Norddeutsche Vermogen founder ‘free to act’ on future strategy

Bernd Kortum is under no pressure to sell containership owning or managing companies but open to consolidation if it makes sense

Talks to find the right partner for the shipping activities of Norddeutsche Vermogen Group are designed to secure the future of the German containership owner, says founder and chairman Bernd Kortum.

Its shipmanagement division, Norddeutsche Reederei H Schuldt, came close last year to forming a partnership with a number of companies, including Reederei Claus-Peter Offen.

Now, a number of fresh offers are on the table that are being studied by group management together with advisors in Boston Consulting Group.

Names remain under wraps but Kortum rejects any suggestion that he is under pressure to sell. His shipping company and subsidiaries are 100% owned and debt free.

“I feel pretty free to do what I want to do with the companies,” he said.

However, if mergers and acquisitions are again being considered, it is due to the belief that consolidation with a strategic partner will strengthen shipping activity and secure its future.

Kortum owns 35 boxships from smaller sub-panamax and “classic” panamax ships up to 8,500 teu.

Their financier, HSH Portfoliomanagement (HSHPM), has been seeking to recover the losses on the loans and it could transfer the fleet to other shipmanagers if that were likely to attain that goal. But Kortum deems that unlikely.

“Because in every meeting they tell us how satisfied they are with our management,” he said.

So the quest is for a potential merger partner where the fit is right.

“If we find somebody stronger than we are, I’m always willing to do an M&A process,” said Kortum.

“That’s what we are doing right now.”

Kortum is philosophical about the prospect of selling part of a shipping operation that he formed around 40 years ago. But he describes himself as “pretty flexible”, adding that he is prepared to sell a shipping stake “to benefit a structure that would take us forward”.

“I look at it from a strategic point of view,” said Kortum, whose group owns real estate and other businesses.

“Nobody can sell my company. It’s debt free, I’m not obliged to do anything,” he said.

“But if you find a solution that contributes to this consolidation process which is taking place right now in shipping, especially among the tramp owners, I am flexible to do that.”

Kortum flatly rejects speculation that emerged last week that he or his bank have put out a tender to sell his 35 containerships.

“There is no bidding process for any of our vessels. We are working to secure our growth,” he said.

He expresses surprise that such rumours emerged some 16 months after Norddeutsche Reederei H Schuldt agreed a restructuring finance deal with its HSH Nordbank in June 2016.

Part of the restructuring agreement involved a request by its German financier to proceed with the consolidation process, Kortum concedes.

“It means looking for a partner to be in better shape and to secure some goals,” said Norddeutsche Reederei H Schuldt director Martin Smith.

Kortum is “pretty sure” that the HSHPM — a bad bank set up to take up non-performing shipping loans — would not be keen to auction off the vessels or the loans.

He considers it likely that the banks need to recover losses from outstanding loans, and that might even mean holding onto the ships for several more years.

The bank does not want to make losses by selling the ships at market values that are lower than those on its books.

“They are to look at these loans and see what is the best way to get the money back," Kortum said. “Whether that be at the end of the day through consolidation, we’ve yet to find out.”