Attica Group is set to pull off yet another merger deal that will bolster its position as Greece’s leading ferry company.
The Athens-listed entity announced on Friday it has agreed to take over troubled smaller rival ANEK Lines.
The deal was concluded with creditors and shareholders representing a majority 57.7% interest in ANEK, Attica said.
The latter include Greek lenders Piraeus Bank, Alpha Bank, Attica Bank, as well as Cross Ocean Partners — a loan-buying private equity fund based in London.
Attica is the much bigger of the two entities, with a fleet of 33 ships and a current market capitalisation of close to €200m on the Athens Stock Exchange.
ANEK has seven ships with an average age of about 30 years and a market capitalisation of €21m. The company’s stock has been trading for nine years in a restricted, supervised manner, given its fragile financial position.
Merger talks have been going on for months, as TradeWinds already reported. The driving force behind them was Piraeus Bank, which holds a commanding stake in both Attica and ANEK, either directly or indirectly.
Like other Hellenic lenders, Piraeus has been restructuring and selling assets as part of the European-funded bailout that saved Greece and its banks from bankruptcy during the eurozone debt crisis.
Piraeus has already pushed Attica into another consolidation move five years ago, when Attica absorbed former rival Hellenic Seaways.
The ANEK deal is structured as an absorption as well.
Under its terms, ANEK shareholders are to receive 0.1217 new Attica shares for every ANEK share they hold.
Furthermore, Attica will pay €80m ($77m) to ANEK’s creditors, in exchange for which the latter will cancel €236m of debt.
The agreement is still subject to approval by regulators and the two companies’ general shareholder meetings.
Mutual benefits
There's little doubt that approval will be forthcoming.
Members of the Vardinoyiannis family, which used to lead ANEK and still hold about 22% of the company, are understood to be part of the deal.
A merger will also boost both firms' prospects.
Attica and ANEK have been spilling red ink in the wake of the coronavirus. Attica reported a net loss of €30.5m in the first half of the year, broadly the same as in the corresponding period of 2021.
Annual losses at ANEK, whose brand has suffered from a lethal fire on a ship it managed eight years ago, more than tripled in 2021 to €41.7m.
The two companies' results probably improved in the third quarter of 2022, when Greek tourism bounced back from the coronavirus pandemic.
Much of their higher revenue, however, will be offset by rising bunker costs amid spiking oil prices.
By incorporating ANEK, Attica may be reaching a critical size that will make it easier for Piraeus to sell it off to new investors.
Attica has already undertaken other moves to become more attractive.
The company has expanded into the hotel business, installed scrubbers on several of its ships and has been renewing its fleet with three catamaran newbuildings ordered at Brodrene Aa shipyard in Norway.
ANEK and Attica’s biggest domestic rivals are Grimaldi-controlled Minoan Lines and Marios Iliopoulos-led Seajets.
