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At last week’s extraordinary general meeting at CSAV, 84.5% of shareholders voted in favour of a deal that would see the Chilean carrier merge with Germany’s Hapag-Lloyd, exchanging all of its container assets for a 30% stake in the new entity, which would then rank as the fourth-biggest container line in the world and making it the largest single shareholder in the new entity.

Shareholders that did not attend the EGM have until April 20 to approve the transaction.

So far less than 1% of the shareholders have voted against the tie-up, but should this exceed 5%, CSAV may pull the deal, said chief executive Oscar Hasbun.

“We hope that on April 20 we can confirm that fewer than 5% of withdrawal rights were exercised and the negotiation with Hapag Lloyd can continue its course,” he added.

Assuming that the proposed merger also passes due diligence tests, CSAV said it expected to sign a binding agreement in the next 30 to 40 days and close the deal by the end of the year.

In the new Hapag-CSAV structure, the City of Hamburg’s shareholding would reduce to 25.8% from its current 36.9%, Kuehne Maritime’s to 19.7% from 28.2%, TUI to 15.4% from 22% and minority shareholders to 9% from 12.9%.

CSAV said the combined company would achieve cost savings of almost $300m by 2017 from optimisation of fleet, terminals, intermodal operations and equipment.

Indeed, despite radical cuts to its services over the past three years – which saw its monthly throughput fall to 144,000teu this January, compared with the 296,000teu carried in the same month of 2011 – CSAV has struggled to break even, posting a net loss of $169m in 2013, albeit reflecting a 46% improvement on the $314m deficit recorded in 2012.

And Hapag-Lloyd, which will announce its 2013 results on Wednesday, is also unlikely to have turned a profit last year, given that the line was carrying forward a cumulative $73.5m loss into the final quarter. The past three months have even tested Maersk Line – container shipping’s bellwether company – which reported a $300m fourth-quarter profit, compared with the $500m surplus in the third quarter.

The problems for the German carrier seem to stem from the vessel cascading that has also impacted other carriers, such as OOCL. At the nine-month stage, all of Hapag’s service routes were showing year-on-year declines in average revenue per teu, with the enforced redeployment of bigger ships onto hitherto robust trade lanes proving a drag on rates.

Of its 5.3m teu annual carryings, Hapag-Lloyd’s service split is roughly 22% each for its transatlantic, Asia-Europe, transpacific and Latin American trades, with Australasia accounting for the remaining 12% of volumes.

In the case of CSAV’s 1.9m-teu-a-year business, 72% relates to Latin America; thus, in the merged company, a 36% dominance would be taken by this sector of trade.

CSAV’s shareholders were told at the presentation that Hapag-Lloyd would undertake an IPO a year to 18 months after the transaction is completed to raise $500m.

At the same meeting, shareholders also approved a $200m capital injection for the Chilean line in order to complete the financing of seven 9,300teu ships under construction at Samsung Heavy Industries shipyard in Korea, and to fulfil some of the conditions for the closing of the merger with Hapag-Lloyd.

Interestingly, in some Hapag-Lloyd circles the merger is referred to as a “takeover”, although, assuming that the deal goes through, the common aim is to turn two loss-making carriers into one profitable line.

“We want to reach Maersk’s level of profitability and efficiency,” said Mr Hasbun.

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