UASC stands to benefit most by NOL purchase - analysts

UASC singled out as best-placed to buy failing NOL line, which offers young fleet at attractive price in depressed market.
UASC's Barzan is the first LNG ready container ship of her size in the world.
UASC's Barzan is the first LNG ready container ship of her size in the world.

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United Arab Shipping Company (UASC) has been singled out as a potential buyer of the troubled shipping line Neptune Orient Lines (NOL), which is to be sold by Singapore state investor Temasek Holdings.

According to analysts, the carrier, which has made a loss of US $1-billion over the last four years, represents an opportunity for shipping lines with financial clout to aquire a modern fleet with a 2.8% market share of global container trade.

The shipping line will reportedly be offered for US $2-billion, which analysts say is well below its market value due to the timing of the sale, during a severe prolonged downturn for the global container shipping industry.

The global sector's debt has nearly doubled to $86 billion over the past decade, Rahul Kapoor, Singapore director of Drewry Equity Research told Reuters, with spot Asia to Europe and transpacific container freight rates near six-year lows.

Industry sources say Qatar-owned United Arab Shipping Company (UASC) can be expected to join the likes of Germany's Hapag-Lloyd AG HOLG.UL and Hamburg Sud in considering a purchase of NOL.

UASC is currently undertaking one of the most ambitious expansion programs in the industry, with eleven newbuild 15,000-teu and six 18,800-teu vessels scheduled to be fully delivered by 2016. This year, UASC will receive a total of 10 new vessels.

The Middle East shipping line declined to comment. This is not the first time the shipping line has been at the centre of rumours of a carrier acquisition. In May it was reported that the line may be considering a purchase of embattled APL Line.

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