Will fewer vessels be scrapped?

Because of the value of the Indian Rupee, the incentive to scrap ships has declined.

This from Hellenic Shipping News

Oversupply pressures both in the dry bulk and the tanker markets, as well as in the container business are calling for a much slower newbuilding ordering activity during 2012. An additional factor expected to put pressure on shipyards is the lack of financing for many companies, especially those operating from the European continent. Meanwhile, as the year draws to a close, it’s worth noting that during the past week, the newbuilding pace was once again very slow, especially in the dry bulk and tanker markets.
According to the latest report from Piraeus-based shipbroker Golden Destiny, “Hyundai Heavy Industries announced that it signed a $900 million order to provide offshore platforms and other facilities off the coast of Africa. Under the deal, Hyundai Heavy Industries will build two offshore gas platforms in Nigeria by the end of 2014. In addition, Israel Land Development Company Energy is said to have signed an agreement of cooperation and development with DSME E&E, an energy related subsidiary of South Korea’s Daewoo Shipbuilding and Marine Engineering for the construction of a floating LNG facility at the Myra and Sarah has fields’ offshore Israel” said Golden Destiny.
The shipbroker also noted that overall, the week closed with 18 fresh orders reported worldwide at a total deadweight of 454,600 tons, posting a 49 % week-onweek decline, standing at similar weekly levels of 2010, when 17 orders had been reported worldwide with 7 newbuilding transactions in the bulk carrier segment. In terms of invested capital, the total amount of money invested is estimated at region more than $656 mil with 72% of the total number of orders being reported at an undisclosed contract price.
“In the bulk carrier segment, Safe Bulkers of Greece is said to have placed a panamax order of 74,500 dwt in an undisclosed Japanese yard for delivery in 2014. In the handysize segment, Belgian shipowner, Bocimar N.V. has placed an order for six plus 36,000dwt units in Weihai Samjin of China, plus an option for four more units, with delivery in 2013-2014.
In the offshore segment, notable order of this week has been the placement for the construction of an accommodation semisubmersible rig by the world’s largest owner and operator of accommodation and service rigs, Prosafe. The unit will be built by Jurong Shipyard, subsidiary of Singapore rig builder Sembcorp Marine at a cost of $291,6 mil for delivery in 2q 2014, with an option for another two units” concluded the shipbroker’s report.
In a separate note on the demolition market, Golden Destiny said that “the weak Indian rupee against the US dollar has dropped scrap levels at the lowest point for this year. India offers $450/ldt for dry/general cargo, same levels of the end 2010, with Pakistan being in the first rankings and China trying to compete at levels xs $400/ldt. In the wet market, levels remain below $500/ldt with Pakistan paying $480/ldt, but with lack of success as no units were secured. In Bangladesh, the market remains closed till the next court hearing on January 12th with mixed feelings for a reopening of the industry earlier than the end of January. What is noteworthy are market rumors suggesting the disposal of one more double hull VLCC built 1994 from BW group following the example of Mitsui OSK Lines. In the dry market, one more capesize of 173,028dwt built 1984 reported for scrap in India at $475/ldt, bringing the tally of capesize units reported for scrap this year at more than 20 units, whereas in 2010 only 3 capesize vessels had been reported for scrap.

The Fight is On

All containership carriers are losing money.

Maersk stated they would not lose market share, which we can guess only means
they won't be pushing to raise rates.

So the other carriers are getting together and forming joint services (Vessel Sharing Agreements, VSA's), to at least save some money.

The latest one is Hamburg Süd and MSC

Here is the press release from Hamburg Süd

Hamburg Süd and MSC fuse Mediterranean – South America East Coast Services



Hamburg, 22 December 2011. In view of continuous poor trading conditions and replacing its current service set up, effective from mid January 2012 Hamburg Süd and MSC will restructure their services between the Mediterranean and South America East Coast. The two currently separate services will be fused into one common service that will be operated by eight vessels of 5,900 TEU nominal capacity. Of those, Hamburg Süd is to provide initially one vessel and MSC seven vessels.



