Osprey buys out London shipping firm

Osprey buys out London shipping firm

SINGAPORE (AFP): Singapore's listed tanker operator Osprey
Maritime Ltd. announced yesterday it would buy London-based
shipping firm Gotaas-Larsen Shipping Corp. for US$750 million in
a bid to cash in on Asia's soaring gas demand.

With the acquisition, Osprey Maritime will own a fleet of 30
vessels and manage another six liquefied natural gas (LNG)
carriers, making it one of Asia's largest energy transport
groups, officials said.

Osprey Maritime's announcement that it will acquire a 100
percent equity interest in Gotaas-Larsen ended two weeks of
speculation on the deal which led to the suspension of trading in
the Singapore company's shares at the weekend.

"This acquisition is a springboard to realizing the company's
goal of becoming a leading international energy transportation
group," Osprey Maritime chairman Timothy Cottew told a news
conference.

"It is in line with our strategy to maximize shareholder value
by tapping on the immense growth prospects in Asia's oil and gas
industries," he said.

The takeover comes hot on the heels of Singapore-listed
Neptune Orient Lines Ltd.'s purchase of US-based APL Ltd. last
month for $825 million amid uphill battles by shipping firms to
survive falling freight rates, tougher regulations and fierce
competition.

"This is not a reaction to Neptune. We have been studying the
energy market for quite some time and the acquisition will add
both to our fleet of LNG and crude carriers and broadening the
company's management expertise," Cottew said.

Osprey Maritime currently owns and operates a modern fleet of
22 vessels used to transport liquid cargo.

Before the deal, Osprey Maritime was a 50:50 partner with
Gotaas-Larsen in a venture that owned a LNG carrier. Industry
sources said they had also planned to build a LNG carrier for
Taiwan's state-owned Chinese Petroleum Corp. before Tuesday's
announcement.

Analysts said the acquisition would enable Osprey Maritime to
gain a foothold in the lucrative LNG sector, especially ownership
of LNG carriers, of which there are only about 100 in the world.

An LNG carrier costs about $225 million.

"It's a very nimble and strategic deal which will allow them
to gain a foothold, especially in the Indonesian LNG sector,"
Richard Stokes, a marine analyst with W.I.Carr in Singapore, told
AFP.

Osprey Maritime has close links with Pertamina, the state-
owned oil corporation of Indonesia, the world's largest LNG
exporter. Pertamina is keen to develop Indonesia's substantial
natural gas reserves.

"The timing of the deal is opportune, especially when there is
a lot of focus on VLCCs (very large crude carriers)," Stokes
said. VLCC freight rates, he added, were beginning to recover and
the Singapore company wanted to ride on this growth.

Apart from being major LNG exporters, Asian economies' demand
for the gas was also expected to increase -- to more than 90
million tons a year by 2005 from about 59 million tons in 1996,
analysts said.

Cottew said the acquisition of Gotaas-Larsen would be financed
through syndicated loan facilities and the issue of new equity.

Company officials said Osprey Maritime was arranging for
syndicated loan facilities totaling $944 million primarily to
finance part of the acquisition cost and to refinance the bulk of
its existing bank borrowings.

Gotaas-Larsen, currently owned by a British family, was set up
by two Norwegian businessmen and used to be listed publicly
before delisting sometime in the late 1980's.

Osprey Maritime shares was last traded at 2.16 Singapore
dollars (US$1.54) on Friday.