Japan's Sanko Steamship Declares Bankruptcy

Sanko Steamship, one of Japan’s oldest shipping companies, finally filed for bankruptcy after clashing with ship owners for months over the restructuring of a $2 billion debt. This is the latest victim of the shipping industry’s 4-year decline.

The nearly 80-year old dry bulk and tanker shipping firm is seeking bankruptcy protection amid incredibly low freight rates, an oversupply of vessels and high bunker fuel prices.

Sanko gave up the out-of-court settlement process it had pursued since March, and chose to seek protection from its creditors, reports Reuters. That was because it found itself in a severe cash flow problem as multiple ship owners reacted against the reorganizing of charter fee payments by seizing Sanko-owned ships among others.

Sanko said its current top management would serve as the administrator for the bankruptcy. The company restructured once before after filing for bankruptcy protection in 1985 and had total debts of $1.95 billion. The Japanese firm managed a fleet of 185 ships, which included 46 tankers and 27 dry bulk carriers, as of April 1.

Official Notice on the Petition for Commencement of Corporate Reorganization Proceedings