rickmers maritime

Rickmers Investors Seek Bond Payment Amid Singapore Stresses

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October 20, 2016

Photo: Rickmers Maritime

By Denise Wee

(Bloomberg) — Singapore-based shipping trust Rickmers Maritime said it received a letter from lawyers representing some investors stating their desire to take “legal steps and actions against the trust to enforce repayment” of bonds due next year.

The development comes after some holders of the firm’s S$100 million ($72 million) of 8.45 percent notes due in May 2017 sought accelerated repayment last month, as the operator of container ships proposed a debt restructuring plan to help avoid potential liquidation or judicial management. The letter said that the trustee DB International Trust (Singapore) Ltd. has “failed to institute any action against the issuer,” according to a statement Thursday from Rickmers.

More firms in the city-state’s shipping and oil and gas services industries are seeking leniency from creditors on their debt loads amid weakening economic growth. Container throughput in Singapore shrank 8.7 percent in 2015 as global trade slowed, and strains in the city’s maritime sector are mounting as companies including Marco Polo Marine Ltd., KS Energy Ltd. and other oil and gas services providers have asked for more time to repay debts.

“There was a debt binge when commodity prices were high with companies investing heavily and now they have been hit by a downturn,” said Damien Whitehead, a partner at White & Case LLP, adding that he expects to see an upswing in restructurings in Southeast Asia.

Investor Demands

The mention of DB International Trust in the letter comes after three noteholders said on Sept. 28 that investors owning more than 25 percent of Rickmers’s 2017 notes delivered a notice seeking better terms to the trustee.

Karene Dufour, a Hong Kong-based spokeswoman for Deutsche Bank AG, the parent of DB International Trust, declined to comment.

Rickmers Trust Management Pte., the trustee-manager of Rickmers Maritime, hasn’t received any notice from the bond trustee DB International stating that the notes are immediately due and payable, according to the Thursday statement.

The trustee, if requested by holders of at least 25 percent of the outstanding notes, may give notice that the securities are immediately repayable, according to the filing.

“No noteholder shall be entitled to proceed against the trust unless the notes trustee, having become bound to do so, fails to do within a reasonable period and such failure is continuing,” it said.

© 2016 Bloomberg L.P

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