- Troubled PIL sells containerships to Seaspan and Wan Hai to raise cash.
- Speculation prompts PIL may soon pull out entirely from liner services.
- Six of PIL’s ships were anchored off Singapore, due to “issues” with its bunker suppliers, start of this year.
- PIL reportedly sold its 60% stake in the South Pacific Islands specialist Pacific Direct Line (PDL).
- PIL’s container manufacturing subsidiary, sold the majority of its dry container manufacturing factories in China for $565m.
- 50-year-old PIL has admitted to “very difficult” trading conditions in recent years.
Singapore-based carrier Pacific International Lines (PIL) is selling ships to raise cash to support its remaining operations, writes Mike Wackett for an article published in The LoadStar.
What troubled PIL?
Singapore-based carrier Pacific International Lines (PIL) withdrew from the transpacific this month. After this shocking withdrawal, to support its remaining operations, PIL is selling ships to raise cash.
Industry speculation prompts that due to slowdown of global growth and sub-economic freight rates on many trades, PIL may soon pull out entirely from liner services.
Ship sale for cash
PIL owns 89 containerships, valued at $1.6bn, with a scrap value of $500m. According to Alphaliner, the following deals took place:
Taiwanese carrier Wan Hai
Taiwanese carrier Wan Hai has purchased 11,923 teu sister ships Kota Panjang and Kota Perwira from PIL for $93.4m each.
The two high-spec vessels, which feature 1,400 reefer plugs, are part of a series of 12 ships ordered by PIL in 2015 and financed by Chinese banks.
Seaspan
Four other sister ships were acquired by containership owner Seaspan, in a $367m cash deal announced by the ship lessor on 25 February. This deal came with attached long-term charters.
Transpacific exit
Regarding its decision to exit the transpacific, PIL said “it was part of a wider strategic review of its business.” It added that it would henceforth focus on its north-south trades such as Africa, the Middle East, India subcontinent, Latin America and Oceania.
Bunker supplier issues
PIL had a difficult start this year, when six of its ships were anchored off Singapore, due to “issues” with its bunker suppliers.
Non-payment reports denied
The company denied reports that the vessels were being held under arrest for non-payment of bunker bills. It strongly refuted claims it had fallen behind with charter hire payments.
However, the rumours caused considerable unease in the market, with some forwarders reportedly instructed to stop booking with PIL.
Sale of share
Alphaliner said, PIL had also reportedly sold its 60% stake in the South Pacific Islands specialist Pacific Direct Line (PDL) to the owners of Neptune Pacific Line. This information has not been confirmed by either party.
PIL’s container manufacturing subsidiary, Singamas, sold the majority of its dry container manufacturing factories in China to Cosco last year for $565m.
Difficult trading conditions
PIL is 50-year-old, tenth-biggest container carrier, in terms of capacity, with 387,000 teu and a 1.6% share of the market.
PIL has admitted to “very difficult” trading conditions in recent years.
It also operates a small fleet of dry cargo vessels and bulkers. PIL retains a close partnership with Cosco, with slot-sharing cooperations in West and East Africa trades. The Chinese state-owned carrier is seen by analysts as its “most likely suitor”.
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Source: The LoadStar
