2007

The global ship finance market continues to bustle along this week, in defiance of any negative investor sentiment caused by concern over China. Among a variety of interesting earnings releases and reported deals, were notable growth programs among public companies. French company Bourbon Offshore, for example, is ordering 46 next generation vessels for a total value of EUR 560 million, or approximately $760 million. NY-listed TBS International has announced a newbuilding program with China Communications Construction Company Ltd. and Nantong Yahua Shipbuilding Co., Ltd. for six multi-purpose and tweendeck vessels worth $212.5 million, which RBS has indicated it will likely finance subject to the appropriate negotiations and agreements. And Eagle Bulk Shipping, also listed in NY, has announced a program to acquire three 2002-2003 built Japanese supramax vessels and to construct a further two supramax vessels for $205.1 million. To help finance this expansion the company has sold the oldest and smallest vessel in its fleet for $12.525 million and has just closed a $102 million follow-on offering led by UBS – coming on the heels of a January Bear Stearns-led secondary (i.e. selling shareholder) offering of around $125 million.

On the M&A front, BW Offshore has reached an agreement to combine with APL that values the latter company at just over $600 million. The deal is subject to a voluntary offer to APL shareholders whereby they receive NOK 85 cash or 3.0240 BW Offshore shares per share in APL. Private equity’s presence in shipping continues to grow as $12 billion fund Apollo Management agrees to acquire AMA-affiliated Oceania Cruises in a deal valued at $850 million, with Oceania advised by Lehman Brothers and UBS Securities.

This is only an excerpt of The Week in Review – 03/01/2007

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