Mercantile Shipping-Hemas joint venture enters liquidation

4 September 2015 05:07 am - 0 - {{hitsCtrl.values.hits}}

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The joint venture company of Mercantile Shipping Company PLC (MSCL) set up with the transportation arm of the Hemas group is in the process of liquidation due to the continuous losses incurred by the company, a top MSCL official said.
“The company investment in the joint venture with Hemas Transportation (Pvt) Ltd has been completely eroded due to continuing losses and the company is in the process of liquidation,” MSCL Chairman A.N.U. Jayawardena told the shareholders in the firm’s latest annual report.

The joint venture company, H&M Services (Pvt) Ltd, was launched in 2012 with the objective of providing ship crew embarking and disembarking from vessels by handling their lodging and arrival/departure and transfer to and from the vessel at the outer port limit in Galle.
The company was operating under the brand MercMas.
“We decided to exit our investment in H&M Shipping, a venture that was setup to provide crew services, due to the unfavorable market conditions foreseen going forward,” Hemas Holdings said in their latest annual report.
Hemas was believed to have held 17 percent in the joint venture.

Meanwhile MSCL Chairman A.N.U.Jayawardena said the recession in the shipping industry has continued for the seventh consecutive year due to the continuing economic recession in the USA and Europe.
MSCL is a leading ship owner and operator in Sri Lanka. The company has two charter vessels named ‘Merca Uva’ and ‘Merca Uahana’
Jayawardena said, with the charter rates continuing to be unstable in the uncertain economic environment, the financial position of the company has deteriorated further. The current charter rates for MSCL’s both vessels per day are US $ 5, 350.

For the financial year ended March 31, 2015 MSCL made a net loss of Rs.348.9 million, having provided for substantial exchange losses aggregating to Rs.219.9 million compared to a net loss of Rs.185.7 million last year.
The exchange losses are generated from a loan the company has taken from German Bank.
“However the German Bank has continued to cooperate with the company in dealing with the servicing of the loan and the company continued to pay only the interest and a 25 percent component of the capital of the loan installment,” Jayawardena said.

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Mercantile Shipping-Hemas joint venture enters liquidation

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