. . . as Maersk announces SCL purchase
HALF A sale was better than none.
That may have been the feeling amongst the Safren board as they disposed of Safmarine Container Lines (SCL) - and all its trade names and other liner-related businesses - for what international financiers were quoted as terming the reasonable sum of US$240-million (more than R1.45-billion).
The buyer, Denmark's AP Moller group - parent of the huge Maersk Line - has also assumed US$115-m (almost R696-m) of debt.
This part of Safmarine will, according to AP Moller, go happily sailing to the far horizon with new owners - still dressed in Safmarine colours; flagged with the SA flag where locally registered; and no changes in the administrative structure as it currently stands.
That's about 50 ships and approximately 80 000 containers in the SCL network - covering a total of 10 trades. It is also the international agency network for SCL and its subsidiary service names - Saflink in SA; Zimbabwe Shipping Services north of the border; Aseco for most of the North West Continent (including UK); SCL France; and Gulf & Atlantic Maritime Services in the US. The Far Eastern agency functions are all third-party, partner agencies.
However, there is the news from AP Moller that Maersk and SCL will co-ordinate their respective line networks.
This is, according to Safren spokesmen, half the business sold since the for sale sign went up at Safren House on November 9.
But - with arithmetic inaccuracy - FTW asks: Is it the bigger half, or smaller half?
Although Safren's chairman Buddy Hawton had expressed himself keen to sell the Safmarine package as a whole - even pulling out SCL has still left a considerable amount of other interests.
Safmarine also had its SafBulk, bulk shipping operation - which is currently operating a fleet of 10 bulk vessels and three multi-purpose ships, some owned, some chartered.
There is also the 60-40 joint venture with Iscor in the other bulk shipping operation, SafOre - which also operates a fleet of owned and chartered vessels trading worldwide.
This combined bulk division contributed 10.36% of Safmarine's operating income in the last financial year.
Safmarine's reefer operation is conducted through Unicool - a 50:50 joint venture with Leif Hoegh & Co of Norway. It is the largest conventional reefer operation in the world - operating over 70 owned and chartered ships. It contributed 19.35% of Safmarine's operating income.
Add those two sections together, and you get 29.71% of the total operating income earned by the line in its old form. This compared to SCL's 33.45% contribution.
But still more is up-for-grabs - and no valuation has been affixed to these other interests.
There is a 50% share in Pentow Marine - the tug towage and salvage specialists, jointly owned with Murray & Roberts.
Also, there is a 40% share in Unicorn - the local coastal feeder service and tanker charter business - with Grincor group the controlling shareholder.
Martin McWilliam of ING Barings - the financial advisers to Safren - has suggested that they again want to sell this other half as a single package to a single buyer. How much it is worth is not revealed, but it has been suggested to FTW in the past that Safmarine as an entire entity was worth between US$450-m and US$500-m. If this is the case, that half is about that.
But one final question. If Safren has sold the Safmarine trade mark and/or brand name to AP Moller - What is this other half going to be called?
By Alan Peat
