Friday, June 2, 2017

More Shock Waves in Shipping and Logistics as Rickmers Files for Receivership

After Almost Two Centuries End Looms for German Group
Shipping News Feature
GERMANY – WORLDWIDE – Moving on from our story in April following the demise of the Rickmers organisation, a name associated with shipping since 1834, comes the news that, after a refusal from the group's bankers to accept financial restructuring proposals, the operation is to be forced into receivership. The decision by HSH Nordbank to deny the logistics outfit the opportunity to re-finance, a deal which would have seen over three quarters of the shares transferred from fifth generation family owner Bernard Rickmers to the financiers, apparently came as a shock to the company.

According to the assessment of the management board and supervisory board, the positive going concern prognosis of Rickmers Holding AG which was established in April and which prompted the bondholders’ meeting on Wednesday, can no longer be implemented, leaving no choice but to call a second meeting yesterday at which the decision to vote on acceptance of the expected €275 million bond was abandoned in favour of the decision to elect a joint representative with regard to insolvency proceedings.

The demise of the group has already caused shock waves throughout the industry, particularly in the light of the Hanjin debacle last year, since when some confidence in the market has been restored. Rickmers, whilst particularly known for its heavy lift operations, with a fleet to suit, sold off its break bulk and general cargo operations under the Rickmers Linie name to the Zeaborn Group in February.

In April Rickmers Maritime agreed the sale of its entire fleet of 14 containerships to Navios Maritime Partners, however although ownership of five 4,250 TEU vessels changed hands last month it would appear the balance has not yet been taken up by the Greek company. Despite disposing of such ships Rickmers Holdings has maintained the management of over 110 vessels, owning over twenty outright, including box ships to 13,600 TEU, multi-purpose cargo vessels and two car carriers and denying any existing links with the failed Singapore operation.

Besides the current fleet Rickmers has on order at least four feeder vessels costing around $70 million, and the likelihood is that all the existing vessels will now be offered for sale. The shipping price website estimates the current value of the fleet at around $660 million with a scrap value of only $245 million. With Rickmers debts said to equal €1.5 billion after losses of over €340 million last year it is believed that HSH Nordbank, itself in the midst of negotiations to privatise, fought shy of extending credit, itself having already increased its bad debt allowance from shipping groups by €5 billion in the past two years.

It is believed Rickmers owes HSH €750 million from a total exposure the bank has in the shipping sector of €17 billion. The decision to go into receivership leaves several possibilities, whilst the present management may well propose a scheme to take over the running of the group which has numerous vessels out on long charters to companies such as Maersk, there are probably companies waiting in the wings with eyes wide open for the chance of some bargain basement prices for ships, as happened with the Hanjin situation.

Photo: The museum ship Rickmer Rickmers built in 1896 in her home port of Hamburg.