Icelandic North Atlantic container and reefer carrier Eimskip is facing a takeover from the Los Angeles-based holding company Yucaipa, which will save 1,500 jobs and cut its debt from US$2.24 billion to $140 million.
Eimskip CEO Gylfi Sigfussion said the $2.2 billion restructuring will involve a 32 per cent stake for Yucaipa and 45 per cent for Icelandic bank Landsbanki. "I believe that this is a vital step in the process to resurrect Eimskip and offers the best outcome available to all the creditors of the group," he said.
Following losses of $54.3 million after tax in the first quarter, the carrier has admitted defeat and plans to quit the cold storage business, leaving the company with a healthy bank balance, reports the Journal of Commerce Online.
The Yucaipa stake in the "New Eimskip" is controlled by investor Ron Burkle. He also holds 49 per cent of a $1 billion acquisition in Canadian cold storage company Versacold Atlas. The option is open to retain the remaining share of the company to add to its portfolio, which includes another cold storage company, US Americold Realty Trust.
Mr Burkle is also to take over a secured loan from Dutch bank ABN Amro amounting to $168 million.
Although the carrier announced $300 million year-on-year losses in the second quarter results compared to $141 million lost in the corresponding quarter of 2008, improved operations has resulted in the company starting new shipping and logistics company.
Iceland's biggest shipping line consolidation included the sale of its Euro Container Lines in October securing a buyer of Wilson ASA for its 50 per cent share. This year, it sold Helsinki-based Containerships at a loss of $31 million for its 65 per cent stake.
By slicing off capacity in the sale of three reefer vessels to Atlantica Shipping of Norway, it cut debt by $42 million, but ended up with a net loss of $246 million. Its services continue to be run through Eimskip, Eimskip-CTG, and Faroe Ships, the Shipping Gazette reported.
Source: Transport Weekly
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