The new port rotation will be as follows: Valencia – Gioia Tauro – Livorno – Genoa – Fos – Barcelona – Valencia – Suape – Rio de Janeiro – Santos – Buenos Aires – Montevideo –Rio Grande – Navegantes – Itapoá – Santos – Rio de Janeiro – Suape – Tangier – Valencia.



The new service allows for more comprehensive port coverage in South America and connects to the Hamburg Süd network to Eastern Mediterranean and Middle East destinations via the hub port Tangier.

Moody downgrades Hapag-Lloyd

Moody's has downgraded the outlook for Hapag-Lloyd. This should come as no
surprise, considering how bad the results have been for all container carriers.

I rather doubt TUI will find anyone to buy the rest of their stake in this
company.

At least, not for what they are asking.

From The Journal of Commerce

Moody’s has changed its outlook for Hapag-Lloyd to “negative” from “stable” after the German carrier had a “weaker than expected performance” during the first three quarters of 2011.

The downgrade of Hapag-Lloyd’s outlook comes as TUI attempts to sell its 49 percent stake in the company. Standard and Poor’s in September downgraded the company’s outlook from “stable to negative,” citing lower than expected first-half year profitability.

Hapag-Lloyd has been one of the few container lines to stay in the black over the last three quarters. A $54.5 million profit total in the last two quarters offset a $31.8 million loss in the first quarter.

Moody’s said the container shipping industry has performed poorly because an oversupply of capacity has forced carriers to pull down rates. The rating’s agency said the highly competitive industry would be further challenged as new capacity is deployed next year.

“These factors have exerted pressure on operators to expand their market shares, making it difficult for the companies in the sector, including HL, to pass on material cost increases, despite good traffic volumes,” Moody’s said.

The ratings agency said Hapag-Llody has a strong business model featuring solid market shares and a flexible cost base. Moody’s said the company’s liquidity profile is adequate, with all of Hagag-Lloyd's new shipbuilding scheduled for delivery over next two years fully financed.

The ratings agency reaffirmed Hapag-Lloyd’s B1 corporate family rating and probability of default rating. Moody’s also reaffirmed the company’s B3 unsecured rating assigned to the $629.7 million and $250 million worth of senior unsecured notes maturing in 2015 and 2017, respectively.

Increased Tonnage Europe/U.S.

I don't really know why carriers would add tonnage at this time, but they are.

This is a press release.

Hamburg Süd and partners to upgrade Transatlantic Service



Hamburg, 19 December. In collaboration with Hamburg Süd and ZIM, Grand Alliance members Hapag-Lloyd, NYK and OOCL have decided to upgrade their tonnage deployed in the Transatlantic Service between Europe and North America East Coast. As from March 2012 instead of four 3,700 TEU vessels, four 5,400 TEU ships are then to come into operation. As hitherto, Hamburg Süd and ZIM will each provide one vessel and Grand Alliance two.



The weekly fixed-day service continues to have the port rotation: Rotterdam – Hamburg – Le Havre – Southampton – New York – Norfolk – Charleston – Rotterdam

More reports on NY/NJ Waterfront arrests

Below is from New Jersey Star Ledger. They are doing a great job
covering the arrests related to corruption on the NY/NJ piers.

Ex-longshoremen's union official is indicted on waterfront corruption charges
Published: Thursday, December 16, 2010, 7:40 AM

A new indictment of a once-powerful longshoremen’s union leader was quietly unsealed this week, pointing to a growing offensive by federal prosecutors into corruption on the waterfront.

The charges come less than a week after another member of the same union was charged with collecting "Christmas tribute" money exacted from other dockworkers to kick back to the mob.

