Rickmers Maritime uses cash to navigate choppy waters

Faced with a rapidly rising loan-to-valuation ratio, Rickmers Maritime CFO Quah Ban Huat increased cash by nearly 1,000% until he could renegotiate the terms of the company’s loans.
Quah Ban Huat
Quah Ban Huat

The shipping industry has been hammered. 

The 250-year old Baltic Dry Index, a measure of global dry bulk shipping rates, dropped 94% to 663 points in the six-month period following May 2008 when it hit an all-time high of 11,793 points. Shippers far and wide saw charter rates, and by extension ship values, drop precipitously. This was the case at Singapore-based shipping trust Rickmers Maritime.

Even though our vessels are on long-term fixed-rate charters with reliable, consistent and stable cash flows going out for a few years, banks only recognise charter-free market valuations in loan-to-value covenants, said Quah Ban Huat, chief financial officer of the trust. From late 2008 onwards, container volumes...

¬ Haymarket Media Limited. All rights reserved.

FinanceAsia has updated its subscription model.

Registered readers now have the opportunity to read 5 articles from our award-winning website for free.

To obtain unlimited access to our award-winning exclusive news and analysis, we offer subscription packages, including single user, team (2-10 users), or office-wide licences.

To help you and your colleagues access our proprietary content, please contact us at subscriptions@financeasia.com, or +(852) 2122 5222

Article limit is reached.

Hello! You have used up all of your free articles on FinanceAsia.

To obtain unlimited access to our award-winning exclusive news and analysis, we offer subscription packages, including single user, team (2-10 users), or office-wide licences. To help you and your colleagues access our proprietary content, please contact us at subscriptions@financeasia.com, or +(852) 2122 5222