Mon 09/07/2020 08:11 AM
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At least one major lender to Singapore container shipping group Pacific International Lines (Private) Ltd (PIL) is sounding the market to potentially sell down its unsecured exposure to the company, said two sources familiar with the matter.

The bank has sounded out other lenders to the company and the wider market, the sources said, with one source further detailing that this was due to a “shift in focus” of the bank’s lending strategy.

As of 1H’19, PIL had current liabilities of $2.18 billion in 1H’19, consisting of approximately $1.1 billion in loans and $480.9 million owed to trade creditors, amongst other liabilities, as reported. This is against cash and cash equivalents of $154.4 million as at June 30, 2019.

Non-current liabilities in 1H’19 were approximately $2.76 billion, comprising $1.53 billion owed to lease creditors and $755.1 million of loans, amongst other liabilities.

PIL has since sold six of its vessels to its peers at an undisclosed sum in Q1’20, as a part of its strategy to exit from the Transpacific market and to shift focus on its North-South trade route, as reported. The Lodestar, citing Alphaliner, reported on details on the consideration of the sale of the vessels.

PIL and its lenders have agreed to a standstill agreement to defer principal and interest payments until Dec. 31, 2020, as reported, for which the company has received in-principle approval from holders of 97.6% of the total debt to defer principal and interest payments until the earlier of Dec. 31, 2020 or until a formal debt reprofiling agreement is entered into.

As reported, PIL stated it has obtained interim financing of up to $112 million from prospective white-knight investor Heliconia Capital Management Pte Ltd, a wholly-owned subsidiary of Temasek Holdings, which is only to be used to meet “urgent operational requirements” and that its negotiations on a potential investment by Heliconia are “progressing well” following a Reorg report that such funding had been tied up.

PIL has also begun preliminary consent solicitation talks with the trustee of its outstanding S$60 million ($43.3 million) 8.5% notes due November, as reported. PIL previously cautioned a likely default event in relation to its notes due Nov. 2020.

PIL declined to comment.

-- Serla Rusli, Nidhi Pandurangi
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