German heavy-lift vessel owner HHL "again" bankrupt

2018-11-26 09:00

The bankruptcy filing of HHL, a newly established major heavy-lift shipping company formed on the foundation of the restructured Belgua company after its bankruptcy, delivers a heavier blow to the already substantial losses incurred by Oaktree Capital, a "loyal investor," in its multi-purpose shipping investments.

German heavy-lift shipping operator Hansa Heavy Lift (HHL) recently announced its official bankruptcy filing. Private equity shareholder Oaktree Capital confirmed that the bankruptcy application was submitted to a local court in Hamburg on December 10th.

Established in 2011, HHL is a continuation of Beluga Shipping, another German heavy-lift shipping company that went bankrupt. In 2010, Oaktree Capital provided a $280 million loan to Belgua, which was on the brink of bankruptcy at the time. Despite this significant support, it couldn't prevent Belgua's bankruptcy. Following its bankruptcy, Belgua was restructured, leading to the creation of the new heavy-lift shipping company HHL.

An Oaktree Capital spokesperson stated that HHL filed for bankruptcy due to the extremely challenging operating environment in the global shipping industry; considering the persistent structural challenges in the heavy-lift shipping sector, Oaktree Capital supports HHL's decision to file for bankruptcy and has confirmed that it will not make any further capital investments in this business.

Oaktree Capital stated that it has been a "loyal investor" in HHL for the past seven years, working alongside HHL's team to thoroughly assess all potential strategic avenues to ensure the viability of the business.

In 2011, the American investor established HHL from the ashes of the collapsed MPP operator Beluga Shipping and claims to have been a "loyal investor" in HHL for the past seven years.

HHL's bankruptcy further exacerbates the already substantial losses Oaktree Capital has suffered in its multi-purpose shipping investments. Reports speculate that HHL's bankruptcy may have been triggered by the detention of the 12,776-dwt multi-purpose vessel (MPP) "HHL Elbe" (built in 2008) in the port of Rouen, France.

However, sources familiar with Oaktree Capital say that numerous structural issues led to HHL's bankruptcy filing. They believe that the bankruptcy filing was a last resort, preceded by unsuccessful attempts at debt restructuring.

Between 2009 and 2012, HHL's fleet comprised 10 multi-purpose vessels ranging from 12,000 to 20,000 dwt. Last year, HHL sold some of the smaller multi-purpose vessels in its fleet; currently, its fleet consists of 5 vessels, including the detained "HHL Elbe".

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