Stolt-Nielsen Buys Jo Tanker's Chemical Tankers
Stolt-Nielsen has agreed to acquire the chemical tanker operations of Jo Tankers. The transaction comprises 13 chemical tankers and a 50 percent share in a joint venture with eight chemical tanker newbuildings.
The 13 chemical tankers consist of eight all stainless steel ships, ranging from 19,000 dwt to 38,000 dwt, and five ships with a combination of stainless steel and coated tanks, all of approximately 37,000 dwt. Six of the 13 ships have been on time charter to Stolt Tankers for the last five years. The newbuildings included in the transaction consist of eight all stainless steel eco-friendly ships of 33,000 dwt on order from New Times Shipbuilding in China, the first of which was delivered in early July 2016. The seven remaining newbuildings are to be delivered in the second half of 2016 and in 2017.
The total purchase price is approximately $575 million, including the proportional share of the newbuildings in the joint venture. Funding for the transaction has been secured through
some of Stolt-Nielsen Limited's main banks with a combination of bridge financing, secured term loans and available corporate funds.
The transaction is subject to competition authority approval, with a decision expected before the end of September 2016.
Commenting on the transaction, Niels G. Stolt-Nielsen, Chief Executive Officer of Stolt-Nielsen Limited, said, “The transaction covers the tonnage replacement needs of our current chemical tanker fleet for the next several years. While giving us some operational savings, it adds new trade routes to our service offering, thus expanding our presence on key trade lanes and enabling us to better serve the needs of our global customer base.
“With the expanded fleet we will be better positioned to serve our customers with the quality, reliability and flexibility they require from their logistical provider. Because Stolt Tankers and Jo Tankers share similar approaches to ship management and trading, we will be able to quickly, cost effectively and synergistically integrate these ships into our worldwide operations.”
With four generations of shipping and three generations of chemical tankers the decision does not come easy to Jo Tankers. “The business environment requires economy of scale, global capacities and increased service flexibility,” said Nils-Petter Sivertsen, CEO of Jo Tankers. “In each of these areas Jo Tankers has reached the limit of our capabilities. The move from regional partner to global player would require a partner who shared our values and long term thinking. We are proud that a quality company like Stolt wanted to purchase our business”