Taiwanese container carrier Yang Ming Marine Transport denied rumors for possible merger with another operator, expecting that the crisis in the global industry of container transport will decline in 2017. During a press conference the chairman of Yang Ming Bronson Hsieh said that company never considered the possibility of merging with another operator and does not intend to do it now. He noted that in the past 10 years, the top five most profitable shipping companies were relatively small operators. But small player does not necessarily become stronger, concluded Bronson Hsieh.
The statement of Yang Ming chairman was made in response to questions relating to the rapid consolidation in the industry in a protracted crisis. Last year, there were major developments in shipping market, as CMA CGM Singaporean carrier acquired APL, China’s largest shipping corporations CSCL and COSCO merged and the South Korean Hanjin Shipping bankrupted.
In 2017 assumes the completion of the three mergers – Hapag Lloyd and UASC, Hamburg Sud and Maersk, as well as container operations of the Japanese K Line, MOL and NYK.
Meanwhile, Drewry Financial Research Services described Yang Ming, as the container line with the greatest financial danger. According to the analyses the line has the industry’s most leveraged balance sheet, with a net gearing of a massive 437% at the end of Q3.
“Yang Ming’s high debt is a great cause for concern for us, given the heightened financial risks. Even with recovery in the underlying freight market, the debt burden without a restructuring is a red flag and a clear sell signal for us”, says the report of Drewry Financial Research Services. “The carrier’s high cost structure, combined with its debt mountain, will keep Yang Ming in the red in 2017”, adds the report.
Yang Ming Marine Transport Corporation is an ocean shipping company based in Keelung, Taiwan. The company is world’s ninth largest container carrier, operating a fleet of 85 vessels with a 4.2 million DWT and operating capacity 346,000 TEU.