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Rickmers Maritime looks to lay-ups as it reports $55.6m Q2 loss

Rickmers Maritime looks to lay-ups as it reports $55.6m Q2 loss
Singapore shipping trust Rickmers Maritime reported a second quarter loss of $55.6m, and is looking at laying-up vessels as panamax rates worsen.

Rickmers Trust Management saw its losses widen dramatically in the second quarter to $55.6m, compared to $15.67m in the same period in 2015, as it took a $51.5m non-cash impairment due to the deteriorating charter market.

Lower charter rates for its fleet of panamax boxships were reflected in charter revenues of $17.97m in Q2 2016 compared to $28.47m in the same quarter in 2015.

“So far, we have been fairly successful in keeping the trust’s vessels employed despite the depressed market. However, over the next 12 months, we are likely to face even stronger headwinds as we are seeing acceleration in redeliveries of panamax vessels, driven by the upsizing of the Panama Canal,” said Soeren Andersen ceo of Rickmers Maritime.

As a result taking vessels out of service may well prove to be the only option. “We have 11 vessels trading in the spot market, and we need to take practical measures and actively consider decommissioning some of these vessels by laying them up when they are redelivered. This willreduce operating costs significantly while the market is depressed,” Andersen said.

Meanwhile Rickmers Maritime is continuing refinancing discussions with its banks as looks to ensure long term solvency as its faces an SGD100m ($74.6m) three-year bond maturing on 15 May 2017. The trust has outstanding debts of $179.7m and has obtained debt standstill on principal payments till 31 August 2016.

“The restructuring process is fairly complex and made more difficult by current market conditions. Nevertheless, we remain focused on securing a unified single credit facility that is sustainable and that gives the trust greater flexibility and a longer runway to manage its liabilities and growth,” said Tomas Norton de Matos cfo of Rickmers Maritime.

The trust has net cash of $23.05m at the end of Q2 2016, compared to $40.8m at the start of the period.

Rickmers Maritime closed at SGD0.078 per unit on Friday.