"K" Line Refutes Bankruptcy Allegations
Japanese container shipping group Kawasaki Kisen Kaisha (“K” Line) has spoken out on claims it is facing bankruptcy.
Media reports indicate the “K” Line blames APL Logistics for circulating what it says are false statements about its financial status.
However, the group issued a statement on Friday without naming the source of the rumors:
“It has become known to us that a certain non-vessel operating common company (NVOCC) had circulated false e-mails stating a potential bankruptcy of “K” Line to their customers. The message contained in the e-mails is unfounded without basis of any financial analysis and what is stated therein is false.
“We have strongly protested to the said company, who has admitted that the statement was false and promised to send to their customers a message to retract such statement. We are also considering taking any necessary legal measures that we may have against the concerned parties.
“Our financial condition is sound,” says the “K” Line Statement.
As of June 30, 2016:
• the cash and deposits is JPY 214,304 million (approximately $ 2,082 million?
• total net asset is JPY 330,392 million (approximately $ 3,210 million)
• equity ratio is 29.1 percent
• and liquidity ratio is 154.5 percent.
“Moreover, we maintain the credit rating at the same sound and viable level as other shipping companies. It is evident also from these figures that the messages sent by the said company to its customers are erroneous.”
“K” Line Group is an integrated logistics company that operates a wide variety of vessels, including container ships, dry bulk carriers, car carriers, tankers, LNG carriers, offshore support vessels, heavy lift vessels and ferries.
“K” Line has plans for building 10 new 14,000 TEU vessels by 2018 while disposing of two small- and medium-size container ships to accelerate the concentration of its fleet on the east-west routes.
The group issued its company report on Friday noting: “In fiscal 2015, cargo movements were sluggish against the backdrop of the slowdown of the global economy, while tonnage supply pressure continued, causing the freight rate condition to remain at the worst level ever. Under these circumstances, although the “K” Line Group strived to improve fleet allocation and reduce operation costs, ordinary income declined.”
Under the group’s medium-term management plan, issued in April 2016 and covering the period up until the end of the 2019 fiscal year, the bulk carrier fleet will undergo major change. An earlier version of the plan called for a fleet expansion from 526 (in 2014) to 564 in 2019. That was revised to 514 vessels with 43 of the 50 planned vessel cuts being bulk carriers. In particular, the number of small- and medium-size vessels, including Panamax vessels, will be reduced by 30 percent and the number of such vessels will be halved in the medium-term.
The report is available here.