ITF offers owners downturn help

ITF offers owners downturn help

As the first auctions of Britannia Bulk ships begin this week the ITF has extended the same offer of help it gave the failing company to any others that are experiencing difficulties. The Federation has pointed to the case as proof that its early involvement can assist in a humane result even where a company cannot be saved.

Two Britannia Bulk vessels, the Adventure II and Challenger II are to be sold on Wednesday at Falmouth, UK.

ITF Maritime Coordinator Stephen Cotton commented: “We reiterate what we’ve said before. We welcome anyone who is experiencing business difficulties asking us to assist where we can. After all, we usually share the same aims, that good companies continue trading and employing seafarers.”

He added: “We can offer help, especially if we’re involved at an early stage. And even if all else fails and the company is unable to continue trading, then we can call on our expertise and resources to make sure that the seafarers who might otherwise face penury and abandonment actually get home.”

In response to the expected rise in downturn-linked abandonments the ITF has issued guidelines on to tackle the problem to its inspectors and affiliated unions, and set up a crisis management team.

Cotton pointed to the recent Britannia Bulk case, where seafarers’ unions and the ITF worked closely with the affected company, as an example of how the process can work. An internal ITF report authored by its UK coordinator, Norrie McVicar, charts its involvement with the company:

On 31st of October 2008 the London based company Britannia Bulk put its main trading subsidiary into administration and became one of the first specialist bulk carriers to feel the impact of the global credit crunch. Britannia Bulk, a specialist in moving coal from the Baltic to the UK, listed on the New York stock exchange in June, its prospects seemed very productive. The company business model, under which it chartered vessels from other companies to add to the modestly sized fleet it owned directly made its company flexible in the market place, but unfortunately the announcement sent shares in Britannia, which operates 60 to 70 vessels, down 85.8 per cent to $0.27. The company was hoping for an agreement with its lenders to restructure its debt but it failed and had no alternative but to go into liquidation, seeking protection from lenders or other protection under bankruptcy laws. The company only listed its shares on the New York stock exchange in June 2008, at $15 a share, valuing its equity at $404m. Britannia Bulk is one of many operators of ships for carrying products such as coal, wheat and iron ore, which is facing difficulties because of a fall in short-term cargoes and charter rates. The Baltic Dry Index, which measures short-term charter rates, has fallen 91.7 per cent from its peak on May 20 2008. The Nordea Bank Denmark A/S confirmed to the ITF that they were the principle Secured Lenders of the Britannia Bulk Fleet. Britannia Bulk Plc through its Danish vessel manager Svendborg Ship Management A/S had 14 vessels under an ITF Special Agreement and Uniform TCC CBA. The crew of the vessels were mainly from the Philippines and some from Russia and Ukraine. On hearing the news the ITF Maritime Department set up a Maritime Crisis Management Team (MCMT) which engaged in early discussion with vessel managers Svendborg, Nordea Bank and the appointed administrators, BDO Stoy Hayward LLP. As a result of the early intervention the ITF was able to secure an agreement to mitigate the human impact of the company collapse and to ensure payment of all outstanding wages and repatriation where appropriate. Nordea Bank engaged the assistance of ship managers Wallems (Hong Kong) and Danish company Norden A/S to manage the vessels and work with the ITF on their behalf to resolve issues with regard to the payment of wages, repatriation, and retention of crew for lay-up. In the case of Norden A/S the company took over the management of five vessels and agreed to retain the current ITF terms and conditions of employment for the mainly Filipino crew. It’s understood at the time of writing that the UK based Clearwater Group has bought the five vessels originally transferred over to Norden A/S. Efforts are in progress to secure the retention of the ITF Agreement and continuation of ITF Employment Contract for the crew. The MCMT would like to place on record its thanks to ITF inspectors in Australia, South Africa, Greece, Latvia, The Netherlands, USA, Poland and the UK for their hard work in the field assisting 300 seafarers over this traumatic period. Whilst the team collectively secured over $1,444,532 in wages the real satisfaction is to have come through this campaign with a good outcome for the seafarers. The ITF team have learned some valuable information from this case and gained significant experience. We should also place on record our thanks to the Wallems (Hong Kong) whose global team gave great assistance and support to the Inspectorate through some difficult moments.

ENDS

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