International Shipholding Files for Chapter 11 Bankruptcy Relief

by Ship & Bunker News Team
Tuesday August 2, 2016

The International Shipholding Corporation (ISH) Sunday announced that it was voluntarily filing for Chapter 11 bankruptcy protection.

However, the company says that, while it is facing challenges with its debt and capital structure, its core business segments are performing "satisfactorily."

As the Wall Street Journal reports, the company, which is noted to have lost $8.4 million in 2016's first quarter, is not bringing in the money required to comply with lender requirements.

"Today, we took a critical step toward right- sizing the Company's balance sheet. While the company is facing challenges with its debt and capital structure, we believe our core business segments are performing satisfactorily," said Erik L. Johnsen, President and CEO of ISH.

"During the Chapter 11 process we look forward to continuing to provide our customers the same high quality, reliable shipping services they've come to consistently expect from us."

ISH says it has filed a series of first-day motions with the U.S. Bankruptcy Court in order for the company to continue to operate its day to day business, and has arranged for $16 million in bankruptcy financing to support its restructuring efforts.

The first day motions include a request for the court to approve, among other things, the payment of employee wages, salaries, and benefits during the Chapter 11 process, as well as payments to a number of critical vendors and foreign vendors.

ISH is noted to have been selling off assets and businesses, such as its dry bulk unit, in an effort focus on its most profitable lines, reporting that it had managed to reduce its funded debt by $117 million by the end of first quarter 2016 from $243 million at the end of 2014.

In February, Precious Shipping Public Company Limited (PSL) CEO, Khalid Hashim, warned that there could be wave of bankruptcies in the dry bulk sector as owners find themselves unable to secure financial backing due to banks pulling back on uncertain loans.