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Baltic Oil Terminals Plc has announced that it has today entered into an agreement for the acquisition of Haahr Tank-Lager A/S for US$9.9m (approximately GBP6.3m) in cash.

Haahr Tank operates a 160,000-cubic metre refined oils terminal, located at Aabenraa in Denmark. Baltic Oil said the acquisition is being financed through the issue by Dan-Balt Terminals Ltd, a 100% subsidiary of the company, of secured fixed rate loan notes to the value of US$11.0m (approximately GBP7.0m).

A valuation report, commissioned by Baltic Oil, gives a new build cost of US$42m. Baltic Oil said the purchase price reflects that, under the terms of the acquisition, the vendor Haahr Group will retain the use of 35,000 cubic meters of capacity at the terminal for the next five years.

Reasons for the Acquisition

Baltic Oil said the acquisition of Haahr Tank represents 'a substantial step forward' in the fulfilment of its strategy. The company summarised the advantages of acquiring the oil terminal as follows:

- Its location, roughly midway between Baltic's Kaliningrad and Europort businesses, will provide enormous flexibility to Baltic's customer base

- Haahr Tank's two berths and ability to host larger oil tankers than in Kaliningrad will facilitate large volumes through the terminal as customers seek to bulk up shipments

- Haahr Tank's existing facilities requires little or no capital expenditure

- Longer term, there is space on the site for the expansion of capacity by approximately 20 percent

Simon Escott, CEO of Baltic Oil, commented: "This acquisition, alongside our existing businesses provides tremendous opportunities for our customers and ourselves, whilst our cash position and current cashflows means that servicing the financing of the acquisition does not put any undue strain on Baltic.

"The application of our business model, which has swiftly and substantially boosted profitability at our Rotterdam operations should equally stimulate a substantial increase in throughput at the terminal and therefore increased cashflow and profitability."