Kohlberg Kravis Roberts & Co.
) announced the purchase of a shipping portfolio containing nine
feeder container vessels in partnership with Borealis Maritime in a
deal coordinated by the German bank Commerzbank AG (
). The financial terms of the deal were not divulged by the
Kohlberg Kravis will finance this deal through some of its managed
funds and accounts as well as through its special situations fund,
which provides capital to back up the long-term investment required
in shipping assets.
The shipping fleet, originally financed by Commerzbank, was earlier
under the possession of several German KG funds.
KKR & Borealis Maritime's Affiliation
With the intention to invest in troubled shipping assets, Kohlberg
Kravis entered into a joint venture with Borealis Maritime last
year. This strategic alliance, known as Embarcadero Maritime, has
bought total 27 vessels since its inception through 9 different
transactions including the latest deal.
Moreover, Embarcadero Maritime's $100 million investments to date
comprise a mix of chemical tankers, feeder container vessels and
small LPG vessels. This collaboration has helped both the companies
to capitalize on the emerging opportunities triggered by a low
phase prevalent in the shipping industry.
Kohlberg Kravis looks forward to increase investments in the
distressed German shipping space by providing a viable way out to
lenders - mainly German banks - who want to trim down their
Commerzbank's Rationale Behind the Sale
This deal comes under Commerzbank's plan to exit the shipping
finance unit which it declared in June this year. The third biggest
maritime lender in world intends to focus on other profitable
businesses rather than the European shipping industry, which is
struggling to meet operating costs. Moreover, the weakening
container vessels unit constitutes a major portion of the KG funds
as well as German shipping bank portfolios.
Additionally, financial institutions will have to conform to
stricter regulations from the European Central Bank, which is
expected to take over direct supervision of about 130 euro-area
banks such as BNP Paribas SA (
) and National Bank of Greece SA (
) at the end of this year. This will aggravate the problem further
by making loans costlier for the shipping companies.
Other Simultaneous Acquisition by KKR
Kohlberg Kravis is on the verge of taking over full control of
German cutlery and automated coffee-machine maker WMF by acquiring
more than 90% stake in the company.
Stakeholders of WMF tendered 74.7% of preference shares for €58 per
share to Kohlberg Kravis. The buyout company, which already holds
72% of WMF, will become a major stakeholder of its target firm
after considering the interests of WMF's co-owner Andreas
Weissenbacher - who has agreed to sell his stake to Kohlberg
Further, Kohlberg Kravis looks ahead to delist WMF from the
Frankfurt stock exchange and drive out the minority
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