By Robert Wright in London One of the biggest operators of specialist chemical-carrying tankers, Indonesia’s Berlian Laju Tanker, has announced a temporary halt to payments on most of its bank loans, bonds and other financial obligations as it seeks to restructure after breaching its banking covenants.
My first reaction was that it seems unlikely they needed to stop payments on_all_their fleet. Unless, of course, they are playing hardball with their bankers who are desperate to get these loans back to "performing" status. The shipper wants to dial up the pressure on his banks so as to get a better deal on the restructuring of his loans and a deal that encompasses all of his loans. He has calculated that his bankers are more than a little reluctant to repo his entire fleet.
So what are the factors that will lead a banker to actually repossess ships. Perhaps it is when some of the ship types are generating such losses that they threaten to drag down the entire enterprise. In that situation, a banker would logically want to recover his assets to avoid them being part of a larger bankruptcy.
What other situations drive bankers to repossess ships rather than measures like stretching out loans?