Indonesian shipper hopes for $2 billion debt restructure by year-end

Wed Oct 3, 2012 1:28am EDT
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By Janeman Latul

JAKARTA (Reuters) - Indonesia's PT Berlian Laju Tanker (BLTA.JK: Quote) (PTBL.SI: Quote), the world's third-largest chemical shipper, hopes to restructure its $1.9 billion debt by the year-end and will switch its focus to niche liquid chemical and gas transport, its founder and chairman said in a rare media interview.

The country's leading oil and gas shipper defaulted on several debt instruments earlier this year and has been talking to creditors about restructuring its operations and finances. Its shares were suspended in late-January when it froze payments on its debt, and its market value has collapsed to $236 million - down 90 percent from the shipping boom of early 2008.

"We want the process to be faster. We hope all things can be sorted out by the end of the year," Hadi Surya, a 76-year-old millionaire fine wine collector, told Reuters in his 12th-floor office overlooking downtown Jakarta. "Our main focus is for the survival of Berlian Laju and to overcome the crisis."

Berlian Laju, founded in 1981 and also listed in Singapore, is the latest shipping firm to be squeezed between weak freight rates and higher shipping fuel costs in an oil tanker market struggling through the global downturn. Shipbuilders and freight groups from Japan to Italy and Germany have gone out of business or are scrambling to renegotiate with creditors.

On Tuesday, debt-laden Danish shipper Torm A/S TORM.CO announced a rescue deal that would see banks take control of the company, extend repayments on $1.8 billion of debt and provide fresh funds, buying time for the tanker market to improve. Lenders generally, though, are increasingly wary of shipping finance as credit tightens globally, and ratings agencies have cut Berlian Laju's credit ratings to default.

The industry binged in 2007-08, ordering new ships that are now being delivered. This over capacity comes as demand, particularly on the once lucrative routes between Europe and Asia, falls through the floor.

The Baltic Exchange's Dry Index .BADI, an indicator of global economic activity, has dropped by a quarter since end-June, dented by a slowdown in China, the world's second-largest economy. The index is down almost 60 percent from a year ago.

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Hadi Surya, president commisioner of Indonesia's PT Berlian Laju Tanker, speaks in an interview at his office in Jakarta October 2, 2012. REUTERS/Enny Nuraheni