Sunday, July 12, 2009

Ethiopia's flag carrier, Ethiopian Shipping Lines (ESL), is to buy nine vessels from China

Reliable sources told The Reporter that a Chinese ship-building company has invited ESL to buy the nine vessels on an installment payment to be settled within ten to fifteen years. According to the sources, the company made the generous offer because of the economic downturn which had significantly reduced order for new ships. The construction of these ships were reportedly ordered by other shipping companies which declined to take them because of the global market turmoil.

Ambachew Abraha, chief executive officer of ESL, told the reporter that the negotiation was at early stage. “It is too early to comment. We will make it public when we finalize the negotiation,” Ambachew said. However, our sources said the company’s board of directors had given the green light for the purchase of the nine vessels. The price of the vessels is not known.

The public relations office with ESL confirmed that there was an ongoing negotiation with the Chinese counterpart. However, it said no agreement had been concluded. “We would notify you when a deal is made,” the office said. ESL has nine vessels with has a total tonnage of 150,000. Last year the company made a net profit of 400 million birr. ESL has a monopolistic right on the country’s import export-business.

ESL was founded in1964 and started operation in 1966 with three newly-built ships (two general cargos and one tanker).

It was established as a share company with a capital of 50,000 birr, subsequently to be raised to 3,750,000 birr. Taurus Investment Inc. of Washington DC Agreed to subscribe to 51 percent of the capital requirements by designating two directors of the company. The Ethiopian government underwrote the remaining 49 percent of the capital required, designating two directors of the company. Eventually, the American sold his share to the government and the company has been fully owned by Ethiopia since 1969/70.

The company is now a share company with a capital of 289 million birr and operates under the supervision of Public Enterprises Supervising Authority .

source