Chilean Shipping Firm Vapores Won't Go Bankrupt -Executive
25 Marzo 2011 - 6:03PM
Dow Jones News
A high-level executive at Latin America's largest shipping
company in terms of revenue, Chile's Compania Sudamericana de
Vapores SA (VAPORES.SN), said the company won't go bankrupt despite
recent financial troubles that have led to market speculation it
could fail.
Vapores, whose finances have been weighed down by hefty ship and
container leasing fees, as well as rising international crude oil
prices, is looking to stanch its financial hemorrhaging through a
$500 million capital increase and the listing of up to 49% of its
SAAM ports unit. The SAAM stock market listing is expected to fetch
another $500 million.
"Vapores going bankrupt is an option that can be completely
dismissed," Vapores Vice President Arturo Claro told Dow Jones
Newswires. "The main reason behind Vapores' crisis is basically
that it doesn't have enough capital for its volume of operations,"
said Claro, a member of the family that controls the company.
The company's shares had plummeted 57% this year as investors
fretted over its deep financial problems which led to the
resignation of the president of its board of directors.
Earlier this week, the local Luksic family, which controls
London-listed mining company Antofagasta PLC (ANTO.LN), brewer
Compania Cervecerias Unidas SA (CCU, CCU.SN), and Chile's
second-largest bank Banco de Chile (BCH, CHILE.SN), bought a 10%
stake in Vapores for $120.3 million, leading to a 30% surge in the
share price.
The Luksic family "will be of great value to the future
development of the company," Claro said.
The Luksic purchase, plus a planned $66 million capital increase
by holding company Maritima de Inversiones SA (MARINSA.SN), which
is controlled by the Claro family and has a 38% controlling stake
in the shipping firm, will help "seal the success" of Vapores' $500
million capital increase, Claro said.
Analysts agree that the Claro family, through its holding
company, will now be able to subscribe to the $500 million capital
increase.
"While the Claro family had hinted before that Marinsa would
subscribe to its share of the next capital increase, this solves
the mystery about the funding," local investment bank Celfin
Capital said.
The shipper isn't in the clear yet, however, and may face losses
of nearly $100 million in the first quarter as it needs to meet
leasing payments of some $435 million this year and $2.55 billion
over the next five years.
"Nearly 85% of the ships Vapores has are leased, while its
competition leases about 60% of the ships they use," local
brokerage EuroAmerica said.
With the $1 billion Vapores expects to garner through the
capital increase and the SAAM listing, "we're going to have ships
built, which will replace a large part of the ships we currently
lease, thus greatly reducing our variable operation costs," Claro
said.
Vapores will also use the funds to buy containers, which are
expensive to lease, he added.
Claro points out that in the first quarter of 2010 Vapores
posted a loss of $38.4 million, but ended the year with a net
profit of $170.8 million as shipping traffic generally picks up
after March.
-By Anthony Esposito, Dow Jones Newswires; 56-2-715-8929;
anthony.esposito@dowjones.com
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