South Korea’s Dong-A Tanker has thrown in the towel and applied for court receivership in Seoul, TradeWinds has learnt.
Shipping players that are familiar with Dong-A confirm the company legal status, saying it has been been struggling for several years.
“Dong-A has been selling its vessels for a while,” one shipping source said. “It owns some capesize bulk carriers and is trading them on spot… with the current drybulk market, it is losing money everyday.”
Dong-A owns a fleet of 19 vessels comprising three capesizes, three pure car/truck carriers (PCTC), four feeder containerships and the rest tankers.
Shipping players say Dong-A's creditor banks that include the Korea Export-Import Bank (KEXIM) and Korea Development Bank (KDB) have declared “event of default’ on the company as the firm has difficulty repaying the loans.
"The action by the firms' creditor banks left Dong-A with little choice but to seek protection from court," said the shipping source.
“We are involved in some of Dong-A ‘s vessels but we have not received any notice from the company yet,” said a shipping firm based in Singapore.
Officials at Dong-A could not be reached for comment.
Dong-A was set up in 1968 by Lee Myung-Jae as a shortsea chemical-tanker outfit to trade between China, Japan and Korea.
Lee’s son Lee Jong-Myung took over the firm in 2001 and diversified the fleet to include bulk carriers and medium size tankers.
Some shipping players describe Dong-A to be an aggressive player and had invested in a number of newbuildings that include capesize vessels, long-range 2 (LR2) tankers and PCTCs.
“Its aggressive expansion is another reason that caused the company’s downfall,” added the shipping source.
According to VesselsValue.com, Dong-A sold 11 vessels last year and three small chemical tankers in 2016.
Those ships sold last year included four capesizes, three aframax tanker newbuildings, two suezmax tankers and two small chemical tankers.
