PIL lined up a potential white knight

Issued on 1 Jun 20

SINGAPORE-BASED Pacific International Lines is negotiating with Temasek Holdings a potential investment aimed at keeping the debt-ridden container ship operator from

shutting down.

In a statement, PIL said that Temasek's Heliconia Capital Management was lined up as a potential white knight in a restructuring package that would also involve a deal with its top 15 lenders to freeze loan payments and interest covering nearly 98 per cent of the carrier's debt until the end of the year. Other Temasek entities are among PIL's lenders.

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PIL, which owns around 65 ships and leases another 45, is the latest ocean carrier to ask for state backing as the COVID-19 upends trade flows. As of June 2019 PIL it owed a total of $1.89 billion in loans & bonds, and the carrier needs cash to pay ship charter-hire payments that run into the tens of millions of dollars.

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The company warned in the statement that a total of $60 million in bond payments mature in November and that it faces default without financial help.

PIL's 41 per cent stake in Hong Kong-listed container manufacturer Singamas has been pledged to nonbank lenders as collateral for loans since 2018.

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