. “The focus at the moment is ensuring it’s business as usual and the customers and suppliers are happy, which has been a very successful process so far,” he said.
“We’re not expecting a long-winded restructuring process, it’s quite a committed and planned effort by both the company and us and FTI and the execution so far has been pretty good,” he added.
The company has appointed FTI Consulting to carry out a financial assessment of the company. Trading in the company’s shares in Jakarta and Singapore was suspended in January.
-By Matthew Allen, Dow Jones Newswires; Joanne Chiu in Hong Kong and Gustav Sandstrom in Stockholm contributed to this article
Join the 62,975 members that receive our newsletter.
Have a news tip? Let us know.