Taiwan Maritime Transportation Co Ltd (TMT, 台灣海陸運輸), a bulk shipper and energy transportation firm, has led its 23 single-ship companies to file for Chapter 11 bankruptcy protection in the US federal court in Houston, the company said yesterday.
The company said seeking court assistance would help it proceed with its financial restructuring, but several banks in Taiwan — which are creditors of the US-based shipper — have seized the company’s ships as collateral, which could raise uncertainties about the company’s fate.
Chapter 11 filing places a company under temporary court administration, meaning it does not have pay off all its debts at once, allowing it to generate new revenue during its restructuring.
“By using the Chapter 11 provisions, there is now a breathing space of 18 months to restructure the company,” TMT chairman Nobu Su (蘇信吉) said in a statement the Taipei Times received yesterday.
TMT’s decision follows that of several other global shipping companies, such as General Maritime Corp and Overseas Shipholding Group, the statement said.
These companies are also under restructuring to get over impact of the global financial crisis in 2008, which has dragged down freight rates. TMT said it was no exception following the global economic slowdown of recent years.
TMT has recruited restructuring experts, including AlixPartners and Bracewell and Giuliani, to offer advice to TMT, Su said.
However, Taiwanese banks’ seizures of the company’s ships have blocked all chances of the company generating income, making it difficult to pay banks, wages to crew and to buy fuel, he said.
In the statement, Su called on assistance from the government to mediate the process of debt reorganization between TMT and its major creditors in Taiwan, adding that he met Ministry of Economic Affairs representatives earlier this week to discuss the matter.
For its major creditors in Taiwan, TMT’s bankruptcy filing could cause a spike in the nation’s non-performing loans this year, severely undermining the banking sector’s profitability.
Taiwanese banks have seen their non-performing loans increase by NT$5.7 billion (US$188.24 million) to NT$100 billion in April from a month earlier, mainly because of TMT’s bad debts, according to data provided by the Financial Supervisory Commission (FSC).
TMT did not disclose its debt position yesterday. Local media reports said the company’s total debt as of the end of April was about US$800 million.
First Commercial Bank (第一銀行) is the company’s largest creditor in Taiwan, with total loans of about US$120 million, followed by Mega International Commercial Bank (兆豐國際商銀) with US$96 million and Shanghai Commercial & Savings Bank (上海商業儲蓄銀行) with about US$80 million, the reports said.
TMT said the company has met with its major creditors in Taiwan several times, but failed to reach a consensus extending and restructuring debt.
The Financial Supervisory Commission (FSC) yesterday fined Citibank Taiwan Ltd (花旗台灣) NT$10 million (US$357,194) and DBS Bank Taiwan (星展台灣) NT$6 million for breaches of the nation’s anti-money laundering (AML) regulations. The NT$10 million fine is the highest penalty that it has imposed on a domestic bank, the commission said. Citibank Taiwan failed to set up a sound mechanism for evaluating clients’ risk of money laundering and for detecting suspicious transactions, Banking Bureau Deputy Director-General Huang Kuang-hsi (黃光熙) told a news conference in New Taipei City. The bank based its AML policies on those of its US-based parent company, Citigroup Inc, but the policies
The rise of the cryptocurrency dogecoin has reached a new level after the token was used to pay for a lunar satellite launch. SpaceX, Elon Musk’s commercial rocket firm, is to embark on a moon voyage next year carrying a so-called cubesat — a mini-satellite used for space research — from Geometric Energy Corp that has been paid for entirely in dogecoin. The development is the latest twist in the saga over the digital token, which started as a joke in 2013, but is now a dominating Internet meme and sitting on a 21,000 percent rally in the past year. Musk has
CAPACITY EXPANSION: Construction of the site, which is to be the firm’s first mRNA production facility outside of Europe, is to begin this year and likely finish in 2023 COVID-19 vaccine maker BioNTech SE yesterday said it would build a Southeast Asia headquarters and manufacturing site in Singapore to produce hundreds of millions of messenger RNA (mRNA)-based vaccines per year. Construction of the site would start this year, and it could become operational by 2023, the German company said in a statement. “With this planned mRNA production facility, we will increase our overall network capacity, and expand our ability to manufacture and deliver our mRNA vaccines and therapies to people around the world,” BioNTech chief executive Ugur Sahin said. The vaccine produced by BioNTech jointly with Pfizer Inc of
OUTBREAK: About 200 of the airline’s 1,200 pilots are not able to work. Most of them have been quarantined to prevent further infection, but 12 have COVID-19 China Airlines Ltd (CAL,中華航空) yesterday confirmed that it would temporarily reduce its cargo flight services to cope with a pilot shortage, as one-sixth of its pilots have been sidelined by a COVID-19 outbreak. “We are working out a new schedule,” the airline said in a statement after local news media reports on Saturday said that it would be reducing its cargo services from Wednesday, primarily affecting US destinations. CAL declined to give details about its new operating plan, but the reports said that it would be suspending its cargo flights to Dallas Fort Worth International Airport, Hartsfield-Jackson Atlanta International Airport and