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Commerzbank to Buy Ships From Debtors in Restructuring Effort

Commerzbank AG (CBK), Germany’s second-biggest bank, plans to buy and run ships from its borrowers as part of an effort to restructure its ship-financing business.

Hanseatic Ship Asset Management GmbH, a Hamburg-based unit of the German bank, will run the vessels with partners and sell them when the shipping market recovers, Commerzbank said in a share sale prospectus published on its website on May 14.

Commerzbank gave the German government a 25 percent stake in 2009 in return for an 18.2 billion-euro ($23.4 billion) bailout. To make final debt repayments to the state and meet tighter capital rules, the bank started offering 2.5 billion euros of new shares on May 15. The subscription period ends on May 28.

“The reduction of the ship-financing portfolio is subject to significant risks due to the difficult market situation at the moment and the price volatility of ships,” Frankfurt-based Commerzbank said. Thomas Kleyboldt, a spokesman, declined to comment on the number of vessels, the size of the investment or the time frame.

The shipping industry is suffering as the euro-region debt crisis saps demand for seaborne goods and an overcapacity of ships weighs on rates.

To contact the reporter on this story: Nicholas Brautlecht in Hamburg at nbrautlecht@bloomberg.net

To contact the editor responsible for this story: Angela Cullen at acullen8@bloomberg.net

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