S&P Confirms Hapag-Lloyd Rating After Merger with UASC
Rating agency Standard & Poorâs confirmed Hapag-Lloydâs B+ rating and took the company off its CreditWatch with future negative implications. Hapag-Lloyd was upgraded to Outlook Negative. The merger with UASC has added debt to Hapag-Lloydâs capital structure. However, due to the acquired ships and containers of UASC no bigger investments are planned in the next few years. Thus, more cash flow should be available for repayment of debt and deleveraging. âThe company should be able to maintain credit ratios we consider commensurate with the current rating in 2017-2018,â Standard & Poorâs wrote in the Research Update. The rating agency also acknowledged the competitive advantages of the merger with UASC such as Hapag-Lloydâs larger size and capacityâŚ
Report Calls for Shipping Liners to Consolidate
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 âM&A on their minds need to be proactiveâ if they hope to reap the kind of rewards winners in consolidated industries enjoyâor 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.
Hapag-Lloyd Posts Third Straight Quarter of Profits
German continuer shipping company Hapag-Lloyd AG recorded its third consecutive profitable quarter, marked by higher transport volumes and reduced shipping costs in the third quarter of 2015. For the first nine months of 2015, the shipper posted a âŹ6.8 billion revenue, up âŹ1.9 billion compared to the same period a year ago, attributing much of the increase to its December 2014 merger with the shipping business of Cia. Sud Americana de Vapores SA (CSAV). Hapag-Lloyd also recorded a net profit of âŹ160.4 million in the first nine months of 2015âŚ
Hapag-Lloyd in US$500 mln IPO
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.
Hapag Lloyd IPO Valued at Over $5.5 Bln
A flotation of a minority stake could value the world's fourth-largest shipping group German-Chilean Hapag-Lloyd AG at more than 5 billion euros ($5.5 billion) and could take place as early as autumn. Hapag-Lloyd AG has already mandated investment banks Deutsche Bank AG, Goldman Sachs Inc. and Joh. Berenberg, Gossler & Co. to advise on the initial public offering (IPO), as per various media reports. The reports indicate Hapag-Lloyd expediting efforts to float a minority stake on the Frankfurt stock exchange as early as this fall. The net proceeds from the IPO could be used to cover the companyâs pretty extensive debt of USD 3.65 billion. However, the plans are yet to be confirmed by Hapag-Lloyd.
CMA CGM Finance Stronger than Hapag-Lloyd
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 âShipping: CMA CGM and Hapag-Lloyd: Peer comparisonâ, Moody's says that the French liner may have an advantage when tapping the capital markets for future fleet investments, assessments.
U.S. DOJ: First Guilty Plea in RO-RO Price Fixing Scandal
South American Company Agrees to Plead Guilty to Price Fixing on Ocean Shipping Services for Cars and Trucks. First Charges in the Departmentâs Antitrust Investigation Involving Ocean Shipping Services; Conspiracy Affected Global Cargo Shipments, Including at Port of Baltimore. Compañía Sud Americana de Vapores S.A. (CSAV), a Chilean corporation, has agreed to plead guilty and to pay an $8.9 million criminal fine for its involvement in a conspiracy to fix prices, allocate customers and rig bids of international ocean shipping services for roll-onâŚ
Hapag-Lloyd, CSAV Advance Merger Negotiations
Talks between German containership company Hapag-Lloyd and Chilean fellow shipping company Cia. Sud Americana de Vapores SA (CSAV) about combining the container liner shipping activities are entering the next phase, Hapag-Lloyd said in a press release today. Both companies have signed a nonbinding Memorandum of Understanding (MoU). As the next step, the due diligence will take place, after which a binding contract could follow, Hapag-Lloyd said. A merger between the two companies would potentially produce the world's fourth-largest container shipping company.
