THE board of Pacific International Lines has announced the company will make an early repayment to creditors who were subject to the Scheme of Arrangement, which PIL entered into as part of its restructuring in 1Q 2021.
PIL will satisfy all Scheme obligations following the pre-payment which is targeted to complete by 30 December 2021. The total amount to be repaid will be US$1 billion.
The company said it will be “a well-capitalised company with a solid financial structure and resilience to address and mitigate the cyclical nature of the industry going forward”.
The global shipping industry, including PIL, has generally benefited since 2021 from strengthening freight rates due to restricted supply: COVID-related disruptions to supply chains and port operations have resulted in a shortage of containers and vessel delays which reduced available shipping capacity. At the same time, increased pandemic-related consumption of physical goods has led to a rise in demand.
Following the restructuring in 1Q 2021, PIL also implemented various business, financial and operational initiatives, enabling the company to benefit from this positive upturn in the shipping market.
Mr SS Teo, executive chairman, PIL, said, “Over the past eight months, we have experienced the most dramatic turnaround in our financial position. In addition to the market recovery, our strong business fundamentals, ongoing restructuring initiatives and the hard work of our employees have improved our overall position.
“With our healthy cashflow situation, we decided that it was only right that we reciprocate the support shown to us by our creditors and partners, and repay the debts owed to all our Scheme creditors, ahead of schedule.”
In the near-term, PIL’s focus will be to continue to maintain a lean portfolio through regular reviews of its fleet size and service coverage to meet customer expectations.
As part of its reviews over the past year, PIL has strengthened and focused its trade routes in China, Asia, Africa, the Middle East, South America and Oceania.
Being a carrier established in the Asian and African markets, PIL is leveraging its strong position to roll out more value-added services. Over the past few months, PIL has added several direct services in response to customers’ needs – direct Mozambique service; South China to India West Coast express service; and direct China to Gulf service.