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| Troubled Dubai shipping major looking at distress sale |
| Ravi Menon / Bangalore Oct 29, 2009, 12:20 IST |
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Dubai-based freight forwarder and logistics company Hull & Hatch Logistics LLC (HHL), is said to be looking at a distress sale of assets and is scouting for buyers in India, according to shipping industry sources.
A few Indian shipping companies, including a Chembur, Mumbai-based shipping carrier have expressed interest in acquiring the troubled logistics company, but have not gone ahead because of valuation issues, sources said.
“HHL’s operations have slowed down considerably worldwide and in India; hence, prospective buyers are not keen to follow up on their enquiries,” sources said.
Hull & Hatch Logistics India Pvt Ltd, the company’s Indian subsidiary, is said to have less than 30 employees stationed at the premises of Saisea Logistics, its Mumbai agent. Saisea executives could not be reached for comment despite repeated attempts to contact them.
The company is understood to be facing a rash of litigations to recover dues in the form of various shipping assets from creditors. It is also facing legal action in a New York court from Hansa Sonderburg Shipping for recovery of dues.
HHL started shipping operations in 2004 and has leveraged promoter equity down the years to ensure growth. “HHL is currently in the process of settling receivables to its creditors. Much of its 12,000 containers has been seized by creditors and just over 500 containers are left on their books,” sources said.
HHL has also operated four vessels on a chartered basis since 2007. Though the company is debt free, its entire working capital is understood to have been drawn from promoter equity, leaving it with negligible receivables, sources added.
The logistics and liner businesses posted combined revenues of 250 million dirhams, with net losses of 29 million dirhams in 2008, according to company documents. The net losses were incurred by high receivables and operating expenses, excessive liabilities and asset erosion.
The company has over 150 full-time employees on its rolls, including master mariners. In India, HHL has offices in Mumbai, Chennai and Coimbatore. Its international offices include Malaysia, Kuwait, Iran, Kenya and Canada.
HHL’s flagship H&H Lines Ltd operates liner services primarily in the Indian sub-continent, South-East Asia, Gulf, Red Sea and African geographies. Its primary focus has been on international freight forwarding, dry and liquid bulk transportation, besides managing freight transit and handling in collaboration with other ocean carriers or via subsidiaries.
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