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PIL warns of liquidation risk

SS Teo-led Pacific International Lines (PIL) has detailed how it intends to restructure and carry on business, urging noteholders to avoid pushing for a liquidation of the under pressure liner company.

PIL has already received $112m to tide it over from Heliconia Capital Management, a unit of Singapore’s sovereign wealth fund, Temasek Holdings. In a presentation to creditors and bondholders, PIL revealed Heliconia will shortly come in with another $600m as part of what was described as a comprehensive financing package.

In absence of a comprehensive restructuring, PIL will likely face liquidation

“PIL’s capital structure requires a holistic restructuring solution,” the company conceded, saying the second tranche of financing would provide the necessary capital to repay critical vendors, and recalibrate PIL’s capital structure to sustainable levels.

The financing package from Heliconia will comprise a mix of debt and equity investment.

The company warned noteholders to support the restructuring plan, noting in the presentation: “In absence of a comprehensive restructuring, PIL will likely face liquidation.”

PIL’s financial woes have seen the company sell off a long swathe of assets in the last couple of years. The company’s liner fleet has reduced in size from around 400,000 slots at the start of the year to stand at 290,855 slots today, according to data from Alphaliner.

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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