Singapore-listed dry bulk shipping company Mercator Lines is in talks with creditors over its restructuring process, including a statutory demand from trading company Cargill on certain deferred purchase contracts.
According to its filing to the Singapore Exchange, Mercator Lines cited that the company has received statutory demands from Cargill International and Cargill Financial Solutions on 26 May in relation to certain deferred purchase contracts.
Mercator Lines has appointed an independent financial adviser (IFA) to assess the financial options and establish various options. In addition, the company has also appointed an investment bank (IB) to help it raise equity to strengthen its financial position.
“The board and management are working closely with IFA, IB, legal advisers, and creditors to establish a refinancing, recapitalisation, and restructuring plan. The group, together with the IFA, IB and its legal advisers, are currently in negotiations with creditors [including Cargill] and potential investors in relation to the restructuring plan,” Mercator Lines said in its filing.
Mercator Lines posted a net loss of USD125.3 million for its full financial year that ended on 31 March 2015, widening its loss from USD23 million in 2014. The loss also marked the third consecutive year of losses owing to lacklustre dry bulk market demand.