February 26, 2014 [Pan European Terminals PLC] - Pan European Terminals was one of the sector's risers after it reported that Baltic Top, its 100%-owned subsidiary, had recently increased capacity by about 10%, through an extension to its storage facilities to over 12,000 metric tonnes.
At Baltic Top, its 100% owned subsidiary, the Company has recently increased capacity by approximately 10%, through an extension to its storage facilities to over 12,000 metric tonnes (MT). The new tanks, which are arranged horizontally, are able to carry all products required by the local market, including additives, which now allows the Company to blend products specifically required by certain customers.
A further 10% capacity increase is planned, through the installation of new vertical tanks, for general storage. These will be installed once the weather improves later in the first quarter. Both projects will be financed out of Baltic Top’s cash reserves. In December 2013, Baltic Top saw over 18,000 MTs of throughput, its second highest monthly rate since 2010.
Further, the Company intends to install a 350 metre, 8 inch pipeline allowing access to the waterside jetties in conjunction with the neighbouring shipyard. The pipeline has reversible flow capabilities and will allow Baltic Top, for the first time, to receive Marine Gas Oil by sea and also bunker barges and sea-going vessels from the government owned shipyard adjacent to the Baltic Top property. This crucial improvement is a major development for Baltic Top and, together with the increase in storage capacity and blending facilities, provides the board with high expectations for the continued growth and success of its 100% owned asset.
Petro Bunker International (PBI)
In the Netherlands, PBI, the Company’s 100% owned facility which leases storage tanks in Rotterdam, has been trading at maximum capacity since last September. The Company is in discussions over new tanking projects and will update the market when these have been concluded.
Dan Balt, at Aabenraa in Denmark, continues to operate well, although the programme to expand its product range and increase profit per ton is still in its early stages. The Board is confident that by Q2 2014 it will be able to report the results of this exciting new programme to shareholders. Dan Balt is a large ongoing project for the Company and shareholders are reminded that this is a long-term development plan, the results of which are expected to have a positive impact on cash generation for years to come. It is essential that Dan Balt’s client base is nurtured so as to allow the terminal to service a variety of clients and products.
The Company announces that it has received an offer from its partners in Rosbunker, for the Company to acquire the remaining 50% of the asset. The Board is considering this offer and will update shareholders as and when a binding contract has been agreed. Until this time, the asset will remain frozen under a legal order.
The amount of time and effort that the Company has put into resolving the issues at Rosbunker cannot be underestimated, however the Board remains conscious of the political and geographical risks involved in such a location as Rosbunker and it is taking steps to mitigate these to the extent possible. Whilst this can extend the time to complete any transaction, it is an essential part of the process after the historical problems.
Should this transaction progress to conclusion, the Company would expect to involve a local third party through back-to-back sale and purchase agreements, and at this time, the Company does not foresee the need for additional financing and/or financial support secured on assets outside of Rosbunker or in the form of equity, in order to complete the acquisition.
New Opportunities
The Company continues to look at new opportunities and projects in Europe and elsewhere, but as yet has not concluded any binding agreements, although it is currently in advanced discussions on one project.
The Company continues to trade in-line with management’s expectations and will provide a further update to shareholders at a later date.
