Chile's Vapores sets $570 plan to buy 7 container ships, prepay debt

SANTIAGO, April 4 Thu Apr 4, 2013 10:12am EDT

SANTIAGO, April 4 (Reuters) - Chilean shipper Compania Sud Americana de Vapores said it would spend $570 million to purchase seven container ships and prepay debt, and it will seek shareholder approval for a capital increase.

Vapores will buy the ships from South Korea's Samsung Heavy Industries to replace leased vessels and boost its wholly owned fleet to 55 percent from 37 percent currently, the company said late Wednesday.

The new ships will start arriving in late 2014, and Vapores has the option to purchase an additional seven.

Vapores' board will seek shareholder approval on April 29 for a $500 million capital increase to finance the investment plan.

The board also approved the prepayment of $258 million in debt with American Family Life Assurance Co.

In recent years, Vapores has faced steep losses as it grapples with lower shipping rates, high fuel prices and expensive leases.

Under the stewardship of the business-savvy Luksic family Vapores spun off its SAAM storage and logistics unit in 2012 as part of a plan to reverse those losses.

The Luksic family, Chile's richest, became Vapores' majority shareholders in early 2012 when the company completed a $1.2 billion capital increase.

Vapores' shares were down 1.3 percent Thursday morning, while the IPSA blue-chip index was up 0.3 percent.

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.