Albert Cernadas Sr., who served as both executive vice president of the International Longshoremen’s Association and president of ILA Local 1235 in Newark, was accused of shaking down his members under threats of violence, in what was described as a long-running racketeering operation tied to the Genovese organized crime family.

The charges come nearly five years after Cernadas, 75, of Union Township, was removed from the ILA after pleading guilty to corruption charges involving thousands of dollars in union funds being funneled into a pharmaceutical company controlled by organized crime.

But in the new indictment, the government charges a far larger conspiracy dating back more than two decades — alleging that Cernadas put the screws to force cash payments from his members every year around Christmastime by use of "actual and threatened force, violence and fear."

The 52-page indictment, unsealed in federal court in Newark, does not say where the money went, but prosecutors say Cernadas was a known associate of the Genovese family which controlled the New Jersey waterfront. At the same time, other documents recently filed in several related cases spelled out what appeared to be a lucrative extortion racket known as "Christmas tributes" that preyed on ILA members, forcing them to cede part of their pay each year to crime bosses with hooks into the union.

Cernadas’ attorney, Jack Arseneault, declined comment. The U.S. Attorney’s office in Newark also declined to comment, and would not say what sparked its interest in Cernadas or why it kept the charges low key, opting not to make an announcement as it frequently does in such cases.

However, the indictment and other recent criminal complaints suggest a far larger investigation.

Last week, Robert Ruiz, 51, an international representative and delegate of the ILA, was arrested and charged in New York with extortion conspiracy in connection with similar payments.

According to an affidavit filed in the case by Jonathan Mellone, a special agent for the U.S. Department of Labor, members of the ILA were required to provide payments every December, and the payments were then kicked back to the Genovese family.

In connection with that case, the FBI said it dug up nearly $52,000 in cash buried in the backyard of one unidentified union member from New Jersey who went to authorities and said he and others were threatened with the loss of their jobs or their lives if they did not pay up. The union member told authorities the money was to go to Ruiz and it was their understanding the envelopes ultimately went to members of the Genovese family.

Separately, another reputed mobster, Stephen Depiro, was indicted in New York in April on racketeering charges in connection with the waterfront, with court records similarly documenting the holiday payments to organized crime.

In the criminal complaint filed against Depiro, transcripts of phone calls referred to the annual Christmas payments. Investigators said Edward Aulisi, the son of Vincent Aulisi, who became president of Local 1235 after Cernadas left, was caught on tape assuring reputed mob boss Michael Coppola that the tribute money would continue even after Cernadas left, and in fact had doubled.

The payments were the focus of some attention during a special hearing in October by the Waterfront Commission of New York Harbor. Aulisi, whom officials say held a no-show job at Port Elizabeth, was called as a witness but invoked his Fifth Amendment right against self-incrimination. He has not been charged with any wrongdoing.

The indictment against Cernadas says only that he conspired to extort money from ILA members each December, beginning in 1982. The timing of the charges suggest prosecutors were facing a problem with the statute of limitations had they not filed the when they did.

ILA officials in New York said Wednesday Cernadas was no longer with the union and they were unaware of the indictment.

Cernadas, whose son is Al Cernadas Jr., the first assistant prosecutor of Union County, was arraigned Wednesday before U.S. District Judge Susan D. Wigenton in Newark and released on a $1 million bond.

click here for link

More arrests on the NY/NJ waterfront

From The NY/NJ Waterfront Commission web-site

Three New Defendants and Multiple Counts Added to Genovese – ILA Racketeering Indictment.

December 15, 2011

NEWARK, N.J. – Three additional defendants were arrested today and charged in a superseding indictment that adds dozens of counts to a previous indictment charging multiple defendants – including an alleged member and associates of the Genovese organized crime family – with racketeering and related offenses, New Jersey U.S. Attorney Paul J. Fishman and Eastern District of New York U.S. Attorney Loretta E. Lynch announced.

