Thematic Route

The German multi-purpose vessel MPP shipping company Hansa Heavy Lift (HHL) has officially filed for bankruptcy liquidation recently.

Private equity firm Oaktree Capital Management (referred to as Oaktree) confirmed that it had filed for bankruptcy liquidation with a court in Hamburg earlier on December 10.

In a recent statement, Oaktree said, "The operating environment of the global shipping industry is highly challenging. Under such circumstances, Hansa Heavy Lift had to file for bankruptcy liquidation with the court earlier today." Oaktree has been a loyal investor of the company for the past seven years and has worked tirelessly with the company's management team to comprehensively assess all potential strategic approaches to ensure the business's viability. However, in view of the persistent structural challenges in the global heavy-lift shipping industry, Oaktree Capital supports the company's decision to file for bankruptcy and has decided not to make any additional capital investment in this business.

In 2011, Oaktree invested and established HHL from the bankrupt Beluga Shipping. As stated in the above statement, over the past seven years, it has consistently claimed to be "a steadfast investor" of the company. Facts have proved that for this American capital management company, venturing into the multi-purpose shipping sector might be disastrous. In 2010, Oaktree Capital provided a loan of 280 million US dollars to Belgua, which was on the verge of bankruptcy at that time. Despite the considerable support, it still failed to change the fate of Belgua's bankruptcy. After going bankrupt, Belgua reorganized and established a new heavy crane vessel enterprise, HHL.

Due to excessive transportation capacity, the freight rate remained persistently low. In 2016, in the multi-purpose sector, we witnessed two companies, Flinter Shipping and Abis Shipping, filing for bankruptcy.

The shipping companies that have a direct competitive relationship with HHL are the well-known BBC Chartering and Thorco. In fact, HHL has been rumored to be acquired in the market for the past two years. Previously, there were media reports that Zeamarine was eager to acquire the company, but no agreement was reached in the end. Additionally, it was rumored that some companies, especially some shipping companies from Germany, had also made contact, but the final result showed that there was no outcome.

The bankruptcy of HHL dealt a deeper blow to Oaktree Capital's already heavily loss-making multi-purpose shipping investment. It has been reported and speculated that the bankruptcy of HHL might have been triggered by the seizure of the 12,776 deadweight ton multi-purpose vessel (MPP) "HHL Elbe" (built in 2008) in the Port of Rouen, France.

However, sources familiar with Oaktree Capital said that there were many structural problems that led HHL to file for bankruptcy. They believe that filing for bankruptcy is the final step. Before this, HHL had attempted debt restructuring but failed.

According to the information about the company provided by Ship News Network to Xinde Maritime Network, the company currently owns 13 vessels. Constructed between 2009 and 2012, with a deadweight tonnage ranging from 12,000-dwt to 20,000-dwt.