Mercator Lines (Singapore) Indian-owned international dry bulk shipping company cuts short charters, sell a ship.

The sale of the vessel Sri Prem Putli was concluded on 21st March, 2013 resulting in net proceeds of USD 44.4 million. The proceeds from the sale of this ship have been partly used for paying down company’s debts and partly for payment of compensation & expenses relating to termination and change of terms of long term chartered-in vessels. Based on current market rates, the early termination of long term contracts would create estimated savings of around USD 25 million over the next two years.

In addition, the Company prepaid debt close to USD 30 million which would be applied towards immediate repayment schedule. This would assist the company to reduce the leverage to around 0.6 times based on numbers disclosed in the Balance Sheet as on 31 December 2012 and significantly improve its cash flows.

The Company’s proactive initiative of de-risking and liquidity raising has resulted it being in a strong position to face the industry challenges and also take advantage of the market to explore growth opportunities.

Mercator Lines (Singapore) Limited, commenced operations in 2005, and has established a market presence in the Indian coal transport market, specializing in the transportation of dry bulk commodities such as coal into India from Australia and Indonesia and iron ore from India to countries such as China.