Pacific International lines (PIL), benefitting from strengthening freight rates and a rise in demand, has been able make an early repayment of US$1bn to creditors.
The prepayment is targeted to be complete by December 20, 2021, and will be made to creditors who were subject to the scheme of arrangement PIL entered into as part of its restructuring in Q1 2021.
SS Teo, executive chairman of 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 we have improved our overall position.”
PIL has greatly benefitted since 2021 from strengthening freight rates due to restricted reply: 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 Q1 2021, PIL also implemented various business, financial and operational initiatives which enabled the company to benefit from this positive upturn in the shipping market.
“With our healthy cashflow situation, we decided that it was only right that we reciprocate the support shown to us by our creditors, ahead of schedule,” Teo said. “We believe that they would benefit from the certainty of having cash returned to them earlier than anticipated.”
By satisfying the terms of the scheme fully with the repayment and continued financial prudence, PIL aims to be able to grow a strong business built on a sustainable capital structure.
In the near term, the carrier’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.
Over the past year PIL has strengthened and focused its trade routes in China, Asia, Africa, the Middle East, South America and Oceania.
As a carrier established in the Asian and African markets, PIL is using its strong position to roll out more value-added services such as a direct Mozambique service; South China to India West Coast express service; and direct China to Gulf service.
PIL continues to drive digitalisation and sustainability services as well with ongoing digitalisation efforts including e-Services, satellite communication, cybersecurity and predictive maintenance solutions.
These services have enabled PIL to provide efficient, reliable services to customers and improve the welfare of its seafarers.
Teo added: “On behalf of the board, I would like to convey our deep appreciation to Heliconia and other stakeholders, as well as all our creditors for their support and cooperation.
“I would also like to thank our employees, both at sea and onshore, customers, business partners and friends, for standing by the company with unstinting commitment and confidence.”