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Published: 15 July 2014
Bohai moves for Cronos
Bohai Leasing Co Ltd, parent company of the world’s sixth biggest container leasing company, Seaco, has signed a memorandum of understanding (MoU) with Cronos Holding Company Ltd for the acquisition of 80% of Cronos Ltd.
Subject to regulatory approvals and other conditions, a minority investor will acquire the remaining 20% of Cronos, the world’s eighth largest box lessor, which is majority-owned by funds affiliated with Kelso & Co and Transportation Capital Group.
The transaction, the terms of which have not been disclosed, has been arranged by Bravia Capital, a Hong Kong based investment and advisory firm, which participated in the US$1.05B acquisition of GE SeaCo by China’s HNA Group Company Ltd (HNA) in 2011. The company was renamed Seaco and in December 2013 was placed under the control of the equipment leasing division of Bohai Leasing, a Shenzhen Stock Exchange-listed majority-controlled subsidiary of HNA.
Seaco and Cronos will continue to operate separately during the period prior to the finalisation of the acquisition. Following completion, the Bohai subsidiaries will control a fleet of around 2.2M TEU, putting it in third place in the container leasing league table behind Textainer and Triton and in the number one spot in terms of fleet value with a total of 3,420,000 cost equivalent units (CEU).
“We believe that the acquisition of Cronos will be a strong complement to our existing investment in Seaco, enhancing our ability to service an expanded list of customers globally and strengthening our capabilities in many regions around the world,” said Wang Hao, Chairman of Bohai Leasing. “We are a group committed to growth and customer service and are eager to finalise an agreement and welcome Cronos as the newest addition to our successful portfolio of transportation finance and leasing companies.”
Bharat Bhise, CEO of Bravia Capital said, “Bohai’s investment in container leasing through its current ownership of Seaco and its contemplated investment in Cronos will create the largest diversified fleet of dry, reefer, tank and special containers in the world. Cronos is a world class container leasing company and we are pleased to bring an acquisition to Bohai that is a very strong strategic fit.”
Deutsche Bank Securities acted as the financial advisor to Bohai Leasing and Sidley Austin LLP is acting as legal advisor with respect to the transaction. Keefe, Bruyette & Woods Inc acted as the exclusive financial advisor and Debevoise & Plimpton LLP along with Greene Radovsky Maloney Share & Hennigh LLP are acting as legal counsel to Cronos.