It has emerged that funds linked to Singapore’s sovereign wealth fund Temasek Holdings have come to the rescue of the island republic’s top containerline.
Pacific International Lines (PIL), the 10th largest containerline in the world, has been under financial pressure for the last couple of years, forcing it to sell off assets. Alphaliner has managed to unearth in its latest weekly report details of PIL receiving previously unreported loans from Temasek Holdings-linked SeaTown Holdings last year, for which the carrier had to pledge its shares in the Hong Kong-listed container manufacturer Singamas as security.
According to disclosures to the Hong Kong stock exchange, the fund linked to Temasek currently holds an indirect 20.56% stake in Singamas through shares held as collateral for the loan to PIL.
Officials from the sovereign wealth fund stressed to Splash however that while wholly-owned by Temasek, SeaTown Holdings operates independently from Temasek, with their own board and management team.
“Temasek does not direct their business and operations,” a Temasek official pointed out.
PIL is a private company that rarely releases its financial results. It is run by SS Teo, a prominent name in Singapore shipping circles and a former nominated member of parliament.
Temasek was the lead shareholder in APL before selling the containerline to CMA CGM three years ago at which point Singapore was left with just one large carrier left, PIL.
Earlier this month, Singamas offloaded five of its Chinese box manufacturing facilities to Cosco for $565m.
In a report from earlier this month, Alphaliner suggested PIL could be sold to Cosco. PIL executives have repeatedly stressed the company is not for sale however.
PIL has ceased to publish financial results for the group’s holding company since the end of 2018, even though the privately-owned group had previously released its results in 2017 and the first half of 2018. According to its last publicly available financial figures, PIL recorded a net loss of $141m in the first six months of 2018.
“More worrisome for PIL is the total debt outstanding of $3.46bn as at June 2018, of which $1.08bn was short term debt payable within 12 months,” Alphaliner observed.