Mercator “quitting Singapore”

Banks could take over assets of Indian owner's Lion City bulker subsidiary, TV report claims.

Indian group Mercator Ltd is to exit its Singapore bulker subsidiary, according to a TV report.

CNBC-TV18 cited sources as saying banks are likely to take over the assets of loss-making Mercator Lines (Singapore).

The move follows the resignation of Mercator Lines (Singapore) CEO Shalabh Mittal from the board of the Indian parent last month. He is remaining in charge of the Singapore unit, however.

The Indian group owns about 66% of its subsidiary, which has reported debts of around INR 10bn ($150m) and has been hurt by dire dry cargo markets.

Mercator management has not commented.

Mercator Lines has had a tough year, with lenders forcing it to sell assets including a trio of panamax bulkers, the  69,186-dwt Kesari Prem (built 1997), the 74,405-dwt Gauri Prem (built 2007) and the 73,461-dwt Sri Prem Aparna (built 2001) in December, reducing the Mercator fleet to 11 ships.

In November, creditor HSH Nordbank’s application to have the Singapore owner managed by an interim judicial manager was dismissed in the country's high court.

The shipowner said in June that it was working closely with creditors, an independent financial advisor and legal advisors to establish a restructuring plan.

It reported a net deficit in the second quarter of $11.9m versus the $6.3m seen a year ago. Revenue was $8.7m against the $14.3m in the same quarter last year.