PIL receives US$600m lifeline from Temasek's unit Heliconia to stay afloat
SINGAPORE-BASED Temasek Holdings has stepped in as a white knight for financially strapped Pacific International Lines (PIL), offering the carrier US$600 million rescue package amid the global pandemic that has dented most firms' financial portfolio
16 November 2020 - 19:06
Temasek's unit Heliconia Capital Management threw the $600 million lifeline to troubled Pacific International Lines (PIL), paving the way for a rescue of the world's 10th-largest container shipping line now facing 'tremendous strain on its liquidity' amid the pandemic-induced recession, reports Singapore's The Straits Times .
Negotiations with Heliconia and PIL's lenders have been completed, and the Singapore-based box ship operator plans to implement the restructuring via a scheme of arrangement. But the deal hinges on majority approval from creditors that are owed US$3.5 billion, sources said.
PIL has earlier sought protection from winding up or enforcement orders from a Singapore court while it embarks on financial restructuring talks with its creditors.
As the pandemic emerged, the shipping giant found its balance sheet under severe strain, causing it to subsequently exit the transpacific trade and sell a number of vessels, including eight of its 2015-built 11,923 TEU vessels, with two picked up by Wan Hai for $93.4 million each, while the remaining six acquired by non-operating containership owner Seaspan.
According to Alphaliner, PIL's fleet capacity significantly shrunk by a quarter this year. As of January 1, the company had a fleet of 119 vessels, equivalent to just under 392,400 TEU. Currently, the fleet stands at 93 ships of 293,300 TEU, a capacity decline of 25 per cent driven mainly by the sale of eight vessels.
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