The Singaporean takeover of the Baltic Exchange is designed to bolster London’s position as an international maritime hub, a spokesperson for the Singapore Exchange has told Splash.
In the wake of Splash’s exclusive news that the Singapore Exchange (SGX) has entered exclusive negotiations to take over London’s Baltic Exchange, SGX has moved to allay fears that London will lose some of its maritime preeminence by the potential sale.
Splash was given a background briefing by a spokesperson for SGX with the main message being that the planned acquisition was designed to boost, not hinder, London’s position by giving the UK capital’s major maritime institution greater access to Asian markerts.
The period of exclusivity for negotiations expires on June 30.
Splash also understands that outgoing ceo, Jeremy Penn, will remain in place until the sale goes through and SGX will be involved in selecting his replacement.
In a release yesterday, SGX said the proposed transaction “would bring together complementary strengths of Singapore and London, two of the world’s most important maritime hubs”.
SGX promised to keep the Baltic Exchange’s headquarters in St Mary Axe, City of London, maintaining the existing market benchmark production and governance model, and keeping end-user Baltic data fees and fees for SGX clearing of freight derivatives at current levels for at least five years. Included in the proposal is also a commitment to the multiple clearing house model.
The likely sale of the 272-year-old Baltic Exchange to the Singapore Exchange has not been without its detractors, chief among them, John Banaszkiewicz, the managing director of Freight Investor Services (FIS), who last month returned as dry chairman of the Forward Freight Agreement Brokers’ Association (FFABA).
Banaszkiewicz told Splash yesterday: “The sale of the Baltic Exchange marks a turning point in the history of the freight market and we hope that it is a change for the better.
“Like other contributors and users of Baltic data FIS is concerned that the devil will be in the detail of any potential deal and the risk remains that market participants will be exposed to new conditions that, while manageable for the bigger shareholders, might negatively affect the market as a whole.
“We look forward to receiving the fuller details and being able to discuss the sale and its implications with The Baltic and the buyer in depth.”
