MSC Buys Moby Ferries Sold to Pay Debt to Aponte Group

 

The online auction for five ferries owned by Italy’s Moby Lines was completed with an odd turn of events. The five ships were being sold to repay a debt owed to the Aponte’s who own MSC Mediterranean Shipping, and the buyer of the ro-pax ferries was MSC. The sale was part of a settlement reached between the companies to avoid antitrust issues, with the proceeds being used to repay a loan made by MSC to Moby to save the ferry company from bankruptcy.

The sale is the latest step between the companies that dates back several years. Moby is controlled by the Onorato group and got into financial trouble after mergers and other operational problems. MSC had reached terms with the Onoratos to acquire 49 percent of Moby and to provide a loan valued at €243 million. MSC also had an option to acquire the remaining interest in Moby.

The Italian Competition Authority, however, ruled that there were competition concerns in the consolidation of Italy’s RoRo passenger-freight ferry business. MSC owns ferry operator Grandi Navi Veloci (GNV), and the competition authority cited the lack of competition and barriers for others to enter the market. The settlement agreement called for MSC to relinquish its shares of Moby and for the sale of five vessels to repay the debt.

In an online auction completed on December 2, there was a sole bidder for the vessels Moby Aki and Moby Wonder, operated by Moby, and Moby Ale Due, Athara, and Janas, operated by Moby subsidiary Tirrenia. Shipping Italy is reported the bidder was MSC Group’s SAS subsidiary, which was also the holder of the debt.

The auction was completed at €229.9 million ($268 million). The proceeds will repay most of the debt, with the agreement calling for the remainder to be sold to a third-party, which would manage the debt under conditions to maintain Moby’s economic and financial stability.

The auction terms also stipulated that the two newer vessels, Moby Aki and Moby Wonder, must be chartered back to Moby for a period of 15 years. Shipping Italy speculates the other three vessels will be consolidated into GNV’s fleet. There are also concerns about the seafarers who would lose their jobs as Moby downsizes, but it is believed they will also transfer to MSC to maintain their employment.

Moby said after the terms of the agreement were announced that it would be restructuring its operations. It emerges with a greatly reduced debt, and said plans call for strengthening and reorienting the business model. Most of the consolidation was predicted for services to Sardinia.

The antitrust decision represents a rare setback for MSC, which has been moving aggressively to expand its operations. In addition to the acquisition and construction of containerships, the company made investments in logistics and rail services, launched air cargo, and acquired Gram Car Carriers. The group is also expanding its ports and terminal operations, including a large investment in Hamburg, Germany, and was set to become a leading terminal operator in a deal with BlackRock to buy the international terminal operations from Hutchison. MSC is now the world’s largest container carrier, having topped 7 million TEU of capacity, which makes its TEU capacity 50 percent larger than Maersk.