Cargill pursues Mercator Lines over deferred purchase contracts

“On 26 May 2015, the company received statutory demands from Cargill International SA and Cargill Financial Solutions in relation to cretain deferred purchase contracts,” Mercator Lines told the Singapore Exchange.

“The IFA (independent financial advisor) and the company is in regular discussion with Cargill and other creditors in relation to the restructuring plan,” it added.

The restructuring plan is aimed at establishing a refinancing, recapitalisation and restructuring programme for the loss-making shipowner. Mercator Lines, together with the IFA, an investment bank and its legal advisors, are currently in negotiations with creditors including Cargill and potential investors in relation to the restructuring plan.

In mid-April this year, Mercator Lines appointed the IFA to assess options for its financial affairs.

“Based on the successful implementation of the restructuring plan and anticipated cash flows, the board is of the view that group and company can continue as a going concern for the foreseeable future,” Mercator Lines said.

Mercator Lines has stayed in the red for three consecutive years amid the sluggish dry bulk shipping market, as it posted a loss of $125.4m for the financial year ended 31 March 2015.