Hapag-Lloyd’s Rating Confirmed after Merger with UASC

Rating agency Standard & Poor’s confirmed German shipping major Hapag-Lloyd’s B+ rating and took the company off its CreditWatch with future negative implications.

Hapag-Lloyd was upgraded to Outlook Negative. The merger with United Arab Shipping Company (UASC) has added debt to the company’s 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, the German shipping giant said.

“The company should be able to maintain credit ratios we consider commensurate with the current rating in 2017-2018,” Standard & Poor’s wrote in the Research Update.

The rating agency also acknowledged the competitive advantages of the merger with UASC such as Hapag-Lloyd’s larger size and capacity, an enhanced network diversity, and the access to a young fleet.

“Hapag-Lloyd has demonstrated its ability to integrate acquired businesses and extract synergies, for example, after the 2014 takeover of the container liner shipping activities of Chile-based Compañía Sud Americana de Vapores S.A. (CSAV), which underpins our rating action,” the rating experts informed.

HapagLloyd plans to realize USD 435 million in annual synergies starting in 2019 from the merger and has a solid financial structure including a liquidity reserve of USD 1.2 billion.

Furthermore, a cash capital increase of USD 400 million is planned within six months after the closing of the merger end of May. The capital increase is backstopped by a group of Hapag-Lloyd’s shareholders.

Share this article

Follow World Maritime News

In Depth>

Events>

<< May 2019 >>
MTWTFSS
29 30 1 2 3 4 5
6 7 8 9 10 11 12
13 14 15 16 17 18 19
20 21 22 23 24 25 26
27 28 29 30 31 1 2

GreenTech in Shipping USA Forum 2019

GreenTech in Shipping USA Forum is an event for Maritime leaders who want to unlock successful business formula of the industry!

read more >

CWC World Gas & Power Series – Brazil & the Americas Summit

CWC World Gas & Power Series: Brazil & the Americas Summit is the perfect meeting place to make contacts…

read more >

FPSO Brazil Congress 2019

Charging ahead with 24 planned orders by 2022, Brazil has once again solidified its status as one of the world’s foremost oil and gas leaders…

read more >

Nor-Shipping 2019

Nor-Shipping’s conference and event programme is tailored to deliver the knowledge, value and networking to help you build your business.

read more >