Industrial Carriers Bankruptcy in question

Industrial Carriers Inc. filed for bankruptcy in October 2008.

This from Bloomberg

Industrial Carriers, based in the Marshall Islands and operating from Odessa in Ukraine, has sought protection from creditors, Michael Ivanov, a senior chartering officer in Odessa.

The shipper's operating office is in Odessa, with a financial office in Athens and representative offices in Shanghai, Moscow and Rio de Janeiro, the Web site showed. The bankruptcy filing was made in Piraeus, Greece, according to TradeWinds.

Since Sept. 26, Industrial Carriers has been sued or is suing other parties in 13 lawsuits in New York and London, according to legal filings data compiled by Bloomberg.

Oh - but not so fast.

Now, 5 months later, the Greek Courts say no,

The Piraeus court threw out the petition on jurisdictional grounds, finding that on the balance of probabilities ICI — which had offices in Ukraine, Greece and elsewhere — had its seat in Odessa rather than Athens, it has emerged.

The appeal filing includes “new evidence”, including greater detail of the Greek residency and background of two of ICI’s three directors, said its lawyer, Andreas Nassikas.

An appeal hearing has been scheduled for May 28 this year.

There's a lot more to this, which you can read in Lloyd's List, but this is my personal favorite.

Staff at the defunct chartering entity have claimed that moves by a handful of owners and charterers to freeze its assets cut short its efforts to settle with more creditors.

Surprise, surprise.

Samsun Logix in financial trouble

Lloyds List reports another bulk carrier is in severe financial trouble.

SAMSUN Logix, one of South Korea’s largest bulker operators, has become the latest shipping company to apply for court protection following a cash flow crisis caused by the financial difficulties at Armada (Singapore), Britannia Bulk and Industrial Carriers.

The company, which owns 15 bulkers and has another four newbuildings on order, lodged an order for court receivership, similar to bankruptcy protection, at Seoul’s central district court Feb. 6th.

The demise of Armada and others had a major impact on Samsun.

We are a victim of the recent maritime casualty that caused the collapse of Britannia, Armada, ICI and others,” said the source.

Samsun Lunix is believed to have been owed about $40m alone by Armada (Singapore)

They might be liquidated, or, the bank might decide to find someone to operate their ships until the market improves.

If the Seoul district court approves Samsun Lunix’s application, the court will appointed a group of representatives from the company and creditor banks to work out a reorganisation and restructuring plan. The shipping company’s largest creditor bank is Shinhan Bank.

The restructuring could involve the sale of vessels, redundancies or the sale of the business.

The firm’s fleet comprises capesize, panamax and handysize vessels built in the 1980s and 1990s. The oldest vessel is the 1982-built, 21,289 dwt Ataraxia, while the youngest is the 1999-built, 69,406 dwt Clio.

There are four newbuildings on order including two 57,000 dwt bulkers at STX Shipbuilding that are due for delivery in 2010 and two vessels on order at a Chinese yard, the company insider said.

The party's over for bulk carriers

Apparently bulk shipping is a bit like farming. I come from farm country, and there is a joke in these parts that goes; "How do you end up with a million from farming?
Start out with 10 million!"

The first bulk carrier has gone bankrupt. Industrial Carriers Inc. They had 1 billion dollars in revenue in 2007. One Billion! They operated 50 ships. I don't know how many they owned, if any.

Lots of companies have entered the bulk shipping business in the last 10 years.
One can understand why. One can also understand why this will probably be just the first of many companies to go belly up.

From the Journal of Commerce:

"During the market's free-fall that began this summer, rates for 150,000-165,000-ton Capesize ships crashed by 50 percent as of last week to just over $12,000 a day compared with a peak of $233,000 in late May."


Click here for complete article.

That's almost a 95% drop in revenue! Of course the charter rates were insanely out line on the high side, the result of too much demand for bulk cargoes such as iron ore and grains.

I will post later regarding the other companies, especially those who issued stock.