Is Shipping Headed Towards a Restructuring Tsunami?

By Hamish Norton and Harold Malone, Jefferies & Company, Inc.

Financial conditions in the shipping industry have deteriorated significantly and are expected to result in broad-based financial restructuring activity. While each situation is unique, many companies are showing early warning signs that they may be entering the restructuring waters (see the table below for a list of some of these signs). Understanding the process and players is an important part of being a proactive restructuring participant. This article discusses the current market environment, provides an introduction to the restructuring process and addresses some possible outcomes.

It is a common misconception that the term “restructuring” is equivalent to bankruptcy. In truth, many restructurings are out-of-court, consensual processes that allow companies to stabilize their business, develop a strategic plan to

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