PIL secures cashflow cover as fleet shrinks

Pacific International Lines (PIL) has secured interim funds from an affiliate of the Singaporean government in order to cover its immediate cashflow issues.

PIL received $112 million from Heliconia Capital Management, linked to the government’s Temasek Holdings, to meet urgent operational requirements while talks continue to reprofile its debt load.

Despite indications of strong second quarter results for carriers, PIL said COVID-19 continued to pose significant challenges to the industry, with a sharp decline in global trade and increased costs.

The firm said it would have to closely manage expenditure and continue efforts to conserve cash and manage its asset cost base across the different trade lanes.

PIL has divested significant assets in the past eighteen months and has seen its fleet shrink 20% since January 2019 to 360,000 teu. The biggest shrinkage has come in its VLCS fleet, which has been halved from 143,000 teu to just 71,000 teu.

PIL’s fleet under 4,000 teu has also been reduced by 10% to just under 160,000 teu, although its LCS and Panamax segments remain unchanged from eighteen months ago.

The company raised $550 M in March with the sale of six 11,923 teu vessels to Seaspan and Wan Hai. Over the past 18 months, it has also refinanced several vessels, including through lease or long-term charter agreements with third party owners.

Talks continue with lenders over efforts to re-organise $3.86 BN in debt, of which $1.3 BN is short term.

The rescue plan has allowed PIL to lift encumbrances on several ships, which have all resumed trading. During the past three months, it has also restructured several of its Far East – Africa services with new partnerships.

Source: Alphaliner

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