PortandTerminal.com, June 22, 2020
OSLO – Norwegian container ship owner MPC must restructure its debt and raise new funds, to tackle a sector-wide downturn arising from the Covid-19 pandemic.
The Oslo-listed container ship company MPC Container Ships is warning that it could go bankrupt and will face a serious cash crunch as early as July, next month.
The company was formed just 3 years ago. In that time they have built up a fleet of 68 feeder vessels with capacities of 1,000 to 3,000 TEU each with a total fleet capacity of 134,474 TEU.
To survive, the company says that it is looking to amend the terms of its $200 million bond issue and collect fresh cash in order to mitigate the negative impact from COVID-19 on the company’s liquidity.
The management believes the cash inflow would create a stable runway for at least the next 18 months, thus enabling the issuer to preserve its asset values.
MPC warns that if its debt cannot be restructured it may have to start selling vessels or even file for bankruptcy.
MPC is not the first container shipping firm to warn of the effects of the coronavirus on the sector. Singapore’s Pacific International Lines (PIL) in late May said that it had begun talks with 15 lenders to restructure debt. It managed to defer principal and interest payments as well as secure waivers from any enforcement action by lenders until the end of this year. PIL is also in talks with Singapore’s state-owned investor Temasek over a potential investment.
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