Pacific International Lines Pte. Ltd. is getting $110 million in funding from an affiliate of Singapore’s sovereign-wealth fund that will keep the debt-ridden container ship operator in business while talks continue to secure a bigger lifeline of $450 million.
PIL won the investment from Temasek Holdings unit Heliconia Capital Management, which has emerged as a white knight in a restructuring package that will freeze loan payments to the carrier’s top dozen lenders until the end of the year.
“We can confirm that a deal has been reached for interim funding that would allow the company to meet its most urgent operational needs,” the shipping line said.
PIL, the world’s 10th biggest container line according to maritime data provider Alphaliner, has struggled over the past three years as it competes against much bigger rivals in a market that has been roiled this year by the upheaval in demand because of the coronavirus pandemic.
PIL, which owns around 65 ships and leases another 45, is the latest ocean carrier to ask for state backing as the pandemic upends trade flows.
Temasek, one of the world’s biggest state investors, has largely stayed out of shipping investments since selling Singapore flag carrier Neptune Orient Lines Ltd. to France’s CMA CGM SA in 2015 for $2.4 billion.
As of June 2019, PIL owed $1.89 billion in loans and bonds, and the carrier needs cash to pay ship lease payments that run into the tens of millions of dollars.
PIL’s loss in 2018, the most recent full year in which it has reported financial figures, widened to $203 million from $141 million in 2017, making it one of the worst performers in the container line sector. It recorded a $35 million loss in the first half of 2019.