Finland’s Neste Oil to exit its shipping business

19 September 2013 15:36  [Source: ICIS news]

LONDON (ICIS)--Neste Oil plans to exit its shipping business, as the company finds it difficult to compete on international shipping markets, the Finnish refiner and biofuels major said on Thursday.

Neste said that it plans to sell all its own vessels and outsource ship-management functions. About 320 Neste ship management personnel will be transferred to a new employer, it said.

“Neste Oil's shipping needs have changed in recent years," said CEO Matti Lievonen.

"The proportion of the group's cargoes carried by Neste Shipping ships flying the Finnish flag has steadily declined,” Lievonen said.

“Because of its high costs level, Neste Shipping has been unable to compete profitably on the international shipping market,” he added.

As part of the restructuring of the shipping business, Neste Oil intends to sell five tankers and three tugs to companies owned by Finland's National Emergency Supply Agency and the Ilmarinen Mutual Pension Insurance Company.

These vessels would sold at their current market value and leased back to Neste under long-term contracts.

In addition, Neste plans to sell three of its other tankers at a later stage, and it plans to sell its 50% ownership in another three tankers, it said.

Neste said that it expects its exit from the shipping business to free up about €60m ($81m) of capital from its balance sheet and to improve the group's result by about €10m per year in coming years.

($1 = €0.74)

By: Stefan Baumgarten
+1 713 525 2653

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