Stolt-Nielsen Acquires Jo Tankers’ Chemical Fleet for $575 Million

Photo: JO Tankers
Photo: JO Tankers

Oslo-listed Stolt-Nielsen Limited (Oslo Børs: SNI) announced Monday an agreement to acquire the chemical tanker operations of Jo Tankers for approximately $575 million.

 The transaction includes 13 chemical tankers and a 50% share in a joint venture for eight additional chemical tanker newbuildings.

Eight of the existing ships have all-stainless steel tanks and range in size from 19,000 dwt to 38,000 dwt. The five others have a combination of stainless steel and coated tanks, all of which are approximately 37,000 dwt. Six of the 13 ships have been on time charter to Stolt Tankers for the last five years.

The newbuildings included consist of eight all-stainless steel eco-friendly ships of 33,000 dwt. The ships are on order from New Times Shipbuilding in China, the first of which was delivered in early July 2016. The seven others are to be delivered in the second half of 2016 and in 2017.

“The transaction covers the tonnage replacement needs of our current chemical tanker fleet for the next several years,” commented Niels G. Stolt-Nielsen, Chief Executive Officer of Stolt-Nielsen Limited. “While giving us some operational savings, it adds new trade routes to our service offering, thus expanding our presence on key tradelanes and enabling us to better serve the needs of our global customer base.”

The company says funding for the transaction has been secured through some of its main banks with a combination of bridge financing, secured term loans, and available corporate funds.

A statement from Jo Tankers says Stolt-Nielson emerged as the best buyer after an open international selection process.

“The business environment requires economy of scale, global capacities and increased service flexibility,” said Nils-Petter Sivertsen, CEO of JO tankers. “In each of these areas Jo Tankers has reached the limit of our capabilities. The move from regional partner to global player would require a partner who shared our values and long term thinking. We are proud that a quality company like Stolt wanted to purchase our business.”

The deal is expected to close in September 2016.