A 103-count superseding indictment was unsealed this morning in Newark federal court in which previously-charged defendants Stephen Depiro, a soldier in the Genovese organized crime family of La Cosa Nostra (the “Genovese family”), and three Genovese family associates – Albert Cernadas, former President of International Longshoremen’s Association (“ILA”) Local 1235 and former ILA Executive Vice President; Nunzio LaGrasso, the Vice President of ILA Local 1478 and ILA Representative; and Richard Dehmer – are charged with racketeering conspiracy, including predicate acts of conspiring to extort Christmastime tributes from ILA members on the New Jersey piers. The superseding indictment includes, as part of the racketeering conspiracy charge, 61 additional predicate acts of extortion of various ILA members by Cernadas and 12 additional predicate acts of extortion of ILA members by Nunzio LaGrasso. In addition to the Christmastime extortion scheme, LaGrasso is charged with the extortion of an ILA dock worker so that the worker could retain a supervisory job at the port.

The superseding indictment also charges newly added defendants Michael Nicolosi, Julio Porrao and Rocco Ferrandino – all current or former ILA supervisors – with extortion conspiracy and extortion. Nunzio LaGrasso and five other defendants, including Thomas Leonardis, the President of ILA Local 1235 and ILA Representative; Robert Ruiz, the Delegate of ILA Local 1235 and ILA Representative; and Vincent Aulisi, former President of ILA Local 1235, are charged with additional counts of extortion of ILA members. Ruiz is also charged with obstructing justice by impeding a grand jury investigation. In total, the superseding indictment contains allegations regarding the extortion of 28 victims.

The government is represented by Assistant U.S. Attorneys Jacquelyn M. Kasulis and Jack Dennehy of the U.S. Attorney’s Office, Eastern District of New York, and Assistant U.S. Attorney Anthony Mahajan, of the U.S. Attorney’s Office, District of New Jersey.

And...this one

PNCT General Foreman Suspended by Commission after Arrest and Indictment on Multiple Extortion Charges.

December 15, 2011

PNCT General Foreman Michael Nicolosi was arrested this morning after being indicted federally on extortion conspiracy and multiple counts of extortion involving the forced collection of Christmas tributes from ILA members to the Genovese Family.

His license as a longshoreman was suspended by Commission vote pending an administrative hearing on the charges.

CSAV looking for money, plans to streamline

News from Chile (click here for link)


As best I can make out, CSAV plans to attempt to raise money from a "road show", I guess trying to get hedge funds and who knows else to either loan them money, or get shares. I can't be certain.

The plan is to actually downsize and streamline the company to make it profitable in 2012, and I guess raise capital to keep it going until the business improves.

Who knows, there is a lot of money out there looking for a decent return. Maybe someone will take a gamble.

I have quoted the spanish article, and below it is an english translation.

Oscar Hasbún: "Este aumento de capital no está dirigido sólo a los accionistas de CSAV"
La empresa realizará un road show en Brasil, EEUU y Europa, asesorada por BTG Pactual.

El ejecutivo asegura que hacia mediados de 2012 ya no serán el peor actor de la industria.
por Sandra Novoa F.

La Compañía SudAmericana de Vapores fijó ayer en US$ 0,2045 ($ 104 al dólar observado del día) el precio de la acción para el aumento de capital por US$ 1.200 millones. Aplicó un descuento de 10% respecto del precio promedio del miércoles y 21% respecto del promedio de octubre-noviembre (la acción ha caído 80% en el año). Este aumento de capital -5.867.970.660 nuevas acciones- es parte de la reestructuración iniciada en mayo, después que ingresara el grupo Luksic a la propiedad -a través de Quiñenco- y tomara las riendas de la administración.

Oscar Hasbún, gerente general Naviero-Contenedores, y quien ha estado a cargo del proceso, afirma que "es un precio atractivo para que los accionistas actuales suscriban lo que sus prorratas les permiten y para cualquier potencial inversionista". Explica que el descuento considera la volatilidad de la Bolsa y del tipo de cambio, y que fijaron el precio en dólares para asegurar la recaudación de los US$ 1.100 millones que gatillan la división de la empresa y la constitución de Sociedad Matriz Saam.

