TORONTO, Ont. — Upper Lakes Group Inc. has entered into a definitive agreement with Algoma Central Corporation to sell to Algoma its partnership interest in Seaway Marine Transport and related entities along with the vessels and assets owned by Upper Lakes Group and its affiliates and used by Seaway Marine in its Great Lakes – St. Lawrence Waterway dry-bulk freight business.
“This is a historic transaction in that Upper Lakes has been part of the Canadian shipping landscape for 80 years, and that 30 years ago there were more than 15 Great Lakes shipping companies; with this announcement there will be two: Algoma Central and CSL Group,” noted Elian Terner, director
Investment Banking with ScotiaCapital’s transportation and logistics team, which put together the deal.
Under the terms of the transaction, Algoma will acquire 11 vessels currently owned by Upper Lakes Group, consisting of four gearless and seven self-unloading bulk freighters. Algoma will also acquire Upper Lakes Group’s interest in two gearless and two self-unloading bulk freighters that are now owned jointly by Algoma and Upper Lakes Group as well as ULG’s interest in a self-unloader currently under construction at the Chengxi Shipyard in China, which is expected to arrive in Canada in July, 2011.
The purchase price under the transaction is $85 million, subject to certain adjustments. The transaction is expected to close by the end of March 21, 2011, subject to customary closing conditions including receipt of all required regulatory approvals.
Upper Lakes will continue to operate its grain business, shipyard, various repair facilities and some companies not directly related to shipping.