International Shipholding Corp. filed for bankruptcy protection this week after trying to shed assets and negotiate with lenders.
ISH, which had planned to move from Mobile, Ala., to New Orleans, said that it will continue operating and that it has lined up $16 million in financing to help it through the Chapter 11 proceedings.
“While the company is facing challenges with its debt and capital structure, we believe our core business segments are performing satisfactorily,” CEO Erik L. Johnsen said in announcing the filing.
Late last year ISH said it would keep its Jones Act, rail-ferry and pure car/truck carrier (PCTC) services and sell dry bulk and specialty contract segments as well as minority investments in chemical and asphalt tankers, and rail car repair facilities near Mobile. Deadlines in its deals with lenders ranged from early December to this past June.
Selling the assets would reduce their debt significantly, CFO Manuel Estrada told analysts then. But if they weren’t successful, “there would be substantial doubt about our ability to continue as a going concern,” ISH said in regulatory filings.
While they’ve made some sales including dry bulk carriers, a barge from a Jones Act tug/barge unit and their New Orleans office building, “we are divesting our assets at values that are much lower than we anticipated, and, as a result, we continue to lack the necessary liquidity to operate at the required levels,” filings note.
By the end of the first quarter on March 31 they had cut gross debt to $117.1 million from $242.9 million in 2014 and were operating 26 U.S. and foreign-flag vessels, about half the number of earlier years. ISH, which was founded as Central Gulf Steamship Corp. in 1947, had a first quarter net loss of $8.5 million on revenue of $53.8 million. Court papers list assets of $305.1 million and total debts of $226.8 million.
Documents filed with the bankruptcy court for the southern district of New York can be viewed online.
