By Mike Wackett (The Loadstar)–One of Hapag-Lloyd’s biggest investors has actually rejected a strategy by CMA CGM for merging talks.

Any such bargain can produce the biggest container delivery line on the planet.

Alphaliner records that, on the side lines of the firm’s AGM in Hamburg the other day, Hapag-Lloyd 21.4% investor Klaus Michael Kuehne verified the strategy had actually been made.

Mr Kuehne started buying the German service provider in 2008 as a “white knight”, acquiring shares from proprietor TUI to sustain the firm’s Hamburg base as well as see off a prospective proposal from competing service provider NOL.

However, the logistics business owner has actually obviously turned down the French strategy, stating “Hapag-Lloyd would rather take over CMA CGM”.

And in a meeting with German radio terminal NDR, Mr Kuehne included: “I am not worried. [CMA CGM] approached me and made several attempts to negotiate, but we found that the proposal made no sense. We do not want it.”

Reuters: CMA CGM Explored Possible Merger Hapag-Lloyd, Sources Say

However, shares in Hapag-Lloyd, which had actually gone down greatly after the service provider provided an earnings caution on 29 June, responded favorably to merging supposition, at first obtaining 11% as capitalists wished for even more debt consolidation in the sector.

Meanwhile, at the AGM, president Rolf Habben Jensen encouraged investors that the marketplace atmosphere continued to be “challenging”.

He claimed: “Freight rates are under pressure from increased ship deliveries in the first half of this year and, with bunker costs and charter rates on the increase, we have short-term pressure on the cost side that has not been matched in the form of increased rates to our customers.”

Nevertheless, he included, “we are currently seeing a positive trend”, which he expected “should be further consolidated in the second half of the year”.

Mr Habben Jensen additionally claimed Hapag-Lloyd required to “secure a competitive cost structure” as well as come to be “even more efficient”, determining essential locations of “short-term measures” he claimed would certainly provide “some relief on the cost side”.

These consist of optimizing networks, taking care of acquiring expenses a lot more constantly as well as examining incurable agreements. Given the large amounts of cash included, “small percentage savings can have a significant impact on earnings”, he claimed.

“We will also take advantage of the opportunities that emerge from digitisation and offer our customers even better services and new digital products,” claimed Mr Habben Jensen.

On the topic of the upcoming IMO 2020 0.5% sulphur cap guidelines, Mr Habben Jensen was eager not to alarm investors by duplicating earlier sights that he was not in favour of setting up scrubber systems that would certainly enable Hapag-Lloyd vessels to remain to shelter with less expensive greater sulphur material gas after 1 January 2020.

Several lining rivals, consisting of MSC, HMM as well as Evergreen, are selecting scrubbers on newbuilds as well as some are having the exhaust gas cleansing systems retrofitted on their existing ships.

Mr Habben Jensen claimed Hapag-Lloyd was helping “practical solutions”, which he recommended can suggest the service provider’s fleet post-2020 can be powered by a mix of scrubbers, LNG as well as low-sulphur gas.

He included that the service provider was reviewing “all available options” on its future approach for aquatic gas as well as 3 pilot tasks were recurring.

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