German container shipper says $8bn deal not at risk despite postponement of completion to May 31
German container shipper Hapag-Lloyd on Friday postponed the completion date for its takeover of United Arab Shipping Company (UASC) to May 31 from March 31, but said the deal, worth 7 to 8 billion euros ($7.52-8.60 billion), was not at risk.
All merger clearances and regulatory approvals and all necessary banking approvals from Hapag's side have been obtained as have most banking approvals from Dubai-based UASC’s side, it said.
Delays in finalising a deal set to create one of the world's largest shipping lines have been blamed on financing issues stemming from the shipping sector's prolonged downturn.
Many banks have cut lending to the industry, where freight rates fell 15.4 percent in 2016.
Hapag-Lloyd reported a 66 percent fall in 2016 operating profit. It is scheduled to publish full results and a 2017 outlook on March 24.
Hapag-Lloyd said despite the delayed closing date that its participation in a new shipping alliance in which shipping lines share vessels and pool runs to various destinations would start as planned on April 1.
Dubbed "the Alliance," the tie-up binds Hapag-Lloyd and several Asian competitors with UASC due to join later.
Shares in Hamburg-based Hapag-Lloyd were down 0.2 percent at 30.2 euros, having hit an intraday low of 29.5 after the announcement.