The Singapore government’s investment company Temasek Holdings is remaining tight-lipped on market talk that it may take a stake in embattled liner operator Pacific International Lines (PIL).
Privately held PIL, owned by the family of MD Teo Siong Seng, has admitted to being under financial strain amid the Covid-19 pandemic.
PIL is understood to have fallen behind on charterhire payments to its tonnage providers, which include Japanese ship owners. In recent months, PIL has taken steps to improve its balance sheet, including exiting the Transpacific trade, selling a subsidiary, Pacific Direct Line, and a number of ships. In April, PIL issued a statement to refute rumours that the company was facing bankruptcy.
Teo however, is known to be well connected with Singapore’s ruling elite, having previously served as a Nominated Member of Parliament and President of the Singapore Chinese Chamber of Commerce and Industry. Teo is the current President of the Singapore Business Federation.
His connections have led to speculation that Temasek may provide a lifeline to PIL.
A spokesperson for Temasek however, told Container News that the firm does not comment on “speculation or hypotheticals”.
Asked about state assistance by Container News, PIL declined to comment, but said, it is working to resolve its outstanding charterhire payments. As at 31 December 2018, PIL had US$1.12 billion of long-term debt, which could still be covered by US$1.69 billion of equity.
Adding, “We are extremely grateful that our Japanese lessors continue to be supportive of PIL. As has been reported, we have been in regular dialogue with them on charter payment arrangements and have been providing them with continuous updates and it is our intention to settle all charter payments in full."
PIL is continuing with its service rationalisation plan, which started in 2019 and will further optimise its fleet utilisation, in an effort to preserve its balance-sheet strength.
“The group is confident that with all these strategies in place, we will be able to weather this difficult environment,” said PIL.
Amid the Covid-19 pandemic, CMA CGM, HMM, Evergreen and Yang Ming are among the liner operators that have received financial assistance from their respective countries’ governments, an action that has been criticised by AP Moller Maersk boss Soren Skou.