By Gavin van Marle
This year’s merger of United Arab Shipping Company (UASC) with Hapag-Lloyd has pushed the German shipping line’s erstwhile largest shareholder, Chilean carrier CSAV, to a first-half loss of $201.4 million. Announcing its interim results in Santiago, CSAV management said the reduction in its shareholding after the UASC merger created a $167.2 million “dilution accounting loss”.
“Due to the closing of this merger, CSAV diluted its participation in Hapag-Lloyd from 31.35 to 22.58 per cent, resulting in a dilution accounting loss of $167.2 million. This effect is explained by the fact the IFRS standards do not allow to consider the synergies involved in this transaction as part of the value of the merger, which are estimated by HLAG in US$435 million a year. “From an economic perspective, the projected synergies are fundamental to evaluate the value of this business combination, the company added.
The overall half-year loss in the company’s container segment was further deepened by a $25.1 million tax bill in Chile and an $8 million loss at Hapag-Lloyd over the six months. However, Hapag-Lloyd’s overall loss was tempered by an $18 million net profit in the second quarter.
However, CSAV management said that it would contribute to a forthcoming capital increase planned by Hapag-Lloyd management, and which would see its stake in the Hamburg-headquartered line upped to 25 per cent.
“As a part of the [UASC] transaction, within six months after the closing of the merger, Hapag-Lloyd will perform a cash capital increase of $400 million. CSAV will participate with a major share in order to increase its shareholding and achieve a 25 per cent stake in Hapag-Lloyd, after the capital increase and the purchase of the needed additional shares, in line with what was announced during the second half of 2016.”
CSAV’s other businesses, principally car-carrying and some other transport services, posted a net profit of $2.9 million for the half-year, compared with a $5.4 million loss last year.
Reprinted courtesy of The Loadstar (www.theloadstar.co.uk)