CSAV-Hapag Lloyd Merger OK’d

A merger between Chilean shipping company, Compañía Sudamericana de Vapores (CSAV) and the German company Hapag Lloyd is one step closer to being reality.

In a Special Shareholders Meeting, held last Friday in Valparaíso, an 84.5% of CSAV’s total shareholders approved the merger of the company’s containership business with Hapag Lloyd.

The meeting had a quorum of 92.6% of the shares of CSAV. The chief executive of CSAV, Oscar Hasbún, valued the support of the shareholders. “Once again, our investors have shown their support to the project we are driving and their confidence in the operation we are carrying out. This is shown by the low percentage –less than 1%- that voted against the transaction. We expect that on April 20 we will be able to confirm that the appraisal right of 5% or more of the shares was not exercised and that the negotiations with Hapag Lloyd can go ahead”, said the executive.

This decision becomes final in 30 days, i.e. April 20, during which time dissident shareholders have the right to withdraw. The company defined that the appraisal right should be less than 5% of the company’s total shares in order for the transaction with the German company to be completed.

At the end of January 2014, CSAV and Hapag Lloyd signed a non-binding Memorandum of Understanding (MOU) subject to the result of due diligence currently under way. In the event of the merger, CSAV would become the largest shareholder in the combined entity, with a 30% share.

Should the merger succeed, the combined company would become the fourth largest operator in the world, having global coverage with close to 1 million TEUs capacity, freight volumes of 7.5 million TEUs annually and combined annual sales of around $12 billion.

Meeting approves capital increase to finance own fleet

The Special Shareholders’ Meeting also approved a capital increase of $200 million, to be carried out during the first half of this year.

Its main object is to complete the financing of the acquisition of seven 9,300 TEUs containerships currently being built. The number of shares to be issued will be 4.850.252.400, which takes into account a margin relating to possible exchange rate volatility. The price of these shares will be at least that of the appraisal right.

The new ships are being built by the Korean Shipyard Samsung Heavy Industries (SHI) and will be delivered from the end of 2014. They will be equipped with the latest technologies which will allow CSAV to reduce its fuel consumption costs significantly. Their incorporation will allow the replacement of ships currently being chartered by the company.

With this acquisition, the company will have over 50% of own fleet by the end of 2015, which will also be one of the most modern and efficient in the industry.

 

csav, March 24, 2014

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