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Western Bulk’s survival hangs in the balance

Having completed the sale of its chartering unit, Western Bulk (to be renamed Bulk Invest) is looking for ways to raise cash to solve its liquidity problems, but its major shareholder has poured cold water on the possibility of a rights issue.

“The company will initiate dialogue with its creditors to explore and pursue potential solutions,” the Oslo-listed company said today. “If no acceptable solution to the company with the remaining creditors is achieved, the basis of the company’s continued operations will be reassessed.”

One option, first mooted in November 2015, is to carry out a rights offering but this idea has been vetoed by Kistefos, which controls around 60.4% of Bulk Invest’s shares and is controlled by the company’s chairman Christen Sveaas.

The Bulk Invest board members who are not affiliated with Kistefos will “consider the legal position of the subscription and guarantee undertaking in conjunction with any rights offering” in the interim, the company said.

Bulk Invest has so far received $10m of Western Bulk Chartering’s (WBC) $16m cash consideration, with the rest due to be received on March 2.

The business was valued at some $47m, but as part of the transaction Kistefos will assume responsibility for WBC’s treasury bonds and its outstanding debt of NOK271m ($31.36m) under its NOK300m ($34.71m) senior unsecured bond.

Holly Birkett

Holly is Splash's Online Editor and correspondent for the UK and Mediterranean. She has been a maritime journalist since 2010, and has written for and edited several trade publications. She is currently studying for membership of the Institute of Chartered Shipbrokers. In 2013, Holly won the Seahorse Club's Social Media Journalist of the Year award. She is currently based in London.
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