(The Loadstar) – The delay in the merger between Hapag-Lloyd and UASC is due to some of the Gulf carrier’s creditor banks “seeking additional security” from UASC’s sovereign backers, according to an Alphaliner report.
UASC’s current primary shareholders are Qatar Holding and the Public Investment Fund Saudi Arabia, which after the merger will own 14.3% and 10.1% respectively of Hapag-Lloyd.
Hapag-Lloyd advised on Friday that the closing date of the merger had been pushed back from 31 March to 31 May.
It said the transaction was “not at risk”, but alluded to the banking hitch by saying that “all necessary” approvals had been obtained by Hapag-Lloyd, and “substantially all” had been obtained by UASC in order to close the deal.
Nevertheless, a lawyer source told The Loadstar today that although it was not an uncommon practice in mergers, it did mean it was still possible for the deal to be called off at the eleventh hour.
He said: “If the conditions are not satisfied or waived by the long-stop date; the agreement shall terminate automatically.”
In its announcement last week, Hapag-Lloyd said the hold up in the merger would not impact the launch of THE Alliance on 1 April, which would include “all vessels as planned”.
The unexpected delay has forced the two carriers to sign vessel-sharing agreements (VSAs) as an interim measure ahead of the expected close of the transaction.
According to Alphaliner, UASC will take an initial slot allocation of 5,990 teu a week from Hapag-Lloyd across all of its US services covered by the 19 operated within THE Alliance network, but the analyst was unable to ascertain the details of the slot swap allocations made on the Asia-Europe and Asia-Middle East trades.
From 1 April, Hapag-Lloyd/UASC, will join with Yang Ming and soon-to-be-merged Japanese carriers K Line, MOL and NYK in THE Alliance.
In terms of capacity between Asia and North Europe, the 2M+HMM (including Hamburg Sud) will have a 40% share, the Ocean Alliance 35% and THE Alliance + UASC 25%.
UASC was previously a member of the Ocean 3 alliance and had a global cooperation slot exchange deal with Hamburg Sud.
Meanwhile, this Friday Hapag-Lloyd will publish its net financial result for 2016 and will host an investors’ conference call.
The carrier posted a net loss of $158m for the first half of last year, but managed to scrape a small $9m profit in the third quarter.
Last month, it released its provisional full-year ebitda result for 2016, recording an operating profit of €607m, compared with €831m in the previous year.
Although the line’s liftings increased by 2.7% to 7.6m teu, revenue decreased to €7.7bn, versus €8.8bn in 2015, as it suffered a “significantly lower” average freight of $1,036 per teu, against the previous $1,225.
The Loadstar is fast becoming known at the highest levels of logistics and supply chain management as one of the best sources of influential analysis and commentary.
CAIRO, March 2 (Reuters) – The Houthi Transport Ministry in Yemen said on Saturday there had been a “glitch” in undersea communication cables in the Red Sea as a result of actions...
by Captain John Konrad (gCaptain) In the current American labor landscape, the stark contrast between the assertive strides of transportation unions and the maritime sector’s unique labor challenges is striking....
By Mikhail Flores MANILA, Dec 2 (Reuters) – Evacuations were under way in the Philippines after a quake of at least magnitude 7.5 struck the southern region of Mindanao on Saturday night,...
December 2, 2023
Total Views: 2164
Why Join the gCaptain Club?
Access exclusive insights, engage in vibrant discussions, and gain perspectives from our CEO.
This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.