Temasek offers $600-million rescue to Singapore shipping giant

Temasek Holdings Chief Executive Officer Ho Ching speaks during the ASEAN-Australia Special Summit 2018 held in Sydney, Australia.

Singapore-based Temasek Holdings Inc. stepped in as a white knight for financially-strapped Pacific International Lines (PIL), offering the latter worth $600 million of rescue package amid the global pandemic that has dented most firms’ financial portfolio.

According to a report by The Straits Times and was picked up by The World News, the offer was made through Temasek’s subsidiary Heliconia Capital Management. Temasek is one of Singapore’s largest investment firms.

It can be learned that PIL earlier this week sought protection from winding up or enforcement orders from a Singapore court while it embarks on financial restructuring talks with its creditors.

The court gave the company four months of the moratorium.

Negotiations between Heliconia and PIL are already completed, with the latter looking to implement the restructuring via a series of arrangements. However, the deal was said to be hinging on majority approval from creditors which the company owed $3.5 billion.

“The restructuring plan contemplates the provision of fresh financing by the investor (or entities managed and controlled by it) as well as a re-profiling of the company’s debts by way of a scheme of arrangement to be proposed by the company to its creditors, as well as bilateral agreements with certain of the company’s creditors,” PIL told the stock exchange.

PIL started the year with a difficult start when six of its ships were anchored off Singapore amid issues with bunker suppliers.

The company, however, thumbed down reports that the vessels were being held under arrest for non-payment of bunker bills and strongly refuted claims it had fallen behind with charter hire payments.

As the pandemic emerged, the shipping giant found its balance sheet under severe strain, causing it to subsequently exit the transpacific trade and sell a number of vessels, including eight of its 2015-built 11,923 teu vessels, with two picked up by Wan Hai for $93.4m each, while the remaining six acquired by non-operating containership owner Seaspan.

According to Alphaliner, PIL’s fleet capacity significantly shrunk by a quarter this year.

“The company recorded a fleet of 119 vessels on 1 January, equivalent to just under 392,400. Today it stands at 93 ships of 293,300 teu, a capacity decline of 25% driven mainly by the sale of eight vessels,” it was quoted as saying.

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