18 August 2009

Chile's Vapores and Samsung Heavy Reach Deal on Ship Contracts

By Nathan Gill
Aug. 18 (Bloomberg) -- Chile’s Cia. Sudamericana de Vapores SA, Latin America’s largest container ship company, reached an agreement with Samsung Heavy Industries Co. to change its ship-building contracts.

Vapores, as the company is known, will buy five ships worth a total of $625 million from Seoul-based Samsung Heavy, the world’s second-largest shipyard, instead of the four bigger ships the company planned to purchase for $644 million, Chief Executive Officer Juan Antonio Alvarez said today in a statement posted on the country’s securities regulator’s Web site.

The Valparaiso, Chile-based company is renegotiating contracts with suppliers and bondholders as the global recession saps shipping demand at a time of increased supply of vessels. It reported a $147 million net loss in the second quarter, its fourth straight quarterly decline, according to Bloomberg data.

Vapores also said it reached an agreement with a group of banks, including BNP Paribas, to finance the cost of the new ships as well as two of the three ships being built by CSBC Corp., Taiwan’s largest shipbuilder formerly known as China Shipbuilding Corp., according to the statement. The financing contracts have yet to be signed, Vapores said in the statement. The new ships are scheduled for delivery by the beginning of 2012.

The Latin American shipper rose 0.7 percent to 440.5 pesos in Santiago trading, its highest price since June 2.