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Stolt-Nielsen buying Jo Tankers chemical carrier operations for $575m

Stolt-Nielsen buying Jo Tankers chemical carrier operations for $575m
Stolt-Nielsen is buying out Jo Tankers chemical tanker operations for $575m, including its stake in a joint venture owning newbuildings.

Shipowner Stolt-Nielsen said it was acquiring Jo Tankers’ chemical tanker operations, comprising 13 chemical tankers and a 50% stake in a joint venture with eight newbuildings for $575m.

The fleet comprises eight all stainless steel ships, ranging from 19,000 dwt to 38,000 dwt, and five ships of roughly 37,000 dwt with a combination of stainless steel and coated tanks. The newbuildings are eight 33,000 dwt all stainless steel vessels order at New Times Shipbuilding in China. The first newbuild was delivered in July and the remainder will be delivered through H2 2016 and 2017.

"The transaction covers the tonnage replacement needs of our current chemical tanker fleet for the next several years. While giving us some operational savings, it adds new trade routes to our service offering, thus expanding our presence on key trade lanes and enabling us to better serve the needs of our global customer base,” said Niels G. Stolt-Nielsen, ceo of Stolt Nielsen.

Six of the 13 vessels on the water have been chartered to Stolt-Nielsen for the last five years.

“Because Stolt Tankers and Jo Tankers share similar approaches to ship management and trading, we will be able to quickly, cost effectively and synergistically integrate these ships into our worldwide operations," Stolt Nielsen added.

Mewanwhile Jo Tankers said Stolt-Nielsen had emerged as the best buyer after as the "best buyer" after an open international process. “The business environment requires economy of scale, global capacities and increased service flexibility.  In each of these areas Jo Tankers has reached the limit of our capabilities," said Nils-Petter Sivertsen ceo of Jo Tankers.

"The move from regional partner to global player would require a partner who shared our values and long term thinking.  We are proud that a quality company like Stolt wanted to purchase our business”

The sale would leave Jo Tankers with a fleet of four LR tankers, and two LR newbuildings on order. Headquartered in Bergen, Norway, Jo Tankers also has offices in Singapore, Manila, Rotterdam and Houston.

Stolt-Nielsen is funding the acquisition through a combination of bridge financing, secured term loans and available corporate funds from some of its main banks. The transaction is subject to competition authority approval, which it expects by end September.