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Second PDZ vessel arrested, vows to defend case

Second PDZ vessel arrested, vows to defend case
Troubles are mounting for Malaysian feeder line PDZ Holdings as more creditors start to get their hands on its ships.

Following a stock market announcement that it had received a warrant of arrest on the PDZ Maju from Continental Platform (M), the company said it would take steps to defend the arrest of its vessel.

PDZ said the arrest was pursuant to a MYR563,311 ($127,309) claim from Continental Platform for the non-payment of supply of bunkers to PDZ Mewah in December last year, costs and any further or other relief that the High Court may deem fit.

The company added that while it had been trying to reach an out-of-court settlement, these negotiations have failed and it has sought legal advice.

“The board is of the opinion that negotiations with CPSB has since fell through and, upon obtaining legal advice, has resolved to take steps to defend the arrest of the vessel and any claims that may subsequently be filed and set it aside,” PDZ said.

PDZ noted the case is expected to have minimal financial and operational impact to the group as it has secured slots from third-party vessels as an interim measure to meet its service obligations.

The expected losses from purchasing these third party slots would range from MYR45,000 to MYR50,000 per month, the company said.

PDZ cited its solicitors Mohd Latip & Associates as saying that the company has a strong case to challenge the arrest and set aside the claims

It also noted that the net book value of PDZ Maju as at 31 December 2016 is MYR5.5m.

PDZ first ran into trouble with the arrest of PDZ Mewah in January following a writ in admiralty action in rem and an arrest warrant served by Dan-Bunkering (Singapore) Pte Ltd for alleged non-payment for supply of marine fuel/gas oil. Subsequently, three more writs for action against PDZ Mewah were later served.

Total claims against PDZ Mewah amounted to about MYR3.8m. The vessel in turn, had a net book value of MYR4.7m, as at 30 June 2015.

In the wake of this second arrest, PDZ said it is revisiting the utilisation of proceeds to be raised from its proposed rights issue with warrants that was announced in last month.

PDZ had previously said the expected losses from PDZ Mewah’s arrest would be in the range of MYR90,000 to MYR100,000 per month. With the PDZ Maju also under arrest, monthly losses could rise to between MYR135,000 to MYR150,000.