Danish Copenship files for bankruptcy

By Finance

The shipping company Copenship -a private ownership, has submitted records for bankruptcy in Copenhagen. That has happened after it has suffered damages in the dry bulk market according to company’s Chief Executive Michael Fenger in a statement for Reuters. Copenship has been dealing with more than 50 documented small-sized dry-bulk ships, transporting the following goods-timber, iron ore and grain. In a text message to Reuters on Wednesday, Fenger has mentioned that the company has done their best to gather the money needed for rescuing the company but there is nothing else that can be done.

Image: Dennis Adriaanse

That change has been indicated by the Baltic Exchange's main sea freight index, as it detects values for vessels transporting dry bulk goods. The index has reached its lowest level for almost three decades this Tuesday and that reflects the fainter values across all four ship portions. For example on Wednesday the index has showed a level of 569 and that is not far from the historic low level of 554, reached in July 1986. Listing the reasons for that condition, Fenger has written several of them as for example the utterly severe freight market, the counterparts that have inflicted damages to the company and the insurances cases that might have happened.

According to insolvency administrator Per Astrup Madsen from Copenhagen law firm Lett, the ships will be returned back to their owners. Copenship has anticipated a revival of the business in 2014. However the dry bulk cargo values have proceeded to decrease. Copenhagen-based D/S Norden, a leading international dry bulk shipping company has experienced a net loss of $326 million for 2012 and 2013 calculated together. The D/S Norden’s anticipation is for a 2014 full-year EBITDA loss in the margin between $290 million and $230 million.

In the words of shipping analyst Peter Sand at shipping organisation Bimco, the year 2015 appears to be slow when it comes to the demand side, while the supply side will produce the same quantity of new capacity as in 2014. The analyst has written in a note that such a course of action will not advance the existential features of the market balance.