Thu 30 Oct 2008, 16:47 GMT

NYSE suspends trading in Britannia Bulk


Shares in bunker hedge victim deemed 'no longer suitable for trading'.



NYSE Regulation, Inc. announced today that it determined that the common stock of Britannia Bulk Holdings Inc. should be suspended immediately.

In a statement, NYSE Regulation said the security is no longer suitable for trading in light of the company’s news announcements on October 28 and 29, 2008.

Earlier this week, London-based Britannia Bulk Holdings, an international provider of dry bulk shipping and maritime logistics services with a focus on transporting dry bulk commodities in and out of the Baltic region, provided an update on what it referred to as "significant financial and operational matters" prior to the company's upcoming release of its financial and operational results for the three month and the nine month periods ended September 30, 2008.

It was revealed that Lloyd's TSB and Nordea Bank Denmark had provided notice of acceleration and demanded immediate repayment of $158.7 million outstanding on a loan due to a default on the terms.

The company is currently in ongoing negotiations with the lenders regarding a sale of certain of its operating assets to settle this bank default, which if consummated, would not be expected to result in any return to the company's common shareholders. It currently owns 22 vessels, including 12 dry bulk ships.

Britannia Bulk said this week that even though it had not yet concluded the review of its financial results for the three months ended September 30, 2008, the company expected to announce a significant net loss for the period compared to the net income achieved during the second quarter of 2008.

Britannia Bulk said it believed the expected loss will have resulted partly from a bunker fuel hedge operation which is currently uncompetitive following the recent fall in bunker prices. Substantial decreases in dry bulk charter rates, exacerbated by the company's increase in chartered-in capacity during the same period and its entry into the forward freight agreements ("FFAs") are also believed to have been important factors.

Referring to the bunker hedge, Britannia Bulk said "In the three months ended September 30, 2008, the company entered into a bunker fuel hedge which is currently uncompetitive because it is hedged to prices which are significantly above the current market price of bunker fuel. As a result, the company currently estimates that its aggregate bunker fuel hedging losses for the three months ended September 30, 2008 will be significant."

Britannia Bulk said it had entered into a bunker fuel hedge to mitigate the risk of a rise in bunker costs .

"If the company's vessels are employed under contracts of affreightment ("COAs") or spot charters, the freight rates it receives are generally sensitive to the price of bunker fuel. A rise in bunker costs can sometimes have a negative temporary effect on the company's results since freight rates generally adjust upwards only after bunker fuel prices settle at a higher level.

"To mitigate the risk of this temporary effect, and in light of recent substantial movements in the price for bunker fuel, the company has in the past entered into hedging arrangements whereby it purchased a fixed quantity of bunker fuel, calculated against identifiable COAs, at a fixed price to be delivered over a specified period of time," Britannia Bulk said.

In response to what the company referred to as "severe financial difficulties", the Board of Britannia Bulk has also imposed a number of cash conservation and cost reduction measures and has limited management's ability to conduct daily sales and purchases and hedging activities, including entering into any new FFAs or bunker fuel hedge arrangements, without specific Board approval.

In its statement today, NYSE Regulation said it had taken into account the “abnormally low” trading level of Britannia Bulk stocks, which closed at $0.27 on October 28, 2008, with a resultant market capitalization of approximately of $5 million.

Application to the U.S. Securities and Exchange Commission to delist the issue is pending the completion of applicable procedures, as the company will not contest this determination. NYSE Regulation noted that it may, at any time, suspend a security if it believes that continued dealings in the security on the NYSE are not advisable.


CMA CGM Notre Dame vessel at Singapore Port. Singapore 12-month bunker calls hit all-time high in July  

TTM calls at world's largest bunkering hub reach record levels despite softer sales volumes.

Cargo port in Singapore. Singapore T3M bunker sales stay below 14m tonnes for fourth month running  

Rolling three-month volumes remain subdued despite modest month-on-month recovery in July.

Shore power system launch at Port of Callao. Peru’s Port of Callao launches first shore power system in Latin America  

DP World Callao’s onshore power supply system could cut over 6,300 tonnes of CO₂ annually.

Aristodimos vessel. New Times Shipbuilding delivers LNG dual-fuel crude oil tanker to Capital  

Chinese yard hands over 155,500-dwt vessel in ceremony attended by owner’s representative.

MSC Sabrina and Alice Cosulich ship-to-ship (STS) bunkering operation. Shell completes maiden LNG bunkering operation in Valencia  

Delivery to MSC vessel facilitated by Fratelli Cosulich said to be first-ever LNG bunker supply at Spanish port.

Marina Bay Sands, Singapore. PIL hiring senior marine fuels executive to manage global bunkering operations  

Singapore-based role includes oversight of fuel procurement and delivery operations, covering PIL's fleet of container and multi-purpose vessels.

Steel-cutting ceremony of vessels with builder's hull nos. CHB2083 and CHB2084. Changhong International Shipbuilding cuts steel on two more 3100-teu boxships for Costamare  

HSFO-fuelled vessels feature scrubbers, SCR systems and shore power connections to meet emissions requirements.

Decab Hub and MMMCZCS logos. Lloyd’s Register and Maersk Mc-Kinney Møller Center launch ammonia safety and training resources for shipping  

New tools aim to help operators build the safety management and competency frameworks needed for ammonia-fuelled vessels.

Kevin Dohmen, IBT Bunkering & Trading. IBT Bunkering & Trading appoints Kevin Döhmen to manage new Singapore office  

Döhmen tasked with developing IBT’s operation in the Asian city-state.

Peak Skarv 3 vessel. Peak takes delivery of third S-class vessel and cuts steel for ammonia-fuelled ship  

Norwegian operator marks two events at Chinese yard as ammonia-powered newbuild programme advances.