P&O To Float Bulk Carrier Unit For $190M

Peninsular and Oriental Steam Navigation Co. (P&O) expects its Associated Bulk Carriers unit to carry a price tag of around $190 million when it floats on the Oslo Stock Exchange in July. Shares in ABC, one of the world's largest independently owned operators of Capesize bulk carriers, will be priced at between 40 and 65 Norwegian crowns, according to the prospectus for the issue. Peter Smith, P&O director of corporate affairs, said ABC's relatively young fleet means it could use its newfound currency of shares to seek out potential acquisitions in a shipping industry ripe for consolidation. "There isn't a need for them to invest heavily, so they have the strength now to go out and make the most of their market-leading position," he said. Average revenues have increased to $16,500 per ship per day from a low point of around $5,500 in 1999. ABC made a loss in 1999, but is now trading profitably, P&O said. ABC has a fleet of 22 dry cargo vessels ranging in size from 110,000 to 210,000 dwt, with an average age of seven years -- one of the youngest fleets in the world. It serves mostly steel producers and power utilities as well as suppliers of iron ore and coal. Christiana Markets, a division of Christiana Bank, is lead manager for the initial public offering.