Tuesday, January 25, 2011

Receivership Announced As Baltic Dry Freight Index Tumbles

Inevitable Conclusion to Continuing Market Falls
Shipping News Feature

UK – KOREA – The weeks graph to indicate the state of the Baltic Dry Index resembled a profile of a ski slope again this week as it dropped over a hundred points to stand at 1325 yesterday. Inevitably the first real casualty of falling bulk freight prices has been announced this week as Korea Line Corporation filed for receivership today, the dry bulk and liquid natural gas (LNG) carrier hit by the slump in charter freight rates.

Korea Line’s website claims a fleet of forty three vessels but around 70% of these are believed to be chartered and it is inevitable that today’s rates probably mean the company is over extended on long or medium term charters. The companies share price has dropped over 35% in the last quarter and an approach to the Seoul authorities resulted in the granting of voluntary receivership and the suspension of share trading.

In 2006 Korea Line won the ‘Most Trusted Company – Korea’ Award and was expanding rapidly, lie so many others who thought the good times would get even better the deals it negotiated in 2008 doubtless lie at the root of the company’s problems today.