CSAV, the financially troubled ocean container carrier, is pressing shipowners to slash hire rates by 30 percent, a move that could trigger a domino effect across the box ship charter market. Singapore-based Pacific Shipping Trust which has chartered two of its 12 ships to CSAV said the Chilean carrier is seeking lower charter payments as part of a $750 million restructuring plan.
CSAV indicated it "would require the cooperation of shipowners to provide the necessary assistance by agreeing to contribute with a temporary reduction of charter hire payments of about 30 percent, part of which will be capitalized," PST Management said in a statement.
"Despite the potential revenue reduction, PST's business model and fundamentals remain sound and stable," said PST Management CEO Alvin Cheng. PST is a wholly-owned subsidiary of ocean carrier Pacific International Lines.
CSAV's move will have a major impact on the market, as 91 of the 95 ships in its fleet, totalling over 270,000 TEUs, are chartered. CSAV is the world's 16th largest ocean carrier with a 2.2 percent market share, according to AXS-Alphaliner, a Paris-based consultant. The carrier had idled 16 percent of its fleet as of April 13, according to Alphaliner.
CSAV, which has appointed German ship finance bank HSH Nordbank to aid its restructuring, plans to raise $400 million from a capitalization of its outstanding charter party commitments with shipowners and finance companies.
Other ocean carriers have secured charter rates on a case-by-case basis but CSAV is the first line to seek cuts across an entire fleet.
CSAV indicated it "would require the cooperation of shipowners to provide the necessary assistance by agreeing to contribute with a temporary reduction of charter hire payments of about 30 percent, part of which will be capitalized," PST Management said in a statement.
"Despite the potential revenue reduction, PST's business model and fundamentals remain sound and stable," said PST Management CEO Alvin Cheng. PST is a wholly-owned subsidiary of ocean carrier Pacific International Lines.
CSAV's move will have a major impact on the market, as 91 of the 95 ships in its fleet, totalling over 270,000 TEUs, are chartered. CSAV is the world's 16th largest ocean carrier with a 2.2 percent market share, according to AXS-Alphaliner, a Paris-based consultant. The carrier had idled 16 percent of its fleet as of April 13, according to Alphaliner.
CSAV, which has appointed German ship finance bank HSH Nordbank to aid its restructuring, plans to raise $400 million from a capitalization of its outstanding charter party commitments with shipowners and finance companies.
Other ocean carriers have secured charter rates on a case-by-case basis but CSAV is the first line to seek cuts across an entire fleet.