Under strategic plan, the Mobile, Ala.-based company will focus on Jones Act shipping, pure car-truck carriers, and its rail ferry between the United States and Mexico.
International Shipholding Corp. said Monday that it had a loss of $7.2 million in the three months ending Sept. 30, compared with a net loss of $2.6 million in the same 2014 period.
The company said its board of directors on Oct. 21 approved a strategic plan to streamline the company principally by focusing on three core segments: Jones Act domestic shipping, the operation of pure car-truck carriers (PCTCs), and a rail ferry it operates between Mobile, Ala., and Coatzacoalcos, Mexico.
International Shipholding said it will divest itself of non-core assets including “dry bulk carriers, specialty contracts and other segments. In addition to these assets, the company also intends to divest of its minority ownership in mini-bulkers, chemical tankers and asphalt tankers, as well as one international-flag PCTC vessel, the Glovis Countess.”
The company said it had been granted waivers through March 31, 2016, from lenders and lessors to support carrying out its strategic plan and said implementation of the plan will improve its “leverage and liquidity profile to enable accretive fleet growth in core segments.”
It believes successful implementation of the strategic plan will strengthen its financial position by reducing debt from $213.7 million as of Sept. 30, 2015, to about $90-$100 million by June 30, 2016.
“While we have classified all of our outstanding debt as current on our condensed consolidated balance sheet as of Sept. 30, 2015, none of our creditors accelerated our debt and demanded immediate payment in full (except for mandatory prepayments in connection with the sale of specified collateral),” the company said in a statement. “Instead, we determined that GAAP requires us to reclassify all of our debt to current because of the uncertainty of being able to assert that we will be in compliance with all of our debt covenants for the next twelve months.”
Niels M. Johnsen, chairman and chief executive officer, stated, “Subsequent to the adoption of our strategic plan to streamline the company around our core segments, I am pleased to announce that we have reached an agreement with all of our lenders and lessors that supports our efforts to transform International Shipholding into a leaner, more focused, and more profitable company.
“We believe that value exists in our long-term customer relationships, our high-quality assets, our deep industry experience, and our leading competitive positions in our core, niche segments,” he added. “With the strategic plan and the full support of our lenders and lessors secured, we are now in a position to move forward in an orderly manner with the divestment of our non-core assets, and the unlocking of International Shipholding’s value for the benefit of our shareholders.”
According to the company’s March 4 proxy statement, the Johnsen family owns about 20.5 percent of the company and “may be deemed to control our company.” Erik L. Johnsen, Niels M. Johnsen’s cousin, serves as president of International Shipholding. Their fathers founded and led the company for many years.
Shares of International Shipholding, which are traded on the New York Stock Exchange, have tumbled in recent years. The company’s stock closed at $2.10 on Monday. In March 2014, it had traded for as much as $32 per share.
International Shipholding reports $7.2 million loss in 3rd quarter
