Asia/Pacific News
Chemical Shipper to Restructure Debt, Shift Focus
Under pressure from weak freight rates and higher shipping fuel costs, chemical shipper PT Berlian Laju Tanker (Berlian Laju) [BLTA:IJ] of Indonesia is trying to restructure its $1.9 billion debt by the end of the year, Reuters reports.
Berlian Laju's chairman, Hadi Surya, said the company is switching its focus to niche liquid chemical and gas transport.
The company defaulted on some debt instruments earlier this year, and its market value has fallen 90 percent, to $236 million, since early 2008.
"We want the process to be faster," Surya said.
"We hope all things can be sorted out by the end of the year. Our main focus is for the survival of Berlian Laju and to overcome the crisis."
At the peak of the shipping market in 2007, Berlian Laju acquired Chembulk for $850 million with the help of loans.
A new rescue deal would give banks control of the company, extend repayments on the debt, and provide funding to let the company continue to try to improve.
However, Surya said it's possible the company will have to go into liquidation to settle its debts.
"We have to accept the reality," Surya said.
"I can only pray and this is not the time to blame my directors for the over-expansion in 2008.
"We always have risks in business."
Belian Laju is just one of a number of companies forced to restructure because of low returns in the shipping industry.
Danish shipping firm TOM A/S [NASDAQ:TRMD] recently signed a restructuring agreement with its banks and time charter partners, deferring debt and providing more liquidity.
