Japanese shipping company Daiichi Chuo KK has filed for bankruptcy as a result of the Chinese economic slowdown that recently took the country by storm, according to Bloomberg.
Daiichi Chuo KK filed for bankruptcy protection in Tokyo, showing US$1 billion in liabilities, making this the biggest collapse by a publicly-traded Japanese company in 2015.
The carrier took action as a result of plunging freight rates, as well as too many ships built to supply commodities to Asia’s biggest economy.
Mana Nakazora, Chief Credit Analyst in Tokyo at BNP Paribas SA, said: “If you look at the big picture, China’s weakness is the reason why Daiichi Chuo is heading for default. The market has lost confidence and it’s now testing names where it can see the possibility of a Glencore-like sell-off.”
Yoshihiro Nakatani, Senior Fund Manager in Tokyo at Asahi Life Asset Management, said: “There is a growing consensus that companies with exposure to developing and commodity-dependent nations will see earnings weaken severely because those economies are slowing.”