PIL seeks out investment in effort to stay afloat

Shot of a cargo ship at sea

Pacific International Lines (PIL) is in negotiations with Singaporean sovereign-wealth fund Temasek Holdings over a potential cash injection to save it from bankruptcy, according to reports.

The carrier, the 10th biggest in the world, reportedly confirmed to The Wall Street Journal that it was in talks with Temasek’s Heliconia Capital Management regarding a restructuring package that would cover 98% of its debt.

This would include PIL’s 15 biggest lenders freezing loan payments and interest in an effort to stem its debt, which has already reached $2 billion. It has consistently been one of the worst performing carriers in the industry, losing $141 million and $203 million in 2017 and 2018 respectively.

In the first half of 2019 it lost $35 million as it continued to struggle with low freight rates and the continuing burden of overcapacity on the ocean. The current COVID-19 pandemic has hurt it further, as it has the whole industry.

A quarter of sailings have been cancelled so far this year as carriers find ways to stop freight rates plummeting alongside demand. The uncertainty has not been limited to carriers. Ports, in particular the major US ones, have seen demand fall drastically in the first few months of 2020.

Terminal operators as well have suffered losses, with all the major companies seeing market capitalisation drop by as much as 50% as a result of the crisis.

The Singaporean carrier is by no means the only one to seek out financial help – CMA CGM, the fourth biggest liner by market share, secured a $1.04 billion, guaranteed by the French state, from a consortium of major banks.

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