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Chilean shipping lines raise capital to buy ships

Chilean shipping lines raise capital to buy ships
Santiago: Chilean shipping lines Compania Sud Americana de Vapores (CSAV) and Compania Chilena de Navegacion Interoceanica (CCNI) have both approved fleet renewal programmes and proposed capital increases to their shareholders capital to partly finance purchases of newbuildings.

CSAV announced two days ago that its board of directors had agreed to raise an additional capital of $500m to reduce its financial debt and repay some of its loans.

Early last month, CSAV controlled by the powerful Luksic group, approved an investment plan of $570m that will allow the acquisition of seven ships. The company has ordered seven 9,300 teu boxships from South Korea's Samsung Heavy Industries (SHI). The company will receive the ships from the end of 2014 and they should replace some of the ships under chartered terms, increasing the company own fleet to 55% up from the present 37%. As part of the capital increase, CSAV plans to sell 6.75bn new shares.

Meanwhile CCNI, that is part of the Chilean Empresas Navieras Group controlled by the Urrenda family, hit the market in November last year. The liner company launched a plan that involved the purchase of six modern post-panamax vessels, with a nominal capacity of 9,000t eu, each at a cost of $86m or $515m in total.

An estimated percentage of 40% or 50% of its own fleet gives stability to the company, says Chilran Shipowners Association’s, Arturo Sierra. Those investments keep in mind the future Panama Canal expansion that will allow the arrival of ships with greater capacity and with the commercial advantage that means, which is why the Chilean liners are investing in larger ships, Sierra explained.

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