Compania Sud Americana De Vapores Sa News

The need of the hour is consolidation of container ship lines order to regain profitability and to overcome financial struggles, consulting firm AlixPartners says in a new report. The report says that an increased supply of vessels, coupled with the introduction of giant ships, had met with a dwindling demand in the second half of last year resulting to overcapacity, low profitability and reduced cash flow. The shippers with “M&A on their minds need to be proactive” if they hope to reap the kind of rewards winners in consolidated industries enjoy—or to prevent becoming acquisition targets themselves, the consultants suggested, pointing to the successful consolidation of the US airline industry as a possible template to follow.

German container carrier Hapag-Lloyd is looking to sell shares for a total US$500 million, and will seek listings in Hamburg and Frankfurt before the end of 2015. Hapag-Lloyd has confirmed that it is preparing for a US500 million initial public offering (IPO) this year, with the expectation that it will use some of the proceeds to order ultra large containerships. "This move will give us better access to the capital markets which will enable us to further invest in our business to become more competitive," Reuter quoted Hapag-Lloyd Chief Executive Rolf Habben Jansen as saying. Hapag-Lloyd may be valued at more than 5 billion euros in the IPO.

The credit profile of CMA CGM S.A. (CMA) is more robust than that of competitor Hapag-Lloyd AG (HL) on account of its higher profitability, bigger market share and more diverse geographic presence, says Moody's Investors Service. The agency points out that the credit profile of the French container shipping company CMA  (B2 positive) is more robust than that of German peer HL (B2 negative) on account of its superior profitability, bigger market share, and more diverse geographic presence. In the report entitled ‘Shipping: CMA CGM and Hapag-Lloyd: Peer comparison’, Moody's says that the French liner may have an advantage when tapping the capital markets for future fleet investments, assessments.