Restructuring Indian owner Mercator's banks and creditors are taking insolvency action against it as tankers are arrested.
The tanker and bulker company said proceedings have been filed at the National Company Law Tribunal (NCLT) by "a few operational creditors" and two financial creditors, ICICI Bank and State Bank of India, under the insolvency and bankruptcy code.
The cases have not yet been admitted by the tribunal, it added, so no process has started.
ICICI is said to be owed INR 500m ($7m). It had also filed an application to stop a Mercator subsidiary selling its interest in Indian oil block CB-9. This was granted in January.
The subsidiary has raised more than INR 2bn through loans from Bank of Baroda and debentures which were under the trusteeship of Axis Trustee Services.
The Mercator unit had pledged vessels and oil and gas assets to the lenders as collateral against the loan.
Bank of Baroda and Axis Trustee Services have applied to the NCLT to keep that subsidiary out of proceedings.
Tankers arrested
The company said this week it wants to sell its 47,000-dwt MR tanker Prem Mala (built 2000), but the vessel has been placed under arrest by a bank and an operational creditor.
Its other tanker, the 36,000-dwt Hansa Prem (built 2001), has also been arrested by another operational creditor. The ship is the subject of an enforced sale order by a bank, however.
In addition, its four dredgers are in the process of being sold off, with the company switching to chartering two vessels in instead.
The company says it is pursuing claims of its own worth INR 15.13bn relating to vessel losses, insurance claims and financial arbitration.
Mercator has been selling off other ships in recent months.
Last year it had a VLCC, two tankers, two FSOs, a bulker and five dredgers.
Fleet shrinking
Now it has the bulker, two tankers and four dredgers, after disposing of its final FSO last month for INR 500m.
In 2019, it sold its only VLCC, the 299,000-dwt Nerissa (built 2006), to NGM Energy of Greece for $27.5m
Its net loss in the final quarter of 2019 was INR 642m, down from INR 4.5bn in 2018.
Revenue was down at INR 1.73bn from INR 4.28bn a year ago.
Last summer it pushed out the repayment date for a five-year bond issue, but will pay a higher price.
The Reserve Bank of India (RBI) had earlier approved new terms for its $16m foreign currency convertible bonds that carry interest of 4.75%.
These will now fall due at the end of May, 2022.
The coupon will rise to 5.75%, however.
In May, the company said it could sell more loss-making ships as it began refinancing talks with banks.
It owes $185m to lenders last year, according to its website.
