Algoma Central has secured the title of the largest Canadian shipowner on the Great Lakes with an agreement to acquire the vessels and marine assets of Upper Lakes Group (ULG).
In a statement issued late Feb. 25, Greg Wight, president and CEO of Algoma, which is 110 years old, said the company hopes to conclude the deal by the end of March. Algoma operates 13 self-unloading dry-bulk ships as well as five bulk carriers.
Pending regulatory approval, it will acquire ULG’s four self unloaders and seven bulk carriers as well as ULG’s interest in a self-unloader currently under construction at Chengxi Shipyard in China, which is expected to arrive in Canada in July, 2011. ULG was founded 80 years ago in the Great Lakes grain trade.
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Canada Steamship Lines is the other major Canadian operator on the lakes. It has 11 self-unloaders and eight bulk carriers.
Algoma is also gaining full control of four ocean freighters it jointly owns with ULG as well as its share in Seaway Marine Transport (SMT), which operates the Algoma and Upper Lakes ships in a pool carrying coal, iron ore, grain and other dry-bulk freight.
The total purchase price was not disclosed. Algoma is a publicly traded company, while ULG is owned by Toronto entrepreneur Jack Leitch.
“The very difficult decision to sell to Algoma was based on a number of critical factors including the large capital requirements required to take the business forward for another quar ter-century,” said Leitch in a statement. “We were also motivated by the desire to ensure the future employment of our employees and continued trade for our vessels.”
ULG will continue its grain-handling, marine repair, industrial, liquid bulk and property development services, he added.
“Combined with the recent announcement of our significant investment in state-of-the-art new Equinox Class lake freighters, the acquisition of the ULG fleet and the remaining interest in SMT will allow Algoma to enhance its focus on its domestic drybulk marine transportation segment and the very important task of fleet renewal,” Wight said.
The deal has no impact on the two ships the Canadian Wheat Board has ordered along with Algoma and ULG. They will be crewed by Algoma employees and be part of the SMT pool.
