Recently Asian giant China Cosco Shipping Corporation has agreed to buy Orient Overseas International of Hong Kong. According to Alphaliner, now one of the leading companies in container shipping industry is going to take over the Singapore-based Pacific International Lines (PIL).
According to analyst, there are only four self-supporting carriers, with their global share from 1,5% to 2,8%. PIL got percentage in 1,5% in Chinese-American import while the huge container shipping consolidation was starting. Last year the share was 0,6% down. Company’s market volume has been increased by 67% year-over-year and now it is 58 407 TEU.
Yang Ming, Hyundai Merchant Marine и Zim Integrated Shipping Services, the rest of independent carriers, are connected to government. It means they are considered as unprepossessing goals for international conglomerates and could excite interest of mother countries of Taiwan, Korea and Israel only.
The financial difficulties can restrain the potential acquiring companies to take over these carriers. The Yang Ming is drawn into restructuring of debt obligations sponsoring by the Taipei government. The same recapitalization was affected on HMM and Zim which discharged the great percentage to creditors in 2014 and 2016.
In such a way, PIL has the edge, moreover being in deal with Africa what can be the most winning feature for buyers. The truth is that carriers want to join to high developing Africa’s market, Alphaliner suggests.
PIL forced to collect cash from asset sales and ensure security deposit to supply banking credit with repaying active debt.
This year PIL has realized two bulkers, which were constructed in 2012, and gained as low as between $26 and 28 million apiece. It caused a huge harm and PIL engaged its stake in Singamas, registered in Hong Kong the container producer with 41,1% of PIL’s general rate. The company was meant to get around $180 million.
PIL assures that it will sell Singamas’ stock of shares during 1 year and 8 months for as a minimum $180 million or at an affordable price for creditors.
Being under Chang Teo’s management company doesn’t tend towards making financial reviews, however it published a such one in 2016 which testified a deep financial collapse because of “very low freight rates and a one-off bunker hedging loss”.
PIL’s all-out credit to liquidate is about $2,6 billion, Alphaliner said.
Among other matters Singapore-based business is collaborating with Cosco. The partnership has started a few years ago and has been fueled by shipping in Western and Eastern Africa. At the first of 2017 PIL signed a contract about joint use of vessel with Cosco and Wan Hai on the trans-Pacific traffic.
This year the operator is going to take under control one well-funded 11,8 ths. capacity boxship. Moreover, it is thought PIL to be like Cosco’s “subsidiary” in order to put to work some other trans-Pacific oriented vessels. Also it is expected to approach a US East Coast trade in 2018.
