FURTHER shipping line consolidation among the world's top 20 carriers is being hindered by ownership structures, according to Alphaliner's assessment of the industry's merger and acquisitions prospects.

Fourteen out of the top 21 carriers are publicly listed companies, yet they are controlled by either state-owned entities or family-owned concerns that tend to be more resistant to takeovers.

The last mega-merger wave in the liner industry occurred between 1997 and 2005. It involved top players P&O and Nedlloyd, Hanjin Shipping and DSR-Senator, NOL/APL, Maersk/Sea-Land, Maersk and P&O Nedlloyd, and Hapag-Lloyd acquired CP Ships.

Five of the liner companies acquired were publicly listed without controlling shareholders, making those acquisitions easier to execute.

The latest merger involves Germany's Hapag-Lloyd and Chile's CSAV. There is potential also for the two leading Chinese carriers, Cosco and CSCL to merge. However, none of the other state controlled carriers give any indication they were willing to give up control.

Most controlling shareholders of other major shipping lines are either unable or unwilling to pump additional cash to recapitalise the carriers, with several resorting to asset sales to maintain liquidity.

For example, the Israel Corporation's reluctance to rescue Zim with additional cash injections has pushed the line further into the hands of its creditors.

Despite a belated injection of US$200 million under a new restructuring plan, the Israel Corp's stake in Zim is to be cut from 99.7 per cent to only 32 per cent.

Zim is not considered a viable consolidation candidate, due to its special ties to Israel's administration.

The government's golden share in Zim restricts the transfer of the ocean carrier's shares and stipulates that the company has to remain incorporated in Israel, with a majority of Israeli board members.

*NEWS SOURCE