Singapore’s Pacific International Lines (PIL) is said to have received loans from Heliconia Capital Management, an arm of Singapore state-backed investment company Temasek Holdings.
Market sources said Heliconia has given “a few hundred million” dollars to the financially troubled containership company, with one financial source suggesting the amount to be around $400m.
Sources said the loan is in addition to a planned investment in PIL that would make Heliconia a significant shareholder, as TradeWinds has previously reported.
The purpose of the loan is to allow PIL to pay outstanding bills so that it could resume normal business operations.
“The lending will be used for paying shipowners on vessels charter hire, port dues, bunkering fees and others,” said an industry player. “This is a loan and is separate from the investment that Heliconia is planning to inject into PIL.”
Reorg Research also reports that PIL is in discussion with existing lenders and Heliconia for emergency funding.
“The size of the funding is still under discussion, but would rank as either superior senior debt with priority, or as senior debt, depending on whether funding comes from Heliconia or existing lenders,” states Reorg.
Heliconia did not respond to request for comment, while PIL said it does not comment on market speculations.
In May, PIL confirmed that it had entered into a six-month exclusive agreement with Heliconia regarding a potential investment.
Broader package
The move came as part of a package of financial measures to address PIL outstanding liabilities.
Industry sources said some Chinese financial investors are showing interest in PIL and may join Heliconia is rescuing the shipping line.
PIL’s financial troubles stemmed from the challenging containership market that the sector suffered for several years and the recent Covid-19 pandemic.
PIL has agreed a debt re-profiling plan with its 15 main financial lenders that covers 97.6% of the company’s debts. Under the plan, principal and interest payments on debt will be deferred until 31 December 2020. A formal standstill, preventing lenders from taking enforcement actions, has also been agreed until the same date.
However, one lender declined to join in the agreement and demanded payment of $12.6m. PIL has not disclosed whether it paid up on the loan, although a market source said he believed that it has.
According to Reorg Research, Heliconia has appointed Houlihan Lokey as financial advisor for due diligence on PIL’s investment and has held talks with at least three law firms for legal advice.
PIL is being advised by Evercore Asia (Singapore) Pte Ltd on its strategic and capital raising plans.
PIL was founded in 1967 by YC Chang, the father of chief executive SS Teo. It is the world’s 10th largest container liner company, according to Alphaliner. It controls more than 100 vessels, of which 66 are owned and 45 are chartered
