Hong Kong: Sanko Steamship applied for bankruptcy today becoming the single biggest casualty since the shipping crisis began in 2008. It is the second time Japan’s largest non-listed shipping line has sought bankruptcy protection and like in 1985, then the biggest insolvency in Japanese history, the financial implications for other shipping parties, not least in Hong Kong and Taiwan, are expected to make Korea Line’s 2010 demise look insignificant.
“Since incorporated, we had actively been expanding our spot-contract business mainly for overseas routes. However, we saw a sharp drop in the freight and charter revenue which were the main sources of our revenue because the growth of transportation demands rapidly slowed down due to the global financial crisis in the wake of the Lehman shock in September 2008, which caused a growing gap between supply and demand, and also because it was too late for us to take drastic actions for high-cost charter contracts. As a result, our profitability had rapidly and seriously deteriorated,” Sanko said in a statement today.
Credit researcher Tokyo Shoko Research said Sanko had total debts of 155.8bn yen ($1.95bn).
Of the approximate 185 fleet controlled by Sanko, around 40 are owned, some of which fly the Hong Kong flag. Around 65 ships are chartered from overseas, again a number of Hong Kong owners are implicated here as well as Taiwanese owners, while the rest of the fleet is chartered in from Japanese owners. The largest nations hit by Sanko’s fall are Norway, Greece and Germany however.
Another strand of Hong Kong maritime likely to be hit by Sanko’s huge reorganization are the territory’s shipmanagers who had a sizeable chunk of the line’s tonnage under management. [02/07/12]