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Rickmers Maritime Trust wound up due to ‘aggravated illiquidity and lack of new investors’

Wed 12 Apr 2017 by Rebecca Moore

Rickmers Maritime Trust wound up due to ‘aggravated illiquidity and lack of new investors’
Rickmers Maritime Trust is being wound up due to “aggravated illiquidity and lack of new investors”

Rickmers Maritime Trust is being wound up due to “aggravated illiquidity and lack of new investors”, its trustee manager Rickmers Trust Management Pte Ltd has announced.

It said it had not been able to restructure the trust’s debts, which led to the failure – among others – to make the US$196.7 million principal repayment to the HSH Syndicate due on 31 March 2017 and the S$4.3 million coupon payment to noteholders in November 2016.

The statement added: “The trustee-manager is disappointed to have to announce that, after much effort placed on achieving a consensual restructuring among creditors, potential investors have not supported an injection of new equity into the trust due to the challenges in obtaining, through a consensual process between parties, noteholders’ and other creditors’ consent for significant debt write-offs. 

“In light of the aggravated illiquidity and lack of new investors, the trustee-manager opines that it is impracticable to continue the trust and that it shall therefore be wound up.”

The trustee-manager said that it is in advanced discussions with a potential buyer for the trust’s assets which may allow the trust to distribute cash recoveries upfront to unsecured creditors. While the parties are in advanced discussions, no deal has been finalised at this stage. 

VesselsValue said that the fleet of RMT is worth US$89 million. This is equal to the scrap value of the vessels. On 11 September 2016 the value of the fleet fell by around 45 per cent due to distressed market transactions following the collapse of Hanjin. In one year the value has fallen from US$200 million down to US$89 million representing a decline of over 55 per cent.

It opined that: “The eventual winding up of Rickmers Maritime Trust has been a long time in the making. One of the major contributors to the downfall of the trust lies in its fleet of panamax container ships (sized between 3,000 teu and 5,999 teu). Panamax means that it will just fit through the old Panama Canal locks, however, with the expansion of these locks (opened last year) the panamax boxship has become somewhat defunct. Deliveries of these vessels has tailed off as owners realise the predicament of the class, however, the old fleet still remains; becoming increasingly worthless - 88 per cent of the panamax fleet is currently valued at scrap. The failure of this midsize panamax line highlights the difficulty in survival for lines that do not embrace alliances, consolidation and newer, larger vessel types.”

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