Bloomberg News

Sanko Steamship Asks Creditors to Defer Payments After Dry-Bulk Rates Fall

March 12, 2012

(Corrects fleet types in last paragraph.)

Sanko Steamship Co. (9112), the Japanese operator of about 200 ships, asked creditors to defer payments after rates fell on global overcapacity and fuel prices surged.

The closely held company will continue operating and paying running costs, such as fuel bills, while working on an out-of- court restructuring plan, Yasunao Goto, a spokesman, said by phone today. He declined to comment on the size of the Tokyo- based company’s debts or to name its creditors.

The shipping line has asked shipowners, shipyards and lenders for a standstill agreement and it intends to eventually pay all debts, it said in a March 9 statement. The talks come after the Baltic Dry Index (BDIY), a benchmark for commodity-shipping costs, plunged 47 percent in a year amid an expanding fleet and slowing demand.

“The market has been tough,” Goto said. “It was tougher than we thought and it has just stayed there.”

Liabilities totaled 55.4 billion yen ($673 million) as of the end of March 2011, according to Tokyo Shoko Research. Oil refiner Showa Shell Sekiyu K.K. (5002) may be the biggest creditor, the research company said, citing July 2011 data. Showa Shell, an affiliate of Royal Dutch Shell Plc (RDSA), declined to comment.

The price of 380 Centistoke Bunker Fuel, used by ships, has averaged $731.96 a ton in Singapore trading this year, 25 percent more than a year earlier, according to data compiled by Bloomberg.

Sanko, which was founded in 1934, had 195 ships as of Jan. 1, including dry-bulk carriers, tankers and offshore vessels, according to its website.

To contact the reporter on this story: Chris Cooper in Tokyo at ccooper1@bloomberg.net; Kiyotaka Matsuda in Tokyo at kmatsuda@bloomberg.net

To contact the editor responsible for this story: Neil Denslow at ndenslow@bloomberg.net


Tim Cook's Reboot
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus