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Blystad seeks to shore up finances at Songa Container

Arne Blystad’s Songa Container is tapping shareholders and bondholders for more equity for the second time in just over two months.

Despite $5m of new equity being pumped into the company in March, Songa Container has warned that due to the Covid-19 pandemic, it risked breaching the terms of a loan agreement unless equity was further strengthened.

Shareholders are being asked to raise another $5m, either in the form of equity or as a shareholder loan.

Bondholders, meanwhile, have been asked to allow up to two quarterly interest payments to be made through the issuance of bonds while the maturity of the bonds is expected to be extended by 18 months to June 14, 2023.

“It is the company’s clear opinion that this represents a fair and well-balanced proposal that protects the interests of all and gives the company time to find an adequate solution that allows a full repayment to the bondholders as soon as the underlying market allows,” a letter to bondholders stated.

Songa Container was formed three years ago and has 15 feeder ships on its books. Cost overruns for seriously delayed scrubber retrofits have hurt the company this year.

The company said it is not expecting any notable upswing in container shipping fortunes through to 2022.

Shoring up his finances, Blystad has recently sold shares worth NOK30.3m ($3.06m) in Oslo-based Maritime & Merchant Bank, where he is a board member.

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Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.
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