Japanese bulk shipping company Daiichi Chuo files for reorganization

Ocean carrier MOL, which owns 16.5 percent of Daichi, is projecting a loss of approximately $209 million as a result of the bankruptcy.    Japanese bulk shipping company Daiichi Chuo Kisen Kaisha will file a petition for reorganization under Japanese bankruptcy laws.
   The Tokyo Stock Exchange (TSE) said in a recent statement that the company’s board of directors “has made a resolution to file a petition for the commencement of civil rehabilitation proceedings. As such, TSE has decided to delist the company’s stock and designate it as Securities to Be Delisted. The company is not scheduled to apply with TSE for an examination pertaining to a reconstruction plan, etc.”
   TSE said the company’s shares would be delisted for a month.
   Daiichi Chuo KK “filed for bankruptcy protection in Tokyo with 120 billion yen ($1 billion) in liabilities, as over-expansion amid plunging freight rates pushed the Japanese shipping line to four straight years of losses,” according to reports from Bloomberg.
   Citing a statement from Daiichi Chuo KK, Bloomberg said the company’s Star Bulk Carrier unit also filed for bankruptcy with 57 billion yen in liabilities.
   Japanese ocean carrier Mitsui O.S.K. Lines Ltd. said Daichi Chuo KK applied to commence civil rehabilitation procedures in the Tokyo District Court. MOL owns 16.5 percent of Daichi, according to Bloomberg.
   MOL said it projects an “extraordinary loss” of about 25 billion yen ($208.7 million) from the stock revaluation of Daichi in its current fiscal quarter, which ends tomorrow, due to the company’s commencement of civil rehabilitation.
   The impact of the extraordinary loss on the business performance for the full fiscal year is currently under close examination, added MOL.