PIL confirms bailout talks with Temasek

Singaporean liner operator Pacific International Lines (PIL) confirmed on 26 May 2020 that it had entered into an exclusivity agreement with Temasek affiliate Heliconia Capital Management, for a period of six months, in relation to a potential investment.

The line operator, which is being advised by Evercore Asia on its strategic capital raising alternatives, is currently in preliminary negotiations with Heliconia.

The privately owned PIL is controlled by the family of the company’s managing director, Teo Siong Seng. The liner operator is also the largest shareholder of container manufacturer Singamas.

In the last year, PIL had made progress towards rationalising its service offerings and reducing asset costs. However, despite the company’s best efforts, the persistent Covid-19 pandemic had caused the situation to worsen over the past month.

Due to the situation, the company had commenced discussions with 15 of its financial lenders with a view to concluding a formal agreement concerning a debt re-proofing plan with these stakeholders.

PIL is understood to have fallen behind on charter hire payments to its tonnage providers, which include Japanese ship owners. In recent months, PIL acted to improve its balance sheet, including exiting the Transpacific trade, selling a subsidiary, Pacific Direct Line, and a number of ships. In April, PIL issued a statement to refute rumours that the company was facing bankruptcy.

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