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FROM THE MAGAZINE: Zeamarine: The time for acquisitions is over

The Zeaborn Group signed an agreement to acquire the remaining shares of Zeamarine from New Mountain Capital. Sophie Barnes spoke with Zeamarine’s Ove Meyer about the company’s strategy for the year ahead.

Three newbuilds, including Sea Frontier, joined the Zeamarine fleet in January.

The Zeaborn Group is set to take full control of Zeamarine after signing an agreement in April to acquire the outstanding shares in the joint venture.

The initial acquisition last year saw Zeaborn combine the commercial activities of Intermarine – which was owned by Maritime Holdings Delaware, the investment vehicle of New Mountain Capital – with Zeaborn Chartering and Rickmers Line. If approved by the antitrustauthorities, the most recent transaction will see Zeaborn take full ownership of the company.

Ove Meyer, managing partner of Zeaborn, will lead Zeamarine as owners’ representative, following the announcement that Andre Grikitis, the former ceo, had decided to step down from the company in order to pursue other business ventures.

“The market at the moment is still challenging. We have felt some impact from the trade wars, particularly for the steel cargoes. Still, we strongly believe that a solution will be found shortly and then these cargoes will start coming back,” said Meyer. “Volume wise,” he continued, “demand is increasing, particularly for wind energy cargoes.”

Vessels target

Early in the establishment of Zeamarine, the company set a goal of operating 100 multipurpose vessels by early 2019. In January 2019, three newbuilds that were part of a series ordered by Intermarine joined its fleet – Zea Frontier, Zea Fast and Zea Color.

The remaining two vessels in this series are due to be delivered later this year, said Meyer, who explained that the company is getting closer to its 100-vessel goal, with 94 ships in operation.

We are watching the activity on the market; there have been substantial shipping portfolios that have been sold – Nord/LB, for example....

                                                                                                                                               – Ove Meyer, Zeaborn

“By the middle of the year, we should reach that target, largely on a charter basis. We are also watching the activity on the market; there have been substantial shipping portfolios that have been sold – Nord/LB, for example – that have multipurpose units that will become available.

“We are estimating that there will be approximately 15 ships that come onto the market for sale and we will see what secondhand tonnage we can secure but, of course, it will depend on what is available.”

It has been rumoured that Zeaborn has eight multipurpose units on order – six from Hudong Zhonghua and two from Huangpu Wenchong. Meyer explained that these ships are options that have not yet been executed.

With regard to whether the company will execute these options, and its strategy of acquiring new assets in general, he added: “It will be based on demand. If the demand is there, then it will be whether it is the right ship, for theright market and at the right price.”

Outlook

This strategy also broadly applies to the company’s approach to further acquisitions on the corporate side. “At the moment, we are not 100 percent sure whether there will be more acquisitions,” said Meyer. “While there may be potential for partnerships, there will not be as much merger and acquisition activity.”

This is largely because there are not many attractive options on the market, he explained. “There are strong companies that we might look to for partnerships, but the weaker organisations are in a position where they might dissolve.

“We will wait and see whether there are options to consider from potential insolvencies. For now, however, the time for acquisitions is over".

This article is taken from HLPFI's May/June Ships and Supplement 2019 edition.

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