Berlian Laju May Present Debt-Restructuring Plan in May
By Kyunghee Park and Andrea Tan – Mar 15, 2012 5:48 AM ET
PT Berlian Laju Tanker (BLTA), the Indonesian ship operator under court protection, may present a plan to creditors in early May as it seeks to restructure debts and leases.
The company is in “active negotiations” with shipowners and has begun talks with lenders led by DNB ASA, Cosimo Borrelli, vice president of restructuring, said by phone yesterday. He declined to name lessors or to say what the company was seeking. “We’re not expecting a difficult or long- winded process.”
The Jakarta-based company has built up $2.4 billion of group debt, according to a March 12 Singapore court filing, after paying $850 million for Chembulk Tankers LLC in 2007 and suffering from a jump in fuel prices. The operator has about 20 leased-in vessels, which it signed for between 2005 and 2008 when rates were at a peak, Borrelli said, without elaboration.
Fees for carrying cargos are now “too far away” from those the company agreed to pay in leases, he said. He didn’t say which types of vessels it had leased in.
Berlian Laju is still operating, Borrelli said. The company had a fleet of 72 vessels as of December, of which 50 are owned by subsidiaries and mortgaged to banks, according to the court documents. Other lenders include ING Groep NV, NIBC Bank NV, Nordea Bank AB (NDA), and Standard Chartered Plc, the papers show. The company owns ships that haul chemical products, gas and oil.
Berlian Laju has ceased payment of loans, bonds and finance leases, it said in a Jan. 26 statement. It has principal payments of about $418 million due this year, it said. The company had $105.6 million of cash at the end of September, according to a Nov. 15 financial statement.
“The free cash available to the company is less than that today,” Borrelli said, without elaboration.
The carrier halted its shares from trading in Jakarta and Singapore in January. It was downgraded two levels to ‘D’ by Standard & Poor’s Ratings Services on Feb. 10. Fitch Ratings Ltd. today cut its rating to ‘RD’ from ‘C.’ This comes after Fitch lowered it on Jan. 27 from ‘CCC.’
Chembulk New York Pte and 12 other Berlian units yesterday sought protection from creditors in a Manhattan court under Chapter 15 of the bankruptcy code, which puts on hold claims while a company reorganizes outside the U.S.
A day earlier, the shipping group won an order from Singapore’s High Court preventing creditors from legal proceedings and seizing vessels for three months. Its lawyers had sought an urgent hearing on March 12, saying ship arrests in the U.S., Pakistan, Bangladesh and South Africa had had an “adverse impact” on business, according to court filings.
The price of 380 Centistoke Bunker Fuel, used by ships, has jumped 62 percent in the past two years in Singapore trading, hitting earnings across the industry.
Tokyo-based Sanko Steamship Co. this month asked shipowners, shipyards and lenders for a debt standstill. Torm A/S (TORM), a Danish ship operator, has deferred debt repayments four times since December.