International Shipholding Corporation (OTCMKTS:ISHC), a holding company that operates a fleet of domestic and international vessels, has begun trading on the OTC Market after delisting from the NYSE due to non-compliance with listing standards. In the last few trading days, ISHC has gained over 30% climbing from $1.35 to its current intraday high of $1.86.
International Shipholding Corporation (OTCMKTS:ISHC) has been under intense financial pressure like many other companies the bulk shipping industry. The collapse in commodity prices has reduced the demand for shipping even more drastically since the financial crisis. In other bad news, the Baltic Dry Index which averages shipping rates has been hitting all-time record lows reflecting the oversupply of shipping fleets and declining demand.
The company provided an update on its strategic plan to get the company back on track from a financial perspective and a business strategy perspective. ISHC announced that it had sold a handysize bulk vessel and a capsize bulk vessel as well. In addition, the company announced it had reached an agreement to sell its minority interest in 2 chemical tankers and 2 asphalt tankers. Its strategy is to sell the remaining fleet of handysize bulk vessels to reduce its debt.
ISHC has over $260 million in outstanding liabilities which has pushed the company to the brink. Book value has declined significantly leaving investors with little to like about the company. Revenues have declined significantly in each of the last three years as has profitability. The company has announced in its 10-K that it does continue to operate as a going concern meaning that it could file for bankruptcy at any moment.
Technically, the chart looks to have broken its down trend and attempting to find its base. The stock could see several bear market rallies before a sustained move upwards. Its average volume has been increasing and the stock has recently climbed above its 10 weekly moving averages which is a bullish indicator.
ISHC is currently trading at an $14 million market valuation. The company could file for bankruptcy any day as it continues to be difficult to service its current debt levels. ISHC is making progress on its strategic plans. It has closed 10 transactions resulting in almost $100 million of funds raised through the sale of its assets. The company is attempting to reduce its debt load to a manageable level.
We will be updating on ISHC when more details emerge so make sure you are subscribed to Microcapspot so you know what’s going on with ISHC.
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Disclosure: we hold no position in ISHC either long or short at the publication of this article.