US private equity firm Kohlberg Kravis Roberts (KKR) and its London-based ship management partner Borealis have bought Commerzbank’s distressed ship portfolio, Hanseatic Ship Asset Management (HSAM).
The two partners are paying USD255 million for the portfolio of 18 vessels taken over from borrowers who defaulted on loans, Commerzbank said.
HSAM was formed as an internal shipowning platform by Commerzbank in 2013 in a warehousing solution for distressed ships. The aim was to prevent fire sales that would have resulted in severe losses for the bank and to gain time for ship prices to recover.
The portfolio comprises 13 container vessels and five bulk carriers. No further details regarding the identity of the ships, prices, and financing arrangements by KKR/Borealis were given.
Commerzbank’s decision to sell was driven by the increase in second-hand prices and the depreciation of the euro against the dollar, both of which pushed up the euro-denominated value of its fleet, according to industry sources in Hamburg.