Rickmers misses interest payment and scraps ship

pic3bignewOn 15th November Reuters reported that Singapore-based Rickmers Maritime, which operates a fleet of 16 container ships, had been unable to pay interest of $3 million on a $71 million bond. A statement from the company said it faces the risk of going out of business unless it could restructure the debt with bond holders and senior lenders. This followed the company posting a loss of £74 million in the third quarter of this year.

Rickmers also admitted it was in discussions with lenders in an attempt to get waivers on existing senior loans, and that it had requested an immediate suspension of trading in its units and notes. Trading was in fact suspended on the Singapore Stock Exchange on 16th November.

Then, ten days later, Rickmers denied it had recently sold India Rickmers (ex-Hanjin Newport, a seven-year old panamax container ship for scrapping. This  would have been a record for the youngest box ship scrapping to date. It did, however, admit it was considering the sale of the vessel as part of a potential debt settlement agreement.

Finally, on 12th December, Rickmers confirmed that it had in fact sold the containership for scrap, and that the proceeds would be used to partially repay senior loan facilities extended by Commerzbank. We wait to see if there will be more disposals…

deutsche-welle_goenna-ketels-3Meanwhile, also on 12th December, came the sad news that a worker at a shipbreakers in Chittagong, Bangladesh was killed while working to scrap another container ship, the German Viktoria Wulff. The 10-year-old vessel had been sold for scrap when the owners went bankrupt in August.

It was reported that since 2008 nearly 600 ships have been sold following bankruptcies and financial problems, and that most of these ended up at the breakers yards in India and South Asia. This year alone 83 vessels have been sold to Asian scrappers.

In a late update to this story, on 21st December it was reported that investors had rejected a debt restructuring plan that had been put forward. The manager of the trust that operates Rickmers stated it was continuing to work towards maintaining liquidity and will pursue restructuring plans.