Nordea Bank AB’s Singapore unit seized two vessels from Korea Line Corp.’s local subsidiary in a bid to recoup $64.9 million in debt.
Nordea Bank arrested the Blue Diamond ship yesterday and the Blue Coral earlier this month, the bank’s lawyer Corina Song of Allen & Gledhill LLP, said by phone today. The ships were pledged as collateral for an $82 million loan in October 2006, the bank said in a March 17 lawsuit with the Singapore High Court.
“Due to a change in circumstances, the action is no longer necessary as we’ve arrested the Blue Diamond,” Song said, referring to the suit.
Two of Korea Line’s vessels were seized in Singapore, the ship operator said in an e-mailed response to Bloomberg News questions. It didn’t comment on the lawsuit.
Korea Line, the country’s second-biggest operator of dry-bulk ships has sought to bar creditors from seizing its assets. The Korean shipping line, seeking to restructure 2.23 trillion won ($2 billion) of debt, went into receivership in Seoul and filed for U.S. bankruptcy protection last month.
Korea Line posted losses in seven of the past eight reported quarters as it hired vessels on long-term contracts before a glut of new ships and slowing demand in China caused rates to tumble.
Three other vessels owned by the Singapore unit have been seized by other creditors in the U.S., according to Nordea’s court filing.
The case is Nordea Bank Finland Plc, Singapore Branch v Korea Line (Singapore) Pte OS220/2011 in the Singapore High Court.