Naviera Armas, which owns Trasmediterránea is reportedly on the brink of collapse and according to El Confidential, has informed its creditors that it can't meet its financial obligations.
The company allegedly has debts of around 800 million euros and has hired Houlihan Lokey and PriceWaterhouseCoopers to come up with a strategy to solve the problem.
Trasmediterránea connects the Balearic Islands with the Peninsula and also makes inter-island trips, but the impact of the coronavirus pandemic has taken its toll on the company.
Top Executives at Naviera Armas were apparently informed about the company’s dire economic situation on Tuesday and the Director of Institutional Relations, Paulino Rivero, said on Thursday that Naviera Armas Trasmediterránea is doing all it can to stay afloat.
"We are in a process of debt restructuring to ensure that the company continues to provide an essential service in the Canary Islands and the Peninsula," she said. “At the moment there is no decision beyond the restructuring process.”
A company press release stressed that the company is "managing the refinancing of bonds; this is not a pre-bankruptcy or bankruptcy situation."
Talks are already underway with representatives from major bondholders to refinance or restructure bonds maturing in 2023 and 2024, which the company hopes “will bear fruit in the coming weeks."
Naviera Armas Trasmediterránea is adamant it can guarantee all commitments with commercial suppliers, and that services to and from the Peninsula will continue as normal.
In mid-May 2018, the National Markets and Competition Commission, or CNMC authorised Naviera Armas’ purchase of Acciona Group’s 92.7% share of Trasmediterránea for 260.4 million euros.
Naviera Armas Trasmediterránea became the leading shipping group in Spain and one of the top companies for passengers and road cargo in the Maritime Transport Sector in Europe.
In May it received about 55 million in funding from the ICO and a second cash injection of 75 million euros in August from various investment funds.
Trasmediterránea has a fleet of 40 ships connecting ports in four countries, operates more than 100 passenger and cargo routes between the Peninsula and the Balearic Islands, Canary Islands, Melilla, Ceuta, Morocco and Algeria and more than 5 million passengers travel with the company every year.