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CSAV shareholders invest US$1.2 billion - mostly to buy 9 new ships

CHILE's Compania Sud Americana de Vapores (CSAV), the world's 11th biggest carrier, has received a US$1.2 billion injection from shareholders to strengthen its books after it warned of "very negative" earnings for the full year.

CSAV said it will use the funds to finance its $1 billion order of nine new ships to be delivered between 2010 and 2012, which the company says it is vital to reduce the volatility of the results and improve its competitiveness.

The carrier posted a net loss of $525 million for the first half and is expected to suffer a big third quarter loss too, despite measures to cut costs in April and reduce exposure to loss-making routes, reports Alphaliner.

It said the shipping line has reduced its operational capacity by 28 per cent since March and has returned or sublet most of its excess tonnage in the last six months.

The company had announced in early September that its main shareholder, Quinenco SA will subscribe to $1 billion of the capital increase, while Maritima de Inversiones (Marinsa) will subscribe to $100 million of the planned capital increase. The other shareholders are expected to contribute the remaining $100 million. The company had raised $500 million in a separate capital increase in July, the report said.

The carrier has already taken delivery of two 6,500-TEU ships and two 8,000-TEU vessels with five more 8,000-TEU ships due to arrive over the next 10 months.

Alphaliner added that the seven 8,000-TEU vessels have become surplus to its requirements and have been chartered to Maersk Line.

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