SINGAPORE Rickmers Maritime (RIMT.SI), a Singapore-listed trust that operates container ships, said it would be wound up as it has been unable to reach an agreement with its lenders to restructure debt or raise new equity.
Struggling in the wake of a global shipping downturn, Rickmers joins other Singapore-listed companies from the offshore and marine sectors that have been grappling with debt in the last year.
Singapore banks, which were caught off-guard by the collapse of oilfield services company Swiber Holdings (SWBR.SI) last year, have taken a hit as the firms restructure their loans.
Rickmers said in a statement on Wednesday that it could not continue as a "going concern" due to its failure to meet some debt obligations and various breaches in loan covenants. It last year flagged the risk that could happen.
"In light of the aggravated illiquidity and lack of new investors ... it is impracticable to continue the trust," Rickmers said.
Rickmers, whose major lenders include HSH Nordbank and DBS Group Holdings Ltd (DBSM.SI), had medium-term notes of S$100 million ($71 million) and secured bank loans of $270.8 million as of the end of last year. Its bondholders rejected a debt restructuring plan in December.
DBS said it had made "suitable provisions" for Rickmers, while HSH did not immediately respond to a request for comment.
Trading in Rickmers units, valued at $16.3 million, has been suspended since November. The company said unitholders were "highly unlikely" to recover any of their investments.
Rickmers said it was in advanced discussions with a potential buyer for its assets which may allow it to distribute some cash upfront to unsecured creditors.
The firm says on its website that it owns 14 container ships with a total capacity of 57,100 20-foot equivalent units.
Rickmers said the business operations of its vessels would remain unaffected by the winding up process and that the trust would continue to meet its ongoing charter party obligations.
"They are quite a small player in the overall shipping industry, so the impact will be very limited," said Joel Ng, an analyst at KGI Fraser Securities.
($1 = 1.4018 Singapore dollars)
(Reporting by Aradhana Aravindan; Additional reporting by Anshuman Daga; Editing by Stephen Coates and Joseph Radford)