DEBT-SADDLED shipping firm Negros Navigation (Nenaco) recently sold two vessels, the M/V San Lorenzo Ruiz and M/V Mary Queen of Peace, to Liberian firms Aria Navigation Inc and Chaston Navigation Inc for $3.46 million
Inactive since September 12, 2005, the 6,051-gross registered ton (grt) San Lorenzo Ruiz sold for $1.6 million. The double-bottom vessel built in Japan in 1973 has a top speed of 15 knots and was registered in Iloilo port.
The 7,610-grt Mary Queen of Peace, idle since 2006, sold for $1.86 million. The 1974 Japan-built vessel has a top speed of 18 knots.
Most of the proceeds of the sale went to Bank of Commerce, one of the creditors of Nenaco.
The sale capped three years of auction planning.
Two more vessels have been sold since 2006 — the M/V Saint Ezekiel Moreno and M/V Princess of Negros — for a combined price of $2.6 million.
“In the process of the sale, Nenaco has settled its obligations to Pilipinas Shell, Avenue Asia, and the Bank of Commerce, all of whom held chattel mortgages on the vessels,” Nenaco receiver Monico Jacob said in a report filed before a Manila Court handling Nenaco’s rehabilitation program.
According to the firm’s rehabilitation plan, it needs to dispose of aging ships to operate more efficiently and buy vessels to replace lost revenues from sold-off vessels.
The company is under a 10-year rehabilitation plan that started in 2004 for total outstanding obligations estimated at P2.4 billion, including P1 billion in bank loans.
In its financial report, Nenaco posted a turnaround in operations last year, booking a net income of P357.44 million for the first 11 months of 2007, up from P449 million losses for the same time in 2006.
“The company’s volume and revenues were on target. However, such gains turned out to be not enough to counter the adverse impact of the lingering fuel price hike,” the company said in the report.
“Fuel costs exceeded budget by 17% due largely to the blistering fuel price hike. Accordingly, fuel to revenue ration deteriorated to 47% for the month of November 2007 compared from its target of 4%,” it added.
Nenaco’s passage business for November 2007 serviced 57,399 passengers, 8% higher than target; it lifted freight of 5,960 TEUs, 5% higher than its goal.
