Bruce Barnard | Oct 06, 2009 10:01AM EDT
Berlian Laju Tanker, Indonesia's biggest shipping line, will become the world's leading operator of chemical tankers if its planned $174 million takeover of Norway's Camillo Eitzen [CECO] goes through.
The deal, announced Monday, hinges on several conditions including BLT raising $200 million in a private placement of new shares.
The board and main shareholders of CECO accounting for 76 percent of its stock support BLT's offer.
The takeover, which is subject to successful due diligence and the agreement of CECO's lenders, will give BLT control of Eitzen Chemical, an Oslo-listed chemical tanker operator that is 52 percent owned by CECO.
BLT expects to make an indicative offer in mid-November and plans to close the deal by the end of the month
Including ships on order, the combined company would control a fleet of 157 chemical tankers, overtaking the 150 ship fleet of Norway's Stolt-Nielsen.
The merged company also would control 14 crude oil tankers, 42 gas tankers, between 50 and 60 bulk carriers and an oil drilling vessel. The two companies generated revenue of $2.3 billion in 2008.
BLT's move into Europe comes two years after it acquired U.S.-based Chembulk Tankers for $850 million.
The chemical tanker market has been hit by falling traffic and an estimated 20 percent decline in average vessel earnings in the past year.
Contact Bruce Barnard at brucebarnard47@hotmail.com.