It is reported that Samsun Logix is the latest domino to fall in the dry bulk shipping market, bringing pressure on those companies that might be next in line. It has filed for the equivalent of bankruptcy protection, raising questions about a number of publicly traded dry bulk ship owners that had chartered their vessels to the firm.

According to a senior official from creditor Shinhan Bank, reports began circulating that Samsun Logix filed for court receivership, which is similar to bankruptcy protection. Samsun Logix got slammed by the cancellation of a number of contracts by companies, to which it had sub chartered vessels, causing it to run short of cash. Shipping companies sometimes have some vessels chartered to competitors while other craft are chartered from them.

Three other dry bulk shipping companies namely UK based Britannia Bulk Holdings, Singapore based Armada and Ukraine based Industrial Carriers all filed for bankruptcy protection in the last several months and returned ships they chartered from Samsun earlier than expected, sticking the Korean company with massive losses.

Armada filed for bankruptcy protection after Australian miner Fortescue Metals Group defaulted on a contract said to be worth USD 200 million. As freight rates plunged over 90% from their summer highs, the number of companies filing for bankruptcy protection kept piling up. The pain isn’t just felt by the companies that go under, but also by those from which they charter vessels.

DryShips announced it agreed to sell the 1995 built M/V Toro for USD 36 million, a 43% discount to the USD 63.4 million agreed upon with buyer Samsun Logix in July. At the time the news looked like a good deal since DryShips had announced in January in a filing with the Securities and Exchange Commission that Samsun Logix had backed out of the deal completely. The news that Samsun Logix is filing for bankruptcy protection calls into question whether the sale of the Toro will go through at all.

(Sourced from Forbes)