The many years with deficits have started to take their toll on Herning Shipping, as the carrier was once again unable to escape the deficit vortex this past year with a 2013 deficit of USD 17 million.
This means the carrier has now presented a negative result for six straight years, and that is not sustainable in the long run, CEO Jesper Fors Holmark tells ShippingWatch.
"We've entered a dialog with our bank in order to find a solution, because this is wearing down the company's strength and our equity is starting to become very negative. So we've started this dialog with the bank to find a solution for the company going forward," he says.
By the end of 2013 Herning Shipping had a negative equity of USD 27.3 million.
The carrier is currently talking to Handelsbanken about a solution for the carrier's USD 246 million debt, which is set to mature in 2016. The company will obviously need an agreement before that time, says Jesper Fors Holmark, though he declines to comment on what an ideal agreement would be like from the carrier's perspective.
Weak spot rates continue
"The company still has liquidity, so this is not an urgent matter. But the loan has to be refinanced in 2016 and we have to find a solution before that time."
The company is especially struggling under the exceedingly weak spot rates, and the fluctuating market makes it impossible to say when Herning Shipping will be back in black. According to Jesper Fors Holmark, the first quarter turned out well:
"But now things seem to be going a bit the other way again. So it's difficult to see any real changes happening in the market, but there is a general faith in the market that things are going to turn around, though we're still waiting to see any actual clear signs of this."
The final consolidation between Herning Tankers and Nordic Tankers was completed in April 2013, which means that the two carriers remain legally independent even though they operate as one carrier and are owned by private equity fund Triton.