After failing to secure a merger partner and facing deepening losses, Danish shipping company Nordic Shipholding is set to liquidate its operations next year.
Nordic Shipholding announced that at an extraordinary general meeting, its shareholders have resolved to liquidate the company voluntarily, bringing an end to nearly four decades of history in the tanker market.
Nordic Shipholding’s woes started in 2020 during the height of the COVID-19 pandemic, which triggered a significant decline in freight rates. Average day rates rates earned in 2021 were approximately 47 percent lower than the average rate earned in 2020.
Already engulfed in massive debts, the falling freight rates plunged the company into losses amounting to $5.8 million, resulting in a negative equity of $14.3 million by end of 2021. Attempts to bring on board a strategic partner to keep the company afloat failed to materialize.
While discussions with lenders gave the company a temporary relief in terms of securing agreements to extend the maturity of the existing bank loan facilities, Nordic Shipholding was forced to dispose of its last three vessels, Nordic Anne, Nordic Agnetha and Nordic Amy, to settle its debts. With the delivery of Nordic Amy to her new owner in April, the company was able to settle the outstanding loan balances.
With its options running thin and with no fleet, Nordic Shipholding has been forced to wind down operations. Majority shareholder Nordic Maritime agreed to waive part of its own loan to enable the liquidation.
The liquidation should be completed in 2023, after a statutory three-month waiting period.
Source: The Maritime Executive