La opción preferente parte el 19 de diciembre y cierra el 17 de enero. Así, el proceso completo debiera concluir a más tardar la primera semana de febrero y la acción de SM Saam estaría flotando en la Bolsa durante febrero.

¿Cómo será la dinámica del road show?

Este aumento de capital no está dirigido sólo a los accionistas de CSAV. Cuando termine la opción preferente ofreceremos el remanente a terceros tanto en mercado nacional, con ayuda de Celfin, como en el internacional, asesorados por BTG Pactual. Contemplamos reunirnos con fondos de inversión en Brasil, Europa y Estados Unidos.

¿Están previendo que en la opción preferente no habrá mucha acogida?

Creemos que dado el tamaño del aumento de capital y lo atractivo de ofrecer dos acciones -Saam y CSAV- es una buena opción abrir la colocación al mercado. Mejora las posibilidades de éxito y permite el ingreso de nuevos accionistas.

¿Tienen una estimación de cuánto se pondría en la opción preferente?

Es difícil predecir. Será muy relevante lo que pase con las AFP. Creemos que es una opción muy atractiva para los inversionistas institucionales en general, por cuanto retirarían acciones de Saam, que tiene un negocio estable, con crecimiento, infraestructura y baja deuda.

¿Han sondeado el interés del mercado?

Al día de hoy, dada la situación de la industria y los resultados a septiembre de CSAV, existe preocupación en el mercado, pero durante el road show explicaremos en detalle por qué ésta es una buena opción, el impacto concreto de la reestructuración, que ésta es una compañía distinta a la que tomamos; explicaremos por qué Saam tiene un valor significativo y un enorme potencial y por qué creemos que la industria tocó fondo y ahora viene una reversión del ciclo naviero.

¿El gran incentivo para ir al aumento de capital es que al menos saldrán ras, porque sus acciones de Saam valen el equivalente al capital desembolsado, e incluso más?

Primero, el aumento de capital es una invitación a una CSAV distinta, más chica, más asociada, líder en sus mercados y con 30% de flota propia, un récord en su historia. Segundo, en un contexto en que la industria tocó fondo, por tanto es una oportunidad para invertir. Tercero, por supuesto que el atractivo tiene que ver con que los accionistas actuales, que concurran en su prorrata, recibirán al final de la operación dos acciones y una parte sustancial de la plata que pongan, si no toda, la recibirán en papeles de Saam, que posee un alto potencial de crecimiento como empresa independiente.

Saam tiene tres áreas: terminales portuarios, remolcadores y logística. Opera en muchos países, pero no en todos ellos con sus tres negocios. Una estrategia de crecimiento evidente es estar con las tres en todos los mercados.

¿Cómo se lee la valorización del área remolcadores de Saam en US$ 520 millones?

Está por sobre el valor que estimábamos para el área y consolida los fundamentos del valor de Saam. Su asociación con la holandesa SMIT fortalece sus operaciones en toda América y presenta oportunidades importantes de crecimiento en mercados como Brasil.

¿Cuán visibles son los frutos de la reformulación de CSAV?

La última línea al tercer trimestre dice poco de lo que está pasando. Nuestro negocio ha estado siempre afectado por el rubro de portacontenedores, el más volátil y más grande. Ahí entre abril y agosto perdimos un promedio de US$ 129 millones, mientras que en septiembre -primer mes donde se puede ver la reestructuración de manera efectiva contablemente- la pérdida cayó 64% respecto del promedio de ese período. Son US$ 800 millones menos al año.

