Algoma Central Corporation and Nova Marine Carriers have announced the creation of a new joint venture that will focus on short-sea dry-bulk shipping for global markets. This new joint venture, operating as NovaAlgoma Short-Sea Carriers, or NASC, is a 50/50 joint venture.
NASC was formed by Nova last October. In accordance with its agreement with Algoma, Nova has transferred all short-sea commercial contracts to NASC and transferred its interest in NASC and its interests in any dry-bulk vessels of less than 15,000 dwt to a newly formed entity, NovaAlgoma Short-Sea Holding Limited (NASH).
To complete this transaction, Algoma has acquired a 50% interest in NASH from Nova. At closing, Algoma acquired an interest in the NASC commercial platform and its book of business and an interest in a fleet of 15 short-sea mini bulkers ranging in size from 5,750 dwt to 14,700 dwt. Six of these vessels are wholly owned by NASH and the company has a 50% interest in the remaining nine vessels. In addition to the vessels owned by NASH, NASC currently manages a fleet of 57 short-sea vessels on behalf of other owners, bringing the total fleet to 72 vessels. In addition, NASC is an active charterer of vessels as required to meet the commercial needs of its book of business.
“We are extremely pleased to be joining Nova in this promising new business venture which we expect will be immediately accretive to our earnings per share” said Ken Bloch Soerensen, President and CEO of Algoma. “While the vessels we operate in our domestic fleet are considerably larger, our Great Lakes dry-bulk business is a short-sea business and we share many customers and operating principles with global short-sea markets,” Soerensen continued.
Vincenzo Romeo, ceo of Nova, commented, “The global short-sea market is slowly recovering after several challenging years but is still in need of further consolidation. Furthermore, it is obvious that both customers and shipowners are seeking commercial partners with the financial strength to meet their need for high quality service and dependability. ”
The joint venture will be based in Lugano, Switzerland and has offices in Rotterdam and Sofia. Areas of commercial and other synergies between NASC and Algoma have already been identified, including opportunities to capitalise on prospects to develop a mini bulker business within the Canadian market.
In January last year, Nova and Algoma created NovaAlgoma Cement Carriers (NACC), a joint venture focused on pneumatic cement carrying freighters and servicing global manufacturers of cement products. Since its beginning with a fleet of three vessels in operation, NACC has grown to a fleet of nine operating vessels with three more under construction or in the planning stage.