Dry Bulk Player Daiichi Chuo Kisen Kaisha Files For Bankruptcy With $1 Billion Debts

The company's shares will be delisted at the end of October.

Japanese dry bulk shipping firm Daiichi Chuo Kisen Kaisha has filed for bankruptcy protection with roughly ¥120 billion ($1 billion) in liabilities, Bloomberg reports. 

The firm's wholly owned subsidiary Star Bulk Carrier Co. is understood to have also filed for bankruptcy protection with additional debts of around ¥57 billion ($476 million).

As Ship & Bunker previously reported, rumours of bankruptcy emerged last week, though at the time a representative of the company denied that it would be entering receivership. 

The company had purportedly been growing its fleet despite worsening market conditions after 2008, and didn't begin downsizing the number of ships until 2012 when it became clear that Chinese demand wasn't returning. 

"We reduced the fleet pretty much as planned after I became president," President Masakazu Yakushiji reportedly told journalists in Tokyo following the bankruptcy announcement. 

"However, the market turned a lot worse than we expected." 

The company has reportedly seen four continuous years of losses.

"We didn't expect the market to be bad for four years," Yakushiji said.

The company's shares are expected to be delisted from the Tokyo Stock Exchange on October 30, 2015.  

According to Yasumi Kudo, chairman of The Japanese Shipowners' Association, the country's other major shipping lines will not be affected operationally, though reports note that Mitsui O.S.K. Lines Ltd. (MOL), who is Daiichi Chuo's largest shareholder, will book a ¥25 billion ($208.7 million) loss in the second quarter of the fiscal year. 

"The impact of the extraordinary loss on the business performance for the full fiscal year is currently under close examination," MOL said in separate reports. 

Earlier this week, Ship & Bunker had also reported that MOL appeared to be unwilling to provide further capital to Daiichi Chuo beyond what it had already given.