Singapore’s Pacific International Lines (PIL) has received between $100m and $110m in interim funding from Heliconia Capital Management, an arm of Singapore state-backed investment company Temasek Holdings.
“We can confirm that a deal has been reached for interim funding that would allow the company to meet its most urgent operational needs,” PIL said
PIL, which is undergoing financial restructuring, was reported last month to have also secured about $400m in loans from Heliconia to help it ease its immediate cask flow issues.
Shipping players believe the $110m to $110m is part of that $400m package.
On 26 May, PIL disclosed that it entered into an exclusivity agreement with Heliconia over a potential investment. The exclusivity agreement would run for six months.
The company did not disclose details of the bailout plan but said “discussions with Heliconia have been progressing well”.
Heliconia is expected to emerge as a significant shareholder of the privately-owned company once the restructuring process has been completed.
PIL’s financial troubles stemmed from challenges in liner market, which had been struggling for a long period even before the onset of the Covid-19 pandemic.
The company has carried out a debt re-profiling plan with 15 of its main financial lenders holding 97.6% of its debt.
Under the plan, debt principal and interest payments on debt will be deferred until 31 December 2020. A standstill agreement, preventing lenders from taking enforcement actions, will run concurrently.
PIL said it has also taken proactive cost reduction measures.
“The company directors and management team have taken between 7% and 10% pay cuts, in solidarity with all employees in the firm,” said PIL.
The company has more than 650 employees in Singapore.
Last week, PIL was reported by market observers to be seeking to raise $250m through the sale of its office building in the heart of Singapore's business district.
However, the company responded saying it did not have immediate plans to sell the building.
“The intent of the expressions of interest exercise is to better assess the current market value of the building. There is no direct relationship between the exercise and our on-going discussion with Heliconia,” said PIL.
PIL was founded in 1967 by YC Chang, the father of current chief executive SS Teo. Alphaliner ranks it as the world’s 10th largest liner company. It controls more than 100 vessels, of which 66 are owned and 45 are chartered.
