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Indonesia Shipping Group Berlian Laju Defaults on Debt
February 28, 2012

The Jakarta headquarters of PT Berlian Laju Tanker, Indonesia’s largest oil and gas shipping group. (Reuters Photo) The Jakarta headquarters of PT Berlian Laju Tanker, Indonesia’s largest oil and gas shipping group. (Reuters Photo)
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Serigala-Berbulu-Domba
2:15pm Feb 28, 2012

dori

What exactly is your point?

22roles
1:18pm Feb 28, 2012

that depends on who your creditors are and how you structured those debts that chain your neck for next few years if not decades before signing dotted lines...

dori
10:52am Feb 28, 2012

default on debt is a normal in business, the most important thing that we know how to maintain a debt, about how much money that we could spend in each transaction so will not loss much money

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Jakarta/Singapore. PT Berlian Laju Tanker, Indonesia’s largest oil and gas shipping group, said it had defaulted on six of its debt instruments, both dollar-denominated debt and local currency bonds, due this month.

Berlian Laju is the latest shipping company to buckle in the face of a weak global market.

Late last month, it said it was freezing payments on its debt of $2 billion while it talked to creditors about restructuring its operations and finances.

Berlian Laju said on Monday that it had made no payment to six of its debt instruments, including two worth a total of $44.1 million due in Feb. 9 on its $125 million guaranteed convertible bond.

“We are still working with our financial advisor and will provide an update with respect to the company’s restructuring of its indebtedness in due course,” Berlian Laju said.

The oil tanker freight market is struggling through a slump brought about by the global downturn and weak freight rates on the one hand and higher shipping fuel costs on the other.

However, sources have said Berlian Laju’s problems were compounded by high debts following the expansion of its chemical tanker business at the peak of the shipping market in 2007.

Berlian Laju’s total outstanding debt was $1.9 billion as of the company’s September financial statement.

About $418 million in scheduled principal payments are due this financial year.

This month, Singapore-listed business trust First Ship Lease Trust said some subsidiaries of Berlian Laju had defaulted on their payment obligations for three Singapore-flagged tankers.

Analysts expect 2012 will be another hard year for the shipping industry as overcapacity continues to depress freight rates. 

General Maritime Corp, a crude oil and refined petroleum products shipper based in New York, filed for Chapter 11 bankruptcy protection in November.

Berlian Laju shares remain suspended from trading in Singapore and Jakarta.

The biggest creditors for a $685 million loan facility to Berlian Laju are DNB Asia with $200 million, Nordea Bank AB with $120 million and Standard Chartered Bank with $115 million, Thomson Reuters data shows.

Others include BNP Paribas, ING Bank NV and SEB.   

Reuters