The Singapore-based containership lessor, which has a fleet of 14 Panamax ships, said it will wind up operations in the wake of defaulting on loans.
Singapore-based containership lessor Rickmers Maritime said Wednesday it will wind up operations after defaulting on loans.
Rickmers Maritime said it has decided to wind up operations after it was unsuccessful in December 2016 in obtaining noteholders’ approval to restructure $100 million Singapore (U.S. $71.6 million) 8.45 percent medium-term notes, which was a condition for the restructuring of the Trust’s secured bank loans via a U.S. $260 million new facility agreed to by senior lenders.
As a result, Rickmers Maritime defaulted on a U.S. $196.7 million principal repayment to a syndicate of the HSH Nordbank AG and DBS Bank Ltd on March 31, and a $4.3 million Singapore coupon payment to noteholders in November 2016.
In addition, there were “various breaches in loan covenants, which have cast material uncertainties on the Trust’s ability to continue as a going concern,” the company said. “This situation places the Trust in a situation of aggravated and unsustainable illiquidity going forward.”
The company said its “Trustee-Manager is in advanced discussions with a potential buyer for the Trust’s assets, which may allow the Trust to distribute cash recoveries upfront to unsecured creditors. While the parties are in advanced discussions, no deal has been finalized at this stage.
“Regrettably, unitholders are highly unlikely to recover any of their investments,” the company added.
“The winding up of the Trust will be executed by the Trustee-Manager in an orderly manner,” the company said. “It is expected that the business operations of the Trust’s vessels will remain unaffected by this process and that the Trust will continue to meet its ongoing charter party obligations to its customers.”
Rickmers Maritime has 14 Panamax ships in its fleet with an aggregate capacity of 57,100 TEUs, according to the company’s annual report published last month. Eleven of the ships have a capacity of 4,250 TEUs and were built between 2007 and 2009, while the other three ships have a capacity of 4,300 TEUs and were built in 2006 and 2007.
Five of the 4,250-TEU ships were under charters that expire in 2018 and 2019 to Japanese liner carrier MOL. Because they were under long-term charters at better rates, the MOL charters accounted for 70 percent of Rickmers Maritime’s U.S. $69.2 million in revenues in 2016. Another five ships were on short-term charters that command lower rates. The remaining four ships were to be liquidated.
Rickmers Maritime is exiting as other companies believe there is a recovery for smaller containerships.
Just this week, Hamburg-based MPC Capital said it had initiated a new containership investment company with $100 million in equity that will focus on containerships between 1,000 and 3,000 TEUs.
“First signs of a recovery are currently seen in the container shipping market, with freight rates above 2016 levels and charter rates trending up in the first quarter of 2017,” MPC said. “Market analysts, Maritime Strategies International (MSI), projects a market-wide recovery, while highlighting that supply and demand dynamics for the small-size segment are particularly favorable as they provide insulation against downside risks. Overcapacity in the container market has led to a historic downturn in charter rates and asset values. Analysts therefore see attractive investment opportunities in the market – a view shared by MPC Capital.”
As Rickmers Maritime is winding up, “the charter market is
enjoying a strong rally from the hitherto record lows,” The Loadstar reported. “According to
Alphaliner data, Panamax vessels that were lucky to obtain $4,000 a day
only a few months ago, with ships being ballasted to their charters, are
now commanding rates of $11,000-plus.”
Rickmers Maritime winds up operations
