Canadian Algoma Central Corporation announced that will enter into a 50/50 joint venture with Nova Marine Holdings Limited (Nova) of Switzerland, which will focus on short-sea dry-bulk shipping for global markets. This new joint venture is going to operate as NovaAlgoma Short-Sea Carriers (NASC).
NASC was formed by Nova on October 31, 2016 carve-out from the deep sea dry-bulk freight business operated by Nova Marine Carriers S.A. In accordance with its agreement with Algoma, Nova has transferred all short-sea commercial contracts to NASC and transferred its interest in NASC and its interests in any dry-bulk vessels of less than 15,000 dwt to a newly formed entity, NovaAlgoma Short-Sea Holding Limited (NASH).
To complete this transaction, Algoma has acquired a 50% interest in NASH from Nova. At closing, Algoma acquired an interest in the NASC commercial platform and its book of business and an interest in a fleet of 15 short-sea mini bulkers ranging in size from 5,750 dwt to 14,700 dwt. Six of these vessels are wholly owned by NASH and the company has a 50% interest in the remaining nine vessels. In addition to the vessels owned by NASH, NASC currently manages a fleet of 57 short-sea vessels on behalf of other owners, bringing the total fleet to 72 vessels. In addition, NASC is an active charterer of vessels as required to meet the commercial needs of its book of business.
The joint venture will be based in Lugano, Switzerland and has offices in Rotterdam and Sofia. The two companies have also discussed opportunities to capitalize on prospects to develop mini bulker business within the Canadian market.
“While the vessels we operate in our domestic fleet are considerably larger, our Great Lakes dry-bulk business is a short-sea business and we share many customers and operating principles with global short-sea markets,” said Ken Bloch Soerensen, President and CEO of Algoma.
Vincenzo Romeo, Chief Executive Officer of Nova, highlighted the need of further consolidation on the recovery of the challenged global short-sea market, noting that both operators and ship owners are seeking commercial partners with the financial strength to meet their high quality requirements.