En los resultados hay costos de reestructuración, efectos de tipo de cambio y otros que no son propios de la operación, sino de la solución que hemos implementado: a septiembre pagamos US$ 45 millones en costos de reestructuración y tendremos mucha de esa resaca en el último trimestre y el próximo año. Pero en la operación pura, la mejora es significativa en un mercado que está peor.

A septiembre los resultados de todas las compañías son más malos que los seis meses anteriores. CSAV es la única que tiene una mejora significativa en contenedores. Esto muestra que estamos construyendo una compañía capaz de competir en el negocio. La meta es que la estructura de costos nos permita estar entre los primeros que ganen plata cuando las cosas mejoren.

¿Cuándo estará en régimen la reestructuración?

Full en el segundo trimestre, ahí será visible la empresa nueva. Para tener utilidades dependeremos de que la industria mejore, pero ya no seremos el peor actor de la industria.

¿Qué tanto más chica será CSAV respecto de su peak?

En capacidad de carga será 47% menor respecto del peak de mayo de 2011. La capacidad de venta caerá mucho menos, porque estamos achicando una fábrica con mucha capacidad ociosa. Estimamos que en 2012 venderemos 30% menos de volumen transportado que en 2011; en plata, dependerá del precio.

¿Cuándo la industria permitiría ganar plata?

En este rubro los precios pueden variar hasta 10% a la semana. Nuestra percepción es que el tercer trimestre fue muy malo y el cuarto será peor. La mayoría de las compañías tienen problemas de capitalización, alto endeudamiento y poca caja. No resisten otro semestre malo. Por tanto, creemos que vienen más anuncios de alianzas como la de MSC-CMA en un montón de rutas y eso significa achicarse y sacar barcos. Nosotros ya lo hicimos: paramos 1% de la flota mundial. Maersk, la número 1, también dijo hace unas semanas que reducirá su capacidad. Y los tres actores principales anunciaron alzas de precios de US$ 600, 40%, a partir del 15 de diciembre en casi todos los tráficos, no porque haya más demanda, sino porque no pueden seguir perdiendo.

En enero CSAV tenía 170 barcos y hoy 119, de los cuales operamos 85 y el resto los subarrendamos; eso mismo hará el resto de los actores. Hoy el arriendo vale US$ 8.000 cualquiera sea el tamaño; 5 meses atrás una nave de 5.000 TEU costaba US$ 35.000. Con este escenario, en 2012 vemos un primer trimestre difícil, un segundo algo mejor y un segundo semestre en equilibrio, retornando a niveles normales de rentabilidad.
Recuadro :

"No estamos apostando las fichas al socio estratégico"

-¿Es factible que el socio se incorpore en el aumento de capital?

No. Un socio estratégico, que aporte conocimiento y sinergias, tiene más que ver con una fusión.

-¿Y en qué está la búsqueda del socio estratégico? ¿Se concretará después del aumento de capital?

Hoy nuestro principal foco está en hacer de CSAV una empresa rentable por sí sola. No estamos apostando las fichas al socio estratégico, no es una obsesión, porque tenemos que preocuparnos de la marcha de la compañía.

El socio puede venir o no. Es una opción atractiva que se puede dar en un minuto, pero el foco es consolidar el modelo de negocios de CSAV, y a eso estamos abocados. Y la reestructuración está dando resultado; si bien en términos comparativos hoy estamos muy mal respecto de nuestros competidores, en seis meses estaremos comparativamente mejor. El tiempo nos juega a favor, porque la industria está empeorando.

En la industria habrá consolidación por diversas vías, como acuerdos de operación conjunta de mediano y largo plazo, que es lo que hemos hecho hasta ahora (en cinco meses aumentamos nuestras operaciones conjuntas desde menos del 30% a más de 85%). La semana pasada salió un anuncio de MSC y CMA, segundo y tercer operadores del mundo, declarando su intención de abordar conjuntamente varios mercados; esa es una forma de consolidación en el hecho. En este contexto nosotros tenemos una condición bastante única en el mercado, porque somos fuertes en las rutas Norte-Sur -que crecen a tasas más altas que el resto-, en un mercado que es fuerte en rutas Este-Oeste. Por tanto, somo atractivos, porque ofrecemos complementariedad.

