Shipping firm Daiichi Chuo Kisen files for bankruptcy

Japanese bulk-shipper Daiichi Chuo Kisen Kaisha sought bankruptcy protection in both Tokyo and New York Tuesday, with plans to restructure $1.5 billion in debt.

The company suffered net losses for four consecutive years to March and was braced for another loss this business year.

Seven of the bulkers are on hire to Daiichi Chuo’s subsidiary Daiichi Chuo Kinkai, which is operating as per normal and not included among the entities that are seeking court protection. It specializes in bulk shipping of such items as coal and iron ore. That would be a rare case of listed corporate failure since Prime Minister Shinzo Abe returned to power in 2012 with aggressive policies to boost the economy. Global Maritime Investments Cyprus Ltd. filed for bankruptcy protection September 15 and said it would wind down its business.

“However, the market turned a lot worse than we expected”.

Following the bankruptcy announcement, the Tokyo Stock Exchange said the shipper’s shares will be delisted from the bourse’s first section on October 30.

Trade in Daiichi Chuo shares was halted following the report. (MOL), who is Daiichi Chuo’s largest shareholder, will book a ¥25 billion ($208.7 million) loss in the second quarter of the fiscal year.

“I agree dry bulk looks gloomy but we feel we’re much closer to the end of this part of a downcycle than we are to the beginning”, said Martin Rowe, managing director of Clarksons Platou Asia, a shipping services firm, in Hong Kong.