Joint venture targets China maritime sector with US$900m play

PUBLISHED : Tuesday, 15 March, 2011, 12:00am
UPDATED : Tuesday, 15 March, 2011, 12:00am

China's maritime industry is being targeted by a group of entrepreneurs who have teamed up with the Carlyle asset management group to launch a joint venture that aims to invest up to US$900 million in ships and shipping businesses.

Carlyle spokeswoman Dorothy Lee said the venture would leverage bank financing to acquire more than US$5 billion worth of tankers, container and dry bulk ships and other shipping assets.

Graham Porter, chairman of Hong Kong's Tiger Group Investments, said the scope of the venture was 'very broad' and could acquire 'any marine assets and or companies'. He said the so-far unnamed venture would focus on two areas.

The first would cover the purchase of container ships that would involve Seaspan Corporation, a Vancouver and Hong Kong-based company which owns 57 container ships, with another 12 under construction, some of which are chartered to mainland operators Cosco Container Lines and China Shipping Container Lines.

The second would cover other ship types including dry cargo bulk carriers or tankers and the purchase of shipping companies.

Porter said Seaspan, which he also helped form, would only be involved in container ship investments.

The other partners involved in the venture, including the Tiger Group, Canada's Washington shipping family and another Seaspan co-founder, Gerry Wang, would invest in other ship types and marine assets.

Seaspan Corporation, which is investing up to US$100 million of the US$900 million total over the next five years, has the right of first refusal to be involved in container ship investment opportunities that are taken on by the joint venture company.

Linked to the launch of this new company, Seaspan said it had inked a letter of intent with a 'leading Chinese shipyard for a significant order of new panamax 10,000-teu (20-foot equivalent teu) vessels', although there were no details of when an order could be confirmed.

'There is increasing desire among Chinese state-owned entities to control the ships that transport their goods around the world,' Wang said.

The launch of the venture came about nine months after Tiger Group Investments formed SeaTiger Capital, a venture capital outfit, with New York-listed Seacor Holdings, to invest around US$100 million in the offshore and shipping sectors. Porter said there was no connection between SeaTiger Capital and the latest venture with Carlyle.