¿En qué plazo definirían el socio?

Hoy la industria está muy complicada, cada empresa tiene que hacer sus ajustes y para nosotros es fundamental mostrar los resultados de la reestructuración, tener una compañía con retornos similares a los de la industria y no peores. Nunca dijimos que incorporar un socio era inminente, sino que había una decisión de trabajar en la búsqueda de un socio estratégico, y eso sigue en pie.

¿Para cuánto les alcanza con este aumento de capital navegando solos?

Con esto la compañía tiene recursos suficientes para desarrollar sus planes. No creemos que vayamos a necesitar capital para financiar pérdidas.

This is translated into english using Google Translate. It does leave something to be desired.

Hasbún Oscar: "This capital increase is intended only for shareholders CSAV"
The company will hold a road show in Brazil, USA and Europe, advised by BTG Pactual.

The executive said that by mid 2012 and will not be the worst actor in the industry.

The South American Steamship Company yesterday set at U.S. $ 0.2045 ($ 104 dollar a day observed) the share price for the capital increase of U.S. $ 1,200 million. He applied a discount of 10% over Wednesday's average price and 21% on average from October to November (the stock has fallen 80% in the year). This increase in capital 5,867,970,660 new shares, is part of the restructuring begun in May, after you enter the Luksic group property Quiñenco-through, and take the reins of government.

Oscar Hasbún, general manager Naviero-Containers, and who has been in charge of the process, says "it is an attractive price to existing shareholders pro rata sign them what their permit and for any potential investor." He explained that the discount considers the volatility of the stock market and exchange rate, and set the price in dollars to ensure the collection of U.S. $ 1,100 million that trigger the division of the company and the parent company constitution Saam.

The preferred option part of the December 19 and closes on 17 January. Thus, the entire process should be concluded by the first week of February and Saam SM action would be floating on the Stock Exchange in February.

How will the dynamics of the road show?

This capital increase is not directed only to the shareholders of CSAV. When you finish the preferred option to offer the remaining third both in domestic market, with the help of Celfin, and internationally, advised by BTG Pactual. We watched together with investment funds in Brazil, Europe and USA.
Are you anticipating that there will be the preferred option well received?

We believe that given the size of the capital increase and the attractiveness of offering two action-Saam and CSAV, is a good choice to open the placing on the market. Improves the chances of success and allows the entry of new shareholders.

Do you have an estimate of how much would the preferred option?

It is difficult to predict. It will be very important what happens to the AFP. We believe it is a very attractive option for institutional investors in general, as Saam withdraw shares, which has a stable business, with growth, infrastructure and low debt.

Have you probed the market's interest?

To date, given the state of the industry and results CSAV September, there is concern in the market, but during the road show will explain in detail why this is a good option, the actual impact of the restructuring, it is a different company that we take, we will explain why Saam has significant value and huge potential and why we believe the industry hit bottom and now comes a reversal of the shipping cycle.

Is the great incentive to go to the capital increase is that at least will flush, because their shares are worth the equivalent Saam invested capital, and even more?

First, the increase of capital is an invitation to a different CSAV, smallest, most associated, the leader in its markets and its own fleet 30%, a record in its history. Second, in a context in which the industry bottomed out, so it is an investment opportunity. Third, assume that the appeal has to do with existing shareholders, who concur in its proportion, received at the end of the operation two actions and a substantial portion of the money they bring, if not all, Saam papers received in , which has a high potential for growth as an independent company.

Saam has three areas: port terminals, tugs and logistics. Operates in many countries, but not all of them with their three businesses. A clear growth strategy is to be with the three in all markets.

How to Read the recovery area Saam tugs at U.S. $ 520 million?

