ARMADA Singapore has become the country's first high profile victim of the crisis in the global shipping industry, filing on Tuesday for protection from its creditors.

The company owes more than $500 million to creditors, making it the largest case to hit Singapore shipping in history.

The ship operator, which handles about 50 large dry bulk carriers, says it was hit by defaults on payments worth hundreds of millions of dollars as global demand for commodities and freight rates have plummeted, devastating the shipping industry.

Mr Tommy Jensen Rathleff, Armada's managing director, made it clear that this is not a bankruptcy filing.

It is believed that this is the first time a shipping company here has made use of Section 210 of the Singapore Companies Act. Under this arrragement, the company has eight weeks to come up with a repayment plan to its creditors.

'We are very optimistic. This is unprecendented in the shipping world, no one has used this option before. The usual way is to throw in the towel and run for the hills.

'This solution is by far the best to ensure we can keep running and that our creditors can get the maximum back,' said Mr Rathleff.

Armada is just the latest in a series of high profile shipping companies that have buckled under rising debt as the dry bulk shipping market has crashed to a 22-year low without a recovery in sight.

Danish operator Atlas filed for bankruptcy protection December, joining Ukraine's Industrial Carriers, and the London-based Brittania Bulk who went bankrupt in October.