Japanese Dry bulk Giant Misses Rehabilitation Deadline

by Ship & Bunker News Team
Thursday February 4, 2016

Following a disappointing bid to secure a sponsor as part of its bankruptcy strategy, Daiichi Chuo Kisen Kaisha will not submit a rehabilitation plan to the Tokyo District Court as originally scheduled and is now trying to raise funds from shipowners and other creditors, media reports.

The court had given the Japanese bulker operator until February 3 to submit a rehabilitation plan, whereby Daiichi Chuo would settle debts totalling about $1 billion to 596 creditors, including Hyundai Merchant Marine, Navios, Vale, Rio Tinto Shipping, and Pan Ocean.

The company reportedly received only two or three offers for sponsorship during a January 5 bidding, the amounts and/or management strategies of which would supposedly not meet creditors' expectations.

Although it is uncommon for creditors to provide funds in civil rehabilitation proceedings, Daiichi Chuo has begun asking shipowners, shipbuilders and other sources in the Shikoku region for investments and will draft a new plan outlining how much debt it will be able to repay.

It is said that the company hopes to raise several billion yen from over 10 trading partners and will submit its plan in "a month or two," according to Nikkei Asian Review.

Daiichi Chuo, which is the fifth largest shipping company in Japan and controls 185 vessels, did not reverse its course of fleet building until 2012, well after market conditions had deteriorated and when it became clear that Chinese demand for its services was not returning.

Ship & Bunker News Team
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