Is above the value we estimated for the area and strengthens the foundations of the value of Saam. His association with the Dutch SMIT strengthens its operations in America and presents significant opportunities for growth in markets like Brazil.

How visible are the fruits of the reformulation of CSAV?

The last line in the third quarter says little about what is happening. Our business has always been affected by the containership category, the most volatile and larger. Between April and August there lost an average of U.S. $ 129 million, while in September, the first month where you can see how effective the restructuring of accounting, the loss fell 64% from the average for that period. Are $ 800 million less per year.
n the results no restructuring costs, exchange rate effects and others that are not part of the operation, but the solution we have implemented: a September pay $ 45 million in restructuring costs and have a lot of that surf on the last quarter and next year. But in the pure operation, the improvement is significant in a market that is worse.

In September the results of all the companies are more evil than the previous six months. CSAV is the only one with a significant improvement in containers. This shows that we are building a company capable of competing in the business. The goal is that the cost structure allows us to be among the first to earn money when things improve.

When the restructuring scheme will be?

Full in the second quarter, there will be visible new company. For profit that the industry will rely on better, but we will not be the worst actor in the industry.

How much smaller will CSAV about their peak?

Cargo capacity is 47% lower than the peak in May 2011. The sales capacity will fall much less, because we are a factory with much shrinking spare capacity. We estimate that in 2012, selling 30% less volume transported in 2011, in silver, depend on the price.
When the industry would save money?

In this area prices can vary up to 10% per week. Our perception is that the third quarter was very bad and the quarter will be worse. Most companies have capitalization problems, high debt and little cash. Do not resist another half bad. Therefore, we believe that partnerships are more ads like MSC, CMA in a lot of routes and that means shrink and make boats. We already did: stop 1% of the world fleet. Maersk, No. 1, also said a few weeks ago to reduce its capacity. And the three major players announced price increases of U.S. $ 600, 40%, from December 15 in almost all traffic, not because there is more demand, but because they can not keep losing.

CSAV in January and now had 170 ships, 119 of which operate 85 and the rest are leased out, that it will do the rest of the actors. Today the rental costs U.S. $ 8,000 regardless of size, 5 months ago a ship of 5,000 TEU cost $ 35,000. With this scenario, in 2012 we see a difficult first quarter, a second and a better second half in balance, returning to normal levels of profitability.
Box:

"We're not betting the chips to the strategic partner"

- Is it possible that the member is incorporated in raising capital?

No. A strategic partner to provide expertise and synergies, has more to do with a merger.

- And what is the search for strategic partner? Do materialize after the capital increase?
Today our main focus is on making a profitable company CSAV alone. We're not betting the chips to the strategic partner, not an obsession, because we have to worry about the running of the company.

The partner can come or not. It is an attractive option that can be given in a minute, but the focus is to strengthen the business model CSAV, and that we are doomed. And the restructuring is paying off, but today we are comparatively very bad about our competitors, in six months we will be comparatively better. The time we play for, because the industry is getting worse.

In the industry will consolidate a number of ways, including joint operating agreements and long term, which is what we've done so far (in five months we increased our joint operations from less than 30% to over 85%). Last week came an announcement of MSC and CMA, second and third operators in the world, declaring their intention to jointly address several markets, that's a form of consolidation in the event. In this context we have a rather unique status in the market, because we are strong in the North-South routes that grow at higher rates than the rest, in a market that is strong in the East-West routes. Therefore, somo attractive, because we offer complementary.

How soon would define the partner?

Today the industry is very complicated, each company has to make adjustments and to us it is essential to show the results of the restructuring, have a company with similar returns to the industry and not worse. We never said to incorporate a partner was imminent, but had a decision to work towards finding a strategic partner, and that still stands.

For how they achieved with this capital increase sailing alone?
With this the company has sufficient resources to develop their plans. We do not believe that we will need capital to finance losses.