Eitzen Maritime Services has sold its ship management activities to Bermuda-based Sanary for NKr24m and will concentrate on its ship supply business, further developing its position as the global industry leader.
EMS’ ship management division currently operates a total of 48 vessels on technical management and/or crewing contracts. The divestment reflects EMS’ strategy of concentrating on its ship supply business going forward.
The sale is expected to be completed in August 2010 and will represent a negative effect of approximately $3.5 million in EMS’ third quarter results.
EMS has issued a seller’s credit due for payment no later than 1 March 2011. The seller’s credit will be settled by cash or EMS shares currently owned by Sanary. Should the buyer choose to settle in EMS shares, the consideration is fixed to approx. 34m EMS shares. EMS also has a call option on the same amount of shares at the same price.
“We are pleased that we have succeeded in passing our ship management operation on to new and professional owners. We believe that the transaction will benefit the customers as well as the seafarers on board. The sale enables EMS to fully concentrate management and financial resources on further developing our ship supply business,” said Annette Malm Justad, CEO of Eitzen Maritime Services.
The ship management operations currently represent less than 4% of EMS’ total sales. As a result of the international shipping crisis, the ship management division has experienced reduced volumes and margin pressure in 2009 and 2010. EMS has during the last two years restructured the division, including a reduction in the number of operational hubs from six to the two remaining hubs in Singapore and India.
Over the last three years, ship supply has been EMS’ primary focus. The group has evolved into the world’s largest provider of ship supply services, following acquisitions in Europe and the Middle East. EMS currently has operations in more than 60 ports worldwide. Annual sales are approaching $500m, reflecting a balanced portfolio covering a number of different market segments.