Jinhui Shipping & Transportation, a dry-bulk shipping company, will do 'everything and anything' to recover almost US$10 million it is owed by mainland shipping company Grand China Logistics (GCL).
The undertaking came after news that GCL, which is controlled by parent company HNA Group, paid about US$2 million to Greek shipping owner Vafias Group last week to cover unpaid charter payments on a 177,000 deadweight tonne (dwt) Capesize bulk cargo ship.
'We are going to take whatever action it requires to secure our rights,' said Jinhui vice-chairman Raymond Ching Wei-man.
Asked whether this included arresting Grand China ships or taking the company to court, Ching said the action would include 'everything and anything'. But the recovery action would focus on GCL's shipping operations, which include business run by associates Grand China Shipping and Grand China Shipping Development, rather than on other parts of the HNA Group which include Hong Kong Airlines and Hong Kong Express Airways. Jinhui, which is 54.8 per cent owned by Jinhui Holdings, has already won arbitration awards in London against GCL and expects to win a third award for about US$5 million.
The Hong Kong-headquartered, Oslo-listed shipping company, is one of about 10 shipping firms owed money by GCL. Others include Norwegian outfits Golden Ocean and Spar Shipping. Noble Chartering, an offshoot of the Hong Kong-headquartered commodities group, also faced difficulties on a Grand China ship it took on charter.
Shipbrokers said charterers and shipowners were now unwilling to lease GCL ships in case the vessels were arrested as creditors pursued unpaid bills. 'I would not push Grand China ships to clients,' said one Singapore-based shipbroker. This reluctance to charter GCL ships has exacerbated the firm's cash-flow problems even though it reported assets of US$7 billion at the end of last year.
The wrangle between Jinhui and the mainland company began after GCL stopped paying hire for ships it chartered from Jinhui in 2009. Under the settlement agreement, GCL agreed to pay a total of US$26 million, while Jinhui also agreed to charter two Supramax ships of around 55,000 dwt to GCL at a daily hire rate of US$23,000 for each ship.
