Bermuda-registered Sea Containers has signed the main agreement with a General Electric Co. (GE) unit for a new joint venture that will operate existing marine container fleets and become one of the world's largest container leasing operations.

The deal signed with GE Capital Services will establish GE SeaCo SRL, a Barbados Society with Restricted Liability, pending regulatory approval.

GE SeaCo will also acquire additional containers for leasing out to both the marine and land intermodal markets.

GE SeaCo will effectively be a 50/50 joint venture with initial capital and member loans totaling some $64 million.

GE Capital will purchase $25 million of equity in Sea Containers Ltd., with the funds being dedicated to the joint venture. Profits from the existing fleets after lease payments, will be distributed on a 70/30 basis in favour of GE Capital.

Sea Containers will be leasing 270,000 twenty-foot equivalent units (TEU) to GE SeaCo and GE Capital, and 850,000 TEU through its Genstar Container Corporation subsidiary. In 1997, the combined revenue of these two fleets was $560 million.

Sea Containers will retain its ownership of its six repair and maintenance depots, its six container manufacturing facilities and its two container ships.

President of Sea Containers, James B. Sherwood, who will serve as chairman of GE SeaCo, said, "The combination of the Sea Containers and Genstar fleets affords the opportunity for major cost savings both in terms of fixed overhead and operating expense.

"Redundant offices will be closed and depot services will be combined to achieve lower costs. We will join the best elements of Sea Containers and Genstar's systems which will enable us to offer customers increased services.'' Executive vice president of GE Capital, Nigel D.T. Andrews, who will serve as deputy chairman of GE SeaCo, said, "GE SeaCo will be a vibrant new player in the container leasing industry.

"GE Capital will take an active role on the board to help GE SeaCo prosper.

We expect world trade in containerised goods to continue growing and, coupled with our customers' needs to increase flexibility, reduce costs and replace over-age containers, there are ample opportunities for this new joint venture.'' GE Capital Services has assets over $250 billion, and is a global diversified financial services company with 28 specialised businesses.

A wholly owned subsidiary of GE, it is based in Stamford, Connecticut and provides equipment management, mid-market and specialised financing, specialty insurance and a variety of consumer services such as car leasing, home mortgages and credit cards, to businesses and individuals around the world. GE is a worldwide manufacturing, technology and services company.

BUSINESS BUC