Hapag-Lloyd delays takeover of United Arab Shipping Company
GERMAN container shipping giant Hapag-Lloyd has delayed its takeover of the United Arab Shipping Company (UASC) until May 31 from March 31, but says US$7.52-$8.60 billion deal is still on.
The delay was blamed on "financing issues" stemming from the shipping sector's prolonged downturn, said Reuters. Many banks have cut lending to the industry, where freight rates fell 15.4 per cent in 2016.
All merger clearances and regulatory approvals and all necessary banking approvals from Hapag's side have been obtained as have most banking approvals from Dubai-based UASC's side, it said.
Hapag-Lloyd reported a 66 per cent fall in 2016 operating profit. It is scheduled to publish full results and a 2017 outlook on March 24.
Hapag-Lloyd said despite the delay, its participation in a new shipping alliance in which shipping lines share vessels and pool runs to various destinations would start as planned on April 1.
"THE Alliance" ties Hapag-Lloyd with NYK, MOL, "K" Line and Yang Ming with UASC, which is due to join later.