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In March 2007, the controlling shareholder of Crowley Maritime offered $2,990 per share to buy out public investors, a price equal to 258% of the last traded price of shares when the Forum started in April 2004.

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The article copied below appeared in TradeWinds, the shipping industry publication. The weekly paper and its associated web site provide regular coverage of developments concerning Crowley Maritime and other water transportation companies.



Crowley waits for green light

Crowley breaks the ice on Prudhoe Bay.

Common shares in Crowley Maritime Corp are now worth $1,402 apiece, according to an independent appraisal.

The valuation by an unnamed independent consultant comes in connection with a new Crowley employee stock ownership plan (ESOP) that was funded in June with a loan from the company.

The closely held and thinly-traded tug, tanker, shipmanagement and liner company reports the figure along with a muscular set of second-quarter results.

Meanwhile, Crowley is waiting on a judge in Nome, Alaska to remove a final hindrance from a long-delayed acquisition.

The purchase involves fuel distributor Northland and associated entities plus barges, tugs and other assets.

Alaska’s attorney general had sued to stop the move as giving Crowley too much control of the Alaskan fuel distribution market. A settlement of the lawsuit a year ago had been protested by local customers and governments.

Since then, Crowley has been at work in the state’s supreme court to stop the Nome judge from going public with documents that contain trade secrets “that would give an unfair advantage to customers as well as competitors”.

A resolution is now at hand, however, and the company is optimistic that it will be able to conclude the acquisition during the present financial quarter. The price is expected to be up to some $77m including compensation for the net working capital of the entities being acquired.

Meanwhile, the company notes that it spent $9.5m during the second quarter acquiring a chartered-in vessel that is thought to be a 33-year-old single-hull tanker. By doing so, Crowley says it escapes some $32m in time-charter hire through 2009.

Sources indicate that the vessel is the 19,000-dwt products-chemical carrier Sea Venture (built 1972), previously owned by a partnership of individual investors connected with Atlantic Tankships of Norfolk, Virginia, the former manager.

Crowley Maritime Corp is reporting a strongly improved $10.4m of net income on $269.0m of operating revenue for the second quarter of 2005. Operating income was $14.2m. On a per-share basis, holders of Crowley common stock netted $62.60 for the quarter.

The quarter’s net income was thus about 14 times greater than in the corresponding period of last year ($761,000), while operating revenue was only around 6% higher, mainly as a result of rate increases. The rise in quarterly operating income was from $3.6m to $14.2m despite rising vessel expenses including bunkers.

Crowley adds that figures for the strong quarter were “partially offset by a $7.0m decrease in revenues due a shift in timing of operations in Far East Russia”.

Virtually all shares not beneficially owned by president, chief executive officer and chairman Thomas B Crowley Jr are common stock, and Crowley has a 78.2% voting share in the family company. Quarterly net income attributable to common shareholders in the closely-held company rose from $0.4m to $9.7m.

Looking at the first six months of the year, Crowley’s net income was $12.2m on operating revenue of $510.9m. Operating income for the first half was $21.7m. The per-share take was $73.97.

By comparison, Crowley logged a $4.1m loss in the first half of 2004.

In its filing, Crowley says it has executed agreements worth $34.9m for the acquisition of “certain equipment” for delivery in 2005 and 2006.

The company adds that it contracted last year for the construction of two articulated tug-barge units (ATBs) at a cost of $85.4m including owner-supplied equipment. As of 30 June, $41.9m of this had been spent. The ATBs are to be delivered in 2006.

Oakland, California-based Crowley Maritime Corp is by some measures the largest Jones Act or US cabotage shipowner. It operates in four segments, namely liner, ship assist and escort, oil and chemical distribution and transportation and energy and marine services.

By Bob Rust in Stamford



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