The takeover of American President Lines (APL) by Neptune Orient Lines (NOL) has hit its first regulatory hurdle, forcing APL to suspend its application for US Government approval. APL blamed the move on red tape, and insisted that it neither jeopardised the state-owned Singaporean carrier's bid, nor threatened to delay it beyond the expected completion this autumn, according to a Lloyd's List report. Industry observers have been predicting such hitches since the US$825 million deal was announced in April. The news would increase fears that the deal was unlikely to proceed without considerable modification, the Lloyd's List report said. The problem has arisen under what is known as the Exon-Florio process - a statutory provision that foreign acquisitions of US companies must go before a committee made up of no less than 12 federal agencies where there are national security implications. APL is integral to the US military sea-lift effort and receives subsidies and tax breaks for flying the American flag - state support which is conditional on ownership by a US citizen. Given that NOL is Singaporean, APL has to devise a formula that will leave subsidised ships under US control, at least formally. It had been assumed that leaving the Oakland-based company under its own name and existing management would suffice. The deal also will need approval from the US Maritime Administration.