By Aiswarya Lakshmi
Thursday, August 25, 2016, 3:39 AM
United Arab Shipping Company (UASC), which is close to merging with Hapag-Lloyd, revealed enormous deficits and a massive debt in its key financial figures, says Alphaliner.
The first-time revealed UASC financial figures uncover more than $4bn of debt incurred during a major fleet expansion program and a net loss of $384m last year, were described by analyst Alphaliner as “UASC’s dismal financial performance laid bare”.
Revenues for the last year reached $3,318M. These figures were provided by Hapag-Lloyd as part of the disclosures for an upcoming Annual General Meeting, scheduled to be held in Hamburg at the end of August.
UASC’s poor financial performance has continued in 2016 with an operating loss of -$132 M and net loss of -$201 M on revenues of $1,532 M in the first six months of this year.
UASC’s financial records have been a commercial secret until now as it was a private company. Its total financial debts as at June 30, 2016 were $4.06bn against an equity base of just $1.89bn.
At this occasion, the German carrier is seeking shareholders’ approval to amend its capital structure to complete a planned merger with UASC.
UASC’s equity position fell short of the minimum threshold of $1,950 M that was agreed with Hapag-Lloyd under the terms of the planned merger. This could mandate a compensatory payment by UASC shareholders at the time of merger’s completion.