Daiichi Chuo Kisen Kaisha, Japan’s fifth largest shipping line (with over 170 ships operating – including 45 owned), filed for bankruptcy in September, sending shockwaves through the ranks of dry bulk shipping operators. The line filed for bankruptcy protection in Tokyo during early October with $1bn in liabilities.

The company had suffered four consecutive years of losses and was expected to post a deficit of more than $100m in 2015. Its stock was delisted from the Tokyo Stock Exchange on 30th October with the shares, which plunged 44% in value this year, being suspended upon the bankruptcy announcement.

MOL has three post-panamax coal carriers on 15-year time charters to Daiichi Chuo, the contracts for which commenced in June 2015 and are due to terminate in May 2030. The vessels concerned are the 60,876gt/2013 built Shoyoh, Reihou and Tenso. The trio of vessels was transferred from Daiichi Chuo to MOL in May 2015.

With a history dating back to 1892, Daiichi Chuo’s problems are the most serious in Japanese shipping since the demise of Sanko Steamship in 2012. Tokyo District Court later approved an application for the start of civil rehabilitation procedures by Daiichi Chuo Kisen Kaisha. The company’s creditors had until 7th December to file their claims, while the company was given until 25th December to evaluate and declare its assets. The process will then progress with the company having until 3rd February to produce a rehabilitation plan.