Struggling Norwegian dry bulk company Bulk Invest ASA (formerly Western Bulk) will immediately file a petition for bankruptcy having been unable to reach a deal on restructuring with its creditors, the company said.
In addition, the board of directors of the company’s subsidiary Bulk Shipowning IV AS has reached the same decision, whereas the respective boards of the company’s remaining subsidiaries have decided to continue their restructuring efforts for the time being.
“As a consequence of the bankruptcy petition, all trading of the company’s shares will be halted. Since the company will file for bankruptcy, in accordance with the above, the company will request that further trading is stopped,” Bulk Invest ASA said in a statement.
Continued weakening of the dry bulk shipping rates and a sharp negative cash flow from operations in January 2016, have left the company with lossmaking charter-in contracts in Bulk Shipholding and direct/indirect investments in 1.6 vessels.
What is more, the company expects that the commitments for chartered vessels for future periods, point to the potential claims of about USD 250 million.
All restructuring efforts have proven futile following the rejection of the company’s restructuring proposal by seven ship owners, who filed an injunction to reverse the company’s sale of Western Bulk Chartering AS on 25 February 2016.
“Regrettably, the board of directors of the company has therefore come to the conclusion, after several extensions and attempts of dialogue, that there is no longer a basis for the company to proceed with its restructuring efforts, and consequently, that there is no longer a basis for continued operations ,” the statement reads.
“As the assumption of a going concern cannot be upheld, the company will immediately file a petition for bankruptcy.”
Bulk Invest has explored a number of different restructuring alternatives, and its final restructuring proposal presented to the ship owners included immediate cash payments to the ship owners, the continuance of the Bulk Invest group’s charter parties at rates significantly above the current market, and an envisaged recapitalisation of the company in the amount of approximately USD 40 million.