Japanese bulker operator Daiichi Chuo told IHS Maritime on 25 September that rumours it will file for receivership are untrue.
For the first quarter of its financial year, which began on 1 April, Daiichi Chuo booked a JPY7.85 billion (USD63 million) loss. The company has forecasted a JPY13 billion loss for the full fiscal year, much worse than the initial JPY6 billion loss it had predicted, citing the weak freight market as the major factor.
However, Daiichi Chuo’s representative told IHS Maritime, “We know there is talk we are going bankrupt. The market is weak but the rumours are not true. The company’s finances are stable.”
But when asked about market talk that it tried to renegotiate long-term charter hires, the representative declined to comment.
The company had struggled for several years and Mitsui OSK Lines became Daiichi Chuo’s biggest shareholder in 2013. That move resulted in MOL director Masakazu Yakushiji becoming Daiichi Chuo’s president.
Daiichi Chuo’s balance sheet as at 31 July shows it has current assets worth JPY44.7 billion, including JPY20.9 billion in cash.
Its fixed assets, worth JPY80.7 billion, are dominated by ships worth JPY74.4 billion, up from JPY61 billion from the same period last year. IHS Maritime’s Sea-Web data shows the company has taken delivery of three bulkers and a ro-ro cargo ship since September 2014.
The balance sheet shows the company has debts of JPY37.6 billion in its current fiscal year, while long-term liabilities total JPY70.7 billion.
However, with shareholders’ equity at JPY19 billion, gearing is high, at 3.7.
Other ship operators who spoke to IHS Maritime said that so far Daiichi Chuo has paid charter hires on time but they are monitoring the situation.
“The company hasn’t been doing well for some time but we have faith in it as it has honoured its contracts and has MOL’s backing,” said one Japanese ship operator.
Talk now, however, is that MOL is not willing to provide further financial backing and it would take over the running of Daiichi Chuo’s ships if it goes under.
MOL told IHS Maritime it had no information about the matter.
This post was sourced from IHS Maritime 360: View the original article here.