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JAKARTA—PT Berlian Laju Tanker, Indonesia’s biggest
shipping company by market value, may acquire a company
in Europe to expand its fleet and move into markets
outside Asia.
Berlian
will raise about $50 million, or 5 percent of its
equity, selling new shares to help finance expansion,
said Kevin Wong, the company’s finance director. He
didn’t say which companies Jakarta-based Berlian is
interested in buying or how much an acquisition will
cost.
“We want
to grow faster, and one way to do this is through
acquisition,’’ Wong said in a May 22 interview in
Jakarta.
Berlian isn’t yet in talks with any companies, he said.
Mergers
and acquisitions have become an attractive way for
tanker owners to expand as the cost of new ships has
risen to records. In April, Teekay Shipping Corp., the
world’s largest tanker company by market value, and D/S
Torm A/S paid $1.98 billion for rival OMI Corp.
“There
may be some advantages by buying into the market and it
is a way to kick start growth,’’ Michael Nielsen, an
analyst with Silkeborg, Denmark-based Jyske Bank A/S,
said in a telephone interview last week.
Berlian
plans to invest $500 million within a year to fund its
expansion after profits rose 11-fold in the last five
years. The company currently operates 61 oil, chemical
and gas carriers and has a market value of 8,107 billion
rupiah ($920 million).
The cost
of building a tanker able to carry 30,000 tons of
gasoline and other fuels has risen 21 percent since the
end of 2004 to a record $48.5 million, according to
London-based shipbroker Clarkson Plc. Economic growth in
Europe may make an acquisition in the region attractive,
said Felix Sindhunata, head of research at PT Mega
Capital Indonesia, said on May 23.
“The
European economy is doing better than the US economy, so
consumption there is growing,’’ he said.
Europe’s
economy expanded more than forecast in the first
quarter, bolstered by corporate investment. The economy
of the 13 nations that share the euro grew 0.6 percent
from the fourth quarter, said the European Union’s
Luxembourg-based statistics office on May 15.
Berlian
may fund an acquisition in
Europe using proceeds from the bond sales or seek new debt, Wong
said.
Berlian
last month raised $400 million in seven-year bonds and
it plans to sell 600 billion rupiah of five-year debt in
June. Last week, it completed a $125 million sale of
bonds that can be converted into shares to fund
expansion.
Last
year, Berlian was close to an acquisition in Europe,
Wong said. The company failed to secure a deal because
of the way it approached the target, he said without
elaborating.
“We
learned something from that,’’ he said. The shipping
outlook remains strong for the next three years because
of a shortage of vessels, Wong said. Berlian is looking
to expand in the Middle East, where it has about 4
percent to 5-percent share of the chemical market, he
said. The chemical market in the Middle East may rise by
18 million tons, or 80 percent, to meet demand mostly
from
Asia, he said.
The
company is also considering shipping edible oil from
South America and chemical products from Australia, he
added. Shares of Berlian price fell 20 rupiah, or 1.0
percent, to 1,930 as of the midday break in Jakarta. The
shares have risen 11 percent this year.
--Bloomberg |
