Western Bulk Chartering Sale Challenged by Bulk Invest Creditors

Bulk Invest says some of its creditors are pushing for a reversal of the recent sale of its subsidiary, Western Bulk Chartering.

Bulk Invest ASA (Bulk Invest) says the recent sale of its subsidiary, Western Bulk Chartering AS (Western Bulk Chartering), to Kistefos Equity Operations AS (Kistefos) is being challenged by some of its main creditors, who have requested a legal injunction with the aim of reversing the sale.

As Ship & Bunker previously reported, Bulk Invest (then known as Western Bulk ASA) began the sale of its subsidiary, Western Bulk Chartering, to Kistefosin early February, and has received the first cash payment of $10 million from Kistefos, with the rest of the cash purchase price, $6 million, to be paid March 2, 2016.

A group of Japanese ship owners are said to assert that Western Bulk Chartering was worth more than it was sold for, leaving Bulk Invest in a worse position than before the sale.

The ship owners, who are said to have $172 million in long-term charters in Bulk Invest, have called the transaction "an illegal payment of dividend" and "unfair treatment of Western Bulk's creditors."

"The Company believes that the alleged claims are completely unfounded and will defend itself against them," stated Bulk Invest.

"At the same time, the Company is continuing its restructuring efforts, and is in an on-going dialogue with its main creditors."

Jens Ismar, CEO of Bulk Invest, who has expressed confusion over the opposition to the sale, has said that "the transaction is conducted in a proper manner, and I do not understand on what basis this is done."

The unnamed shipowners are said to be prepared to use all required legal means to reverse the sale of Western Bulk Chartering, even if that means Bulk Invest is driven to bankruptcy.

"By bankrupting they would have the opportunity to fully scrutinize the transaction and if the deal was done below as market as we suggest, they would have the opportunity to demand this vindicated," said Kristian Linhartsen, a lawyer from the Oslo-based firm Kyllingstad Kleveland Advokatfirma DA  (Kyllingstad Kleveland), who is representing the Japanese ship owners.

Linhartsen says there will be a hearing within the next couple of weeks to decide on both the freezing of Kistefos’s shares in Western Bulk Chartering and the sale reversal.

In early February, Bulk Invest's (then Western Bulk) board announced plans to proceed with the sale according to an "accelerated sales process."