In-fighting, Debt Cripples Japanese Sanko Steamship

Embattled Japanese owner Sanko Steamship has confirmed the ship arrest of Sanko Mineral in Baltimore on May 8 following the court action of two counterparties.
Sanko called the arrest of the 2008-built, 51,000 dwt bulk carrier “unfortunate”,
adding that “the response we have received from the majority of ship owners and other parties has been supportive”.
Lloyd’s List reported yesterday that Cobelfret of Belguim and Liquimar of Greece were seeking the arrest of Sanko Mineral in Baltimore ahead of an attempt to extract

The action heightened speculation that Sanko’s strategy to defer payments to owners while it raises cash through ship sales is in danger of collapse. The company said in a statement yesterday that: “Other than minor disruptions, all operations are continuing as usual. Sanko has adequate funds to continue to operate through the remainder of the standstill period and is able to meet all of its operational obligations, including payments for bunker fuel.”

The company added: “Following the request from Sanko on March 9, 2012, for the support of shipowners, shipyards and financial institutions for a standstill agreement, Sanko has continued to maintain its normal course of business.”
At the end of March, Sanko secured approval to freeze its debt payments to domestic financial institutions after presenting turnaround proposals in a first meeting with creditors under the Japanese alternate dispute resolution system.
The banks agreed to a standstill on debt payments for three months as Sanko finalizes its rehabilitation plans, which could include the sale of up to 30 ships.
The court actions by Cobelfret and Liquimar raised the spectre that foreign owners to whom Sanko owes money may be losing faith in the plans.