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REEFER INDUSTRY
New lessors join the fray
Little over a year after announcing
that it planned to invest US$500
mill over the next five years to expand
its reefer leasing activities, Marubeni
America Corporation (MAC), parent company
of Carlisle Leasing, has apparently decided
that the reefer container business is
not one it wants to be in after all.
Carlisle, whose circa 115,000 TEU fleet
recently overtook that of GE SeaCo to
make it the world’s largest reefer lessor, is
being touted for sale, but with a price tag
of around US$900 mill, it seems unlikely
that any existing container lessor will be
tempted. After several months of discussions,
final bids are reportedly due to be in
by the middle of this month and a number
of private equity investors are said to be in
the running to take the company over.
A well-known German Bank, which
specialises in transport finance, is also rumoured
to be taking a close look at Carlisle
with a view to placing equity into the
German KG (Kommanditgesellschaft) fund
market and possibly keeping part of it for
its own account.
Either way, now would appear to be a
good time for Marubeni to sell and a good
time for a new owner to come into the
market. Initial capital investment returns
on reefer containers, which have lagged
behind those of standard dry freight
equipment in recent years, have improved
significantly of late. With a strong cash
flow, Carlisle may well prove to be an attractive
buy.
Indeed, the improved returns available
in the reefer leasing market have prompted
a flurry of activity in the sector with at
least three new entrants tossing their hats
into the reefer leasing ring in recent
months.
Magnum Lease Ltd, which claims to
have strong financial backing from German
KG funds, has been formed by Flex-
Magnum Lease has ordered 1000 x 40ft high
cube reefers fitted with MAGNUM machinery
from Shanghai Reeferco
Box Ltd and two other Hong Kong investors
to focus exclusively on the leasing of
reefers equipped with Thermo King’s
MAGNUM scroll compressor/R404A
machinery. Flex-Box, a well known container
trader and agent for a number of
container lessors, is also acting as Magnum
Lease’s agent in Asia.
Hitherto, the leasing sector has declined
to invest in MAGNUM units, but with an
increasing number of lines opting to buy
scroll compressor-equipped reefer machinery,
Magnum Lease clearly sees a market
opportunity. Though Thermo King has no
direct involvement in the company or its
shareholders, it has endorsed the use of the
name Magnum. “It is in our interests to
promote the company,” said Steve Bryant,
global director, of product marketing (container)
for Thermo King.
Magnum Lease is offering long term,
short term and finance lease options and
has already concluded its first term lease
deal with Singaporean operator Pacific International
Lines (PIL), reportedly for 100
x 40ft high cubes.
The latter units were built by PIL affiliate
Shanghai Reeferco (Singamas) and
according to Flex-Box managing director
Henrik Nielsen, Magnum Lease has now
placed an order for 1000 x 40ft high cube
units with the same manufacturer, some of
which will be fitted with Thermo King’s
AFAM+ (Advanced Fresh Air Management)
system.
The company plans to build MAG-
NUM reefers on a continuous basis and
hold them in stock in China or other locations
for immediate delivery. “Magnum
Lease intends to build new reefers in volume
and enter the lease market with an
aggressive approach to rapidly gain market
share,” Nielsen said.
Another new entrant concentrating
exclusively on the reefer leasing market
is Copenhagen-based Arctic Leasing,
formed earlier this year by former Carlisle
Leasing executive Søren Klinge (see
WorldCargo News May 2005, p28). Arctic
plans to build up to 1000 x 40ft high cube
units this year fitted with Carrier, Thermo
King or Daikin machinery according to
customer requirement.
The new company is offering a range
of flexible leasing contracts, including long
term operating leases with purchase options,
short term master leases, sale and
lease back and full payout finance leases.
Though the initial focus will be on 40ft
high cube equipment, Arctic is also prepared
to offer 20ft units, gensets and special
reefer designs, the latter on a lease
purchase basis.
Finally, Hong Kong-based Grand View
Development (GVC), which operates a
fleet of 110,000 TEU of standard dry freight
containers, has made a foray into the reefer
market with a term lease deal with
Sinotrans Container Lines (SCL) for 200
x 40ft high cube units built by Shanghai
Reeferco and fitted with Thermo King
MAGNUM machinery.
GVC has, in fact, had 50 units on lease
to SCL since 2001 but this latest deal marks
the company’s first serious move into the
reefer sector. “We see an opportunity in
the reefer market and intend to explore
future opportunities with our existing customers
as well as with new lessees,” said
GVC president Danny Wong. “While we
do not intend to build reefers on a speculative
basis, we will continue to buy based
on concluded transactions.” ❏
52
September 2005