A unit of the Singapore government’s investment company Temasek Holdings has agreed to make an initial investment in beleaguered liner operator Pacific International Lines as part of what is essentially a state bailout.
The family-run PIL, headed by MD Teo Siong Seng, confirmed on 27 May that it was in talks with Temasek unit Heliconia Capital, as the company’s liquidity became threatened by poor performance that has been compounded by the Covid-19 pandemic.
In a statement sent to Container News, PIL said, “Our discussions with Heliconia have been progressing well and we can confirm that a deal has been reached for interim funding that would allow the company to meet its most urgent operational needs. On the broader investment contemplated by Heliconia, PIL will make further announcements when there are material developments.”
The amount of this initial lifeline has not been disclosed but is said to be between US$100 million and US$110 million.
PIL’s losses had narrowed to a net loss of US$65 million the first half of 2019, compared with US$141.18 million in H1 2018. The company is delaying the release of its 2019 financial statements until the bailout discussions are completed.
In April, PIL issued a statement to refute rumours that the company was facing bankruptcy. The company has however, been doing all it can to self-rescue, including exiting the Transpacific trade, selling a subsidiary, Pacific Direct Line, and a number of ships. And last week, it was reported that PIL was considering the sale of its headquarters.
Teo 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 Shipping Association and Singapore Chinese Chamber of Commerce and Industry. Teo is the current President of the Singapore Business Federation.