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2 Jul, 2010
Eitzen Maritime Services ASA (OSE: EMS) today announced that the Company has entered into an agreement to divest its ship management activities. The sale enables EMS to focus mainly 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 ship management operations will be acquired by Sanary Ltd of Bermuda and total consideration for the business is NOK 24 million. The sale is expected to be completed in August 2010 and will represent a negative effect of approximately USD 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. 34 million 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 four per cent 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 USD 500 million, reflecting a balanced portfolio covering a number of different market segments.
Going forward, EMS will continue to improve and expand its ship supply business, further developing an unprecedented offering in the ship supply industry.
The sale of the ship management activities is subject to approval by EMS' general meeting, to be convened on 27 July, 2010.
Eitzen Maritime Services ASA
