Athens: Mercator Lines (Singapore) has received statutory demands from Cargill regarding purchase contracts that were deferred by the financially troubled carrier.
The bulker owner says it received the notice from Cargill International SA and Cargill Financial Solutions on May 26.
Mercator’s Singapore-listed subsidiary has appointed an independent financial advisor to help assess the company’s financial options, and an investment bank to help it raise equity and strengthen its balance sheet.
The financial advisor and legal representatives are now in negotiations with Cargill and other creditors with regard to Mercator’s restructuring plan.
“Based on the successful implementation of the restructuring plan and anticipated cash flows, the board is of the view that group and company can continue as a going concern for the foreseeable future,” Mercator’s CEO Shalabh Mittal said today in response to an official query from the Singapore Stock Exchange.
“The cash flow and financials of the group has been substantially impacted due to fall in freight rates and deterioration in dry bulk markets,” Mercator said. The company posted a net loss of $125.4m during the financial year 2014, its third consecutive year of losses.