ECONOMY

Strintzis and Anek merger shipwrecked

Exploratory talks between Crete-based Anek Lines and Strintzis Lines for the merger of the two ferryboat operators have fizzled out three weeks after they began, underlining the difficulties of consolidation in the sector. The two companies said yesterday they agreed to terminate the talks two weeks ahead of a self-imposed deadline, after thrashing out the issues for three weeks. No details concerning the reasons behind the breakdown of the discussions were given. Strintzis had no comment while Anek could not be reached. Observers said the sticking points appeared to be the valuations placed on the companies and a fair share swap. In addition, the different corporate atmospheres at the two ferryboat operators could have torpedoed the process. While the Greek coastal shipping industry has undergone a wave of consolidation in the last few years, with market leader Minoan Lines absorbing a host of smaller, family-owned companies, the sector is still very much fragmented. Most worrying is the fact that the major ferryboat operators are all burdened with a heavy debt load, the result of an ambitious ship renewal program launched at the height of the stock market boom in 1999. Last month, Strintzis, in which passenger shipping company Attica Enterprises holds a 49-percent stake, said it would issue a 30-million-euro, three-year convertible bond, with the proceeds understood to go toward reducing its mountain of debt. The company has been among the most ambitious, ordering seven newbuildings over a three-year period. Anek added two new vessels to its fleet in 2000. Strintzis and Anek, however, have not been the only ferryboat operators toying with the idea of merging their operations. Hellas Flying Dolphins, the former Minoan Flying Dolphins which acquired notoriety after the Express Samina tragedy, is currently holding talks with Lesvos-based NEL on a possible merger. The shake-up in the Greek passenger shipping industry has gained added urgency as Greece prepares to end its cabotage regime in November in a move which could prompt foreign players to make their entrance. On the bright side, the sector appears to have finally put its losses behind it as the major companies reported profits or cut losses in the first quarter of the year.