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COSCO’s OOIL Takeover Threatened by China-US Tensions?
The proposed takeover of Orient Overseas International Lines (OOIL) by COSCO Shipping could be hindered by worsening China-US trade ties and the Trump administration’s efforts to curtail Chinese investments in the US.
According to Alphaliner, investors’ enthusiasm for OOIL’s proposed takeover by COSCO seems to have dampened as OOIL’s share price dropped to HKD 69.25 on April 10, its lowest closing price since July 7, 2017 when the general cash offer at HKD 78.67 per share was unveiled.
The shares are now trading at a 12 percent discount to COSCO’s offer price, with investors increasingly concerned that the deal could be blocked by US regulators, Alphaliner said.
Although the COSCO-OOIL deal has already passed the US’ Hart-Scott-Rodino anti-trust review in October 2017, it still requires approval from Committee on Foreign Investment in the United States (CFIUS).
COSCO earlier informed that the deal is to be completed by June 30, 2018. If the company fails to complete the deal by the deadline, OOIL will receive a break fee of USD 253 million, however, the fee would be waived if the transaction fails to meet the requirements of CFIUS, Alphaliner concluded.
ONE Hasn’t Finalized Any Orders
The newly established Ocean Network Express (ONE) is keeping its fleet expansion plans on ice for the time being.
The joint venture, established in July 2017 in Singapore through the merger of Japan’s shipping lines, Nippon Yusen Kaisha (NYK), Mitsui OSK Lines (MOL), and Kawasaki Kisen Kaisha (K Line), commenced service on April 1, 2018.
Namely, at this point, the key priority for the JV is to harness synergies from the three liners it is made up of under the new brand.
The statement was made following media reports that linked the company to a potential order for 20,000 TEU vessels.
Earlier this month the company launched its first magenta containership at Imabari Shipbuilding in Japan.
The 14,000 TEU ship is named ONE Manato and will now undergo final touches before it gets delivered in December 2018.
ONE’s fleet is comprised of 230 vessels totaling 1.44 million TEUs.
Pacific International Lines Delivered Profit in 2017
Singapore-based Pacific International Lines (PIL) returned to profitability in 2017 due to an increase in shipping revenue, container sales and initiatives which improved operational efficiency.
The company reported a net profit of USD 119.5 million for the twelve-month period ended December 31, compared to a net loss of USD 251.4 million seen a year earlier.
The company’s turnover for the period surged by 32 percent reaching USD 4.04 billion, compared to USD 3.07 billion reported in 2016, mainly driven by an increase in shipping volume, average freight rates and container sales.
The group’s container shipping business posted increases in shipping volume and average freight rates of 12% and 9%, year-on-year, respectively. This resulted in a 21.3% growth in the shipping business’ turnover. PIL also implemented initiatives which helped to increase operational efficiencies, with shipping expenses increased by only 9.3% in FY 2017 despite the much larger growth in revenue.
PIL informed that it is “encouraged by the recovery” that led to strong financial results, and expects overall market conditions to continue to improve in 2018, driving shipping volume, freight rates and container sales.
CMA CGM Grows Its Logistics Presence
French liner company CMA CGM has reached an agreement to acquire an equity stake of nearly 25 percent in CEVA Logistics AG (CEVA), a global player in the logistics sector.
Under the deal, CMA CGM has committed to subscribe for mandatory convertible securities of CEVA in an estimated amount between CHF 380 and 450 million (approximately USD 391-463 million).
According to the French liner, these securities will be convertible into CEVA common shares subject to obtaining all required regulatory approvals.
The equity investment will take place in connection with CEVA’s planned initial public offering on the SIX Swiss Exchange, announced on April 20, 2018, and remains conditioned upon its successful completion.
The closing of the transaction remains subject to the completion of CEVA’s IPO as well as to the approval from regulatory authorities.
CEVA is the 5th player in contract logistics, and the 10th in the world in freight forwarding, with a strong footprint in Asia. It has temporary/agency workers in 160 countries and manages more than 9 million sqm. of warehouses across the globe. CEVA posted revenues of over USD 7 billion in 2017.
Source: World Maritime News
