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Back to the Futures – 12/13/2007
By Mike Reardon, Imarex Inc., Email: mr@imarex.com
A Transaction Revisited
Protecting the Brand
Writing about deals is our stock in trade. But in a sense, our coverage although thorough, detailed and analytic is, in a specific sense, incomplete. This became clear in talking to Eastwind Maritime’s management last week about the Chiquita transaction they closed last April. We were reminded that there is more to the deal than meets the eye. With the multitude of transactions in the market, it is difficult to fathom the motivation or strategic implications of the transaction itself. It’s not only about doing a deal, although often that is the case.
In this instance, the management of Chiquita clearly had issues. It was under performing financially, had a highly leveraged balance sheet, faced stiff competition and had regulatory issues with the European Union. Moreover, despite efforts to expand its product line, it was a company dominated by a single product that is very dependent on weather. Continue Reading
The Week in Review – December 13, 2007
It’s been a particularly interesting week in the ship finance markets. In the public debt markets Golden Ocean announced a $200 million convertible with ABG Sundal Collier and Nordea and Eimskip announcing a $545 million debt issue and $145 million loan. Tallink also announced a new $212 million loan with Danske Bank while National Chemical Carrier announced a new $392 million Shariah compliant debt facility with Samba Financial Group to fund 10 chemical tanker newbuildings, the largest Saudi shipping deal ever done with a single bank. Trailer Bridge hired Jefferies to explore strategic alternatives for the sale of founding family members’ 47.8% stake, worth nearly $70 million, and having already acquired Oceania Cruises and a 50% stake in NCL, PE fund Apollo further committed to the cruise sector with the $367 million acquisition of Regent Seven Seas Cruises from Carlson Companies.
The US equity markets this week, despite generally rough conditions, welcomed Teekay Tankers with a top-range price of $19.50 per share; the deal traded up over $20 before market close. The positive reception was a testament to the relationship Teekay’s management has built up with US investors as well as the success of Teekay’s financial engineering. Continue Reading
Words of Wisdom
Nobody Says It Better
It would seem strange to have to travel across the world, as we did in November, to hear the keynote speaker of our Korean conference espouse Marine Money’s philosophy in a way we never could. It is not merely the cold formula we use of “bridging capital and shipowners” that we use regularly. But better I should repeat the words of Mr. Eun Lee, the Vice Minister of the Ministry of Maritime Affairs & Fisheries of the Republic of South Korea: Continue Reading
Company Spotlight
Fly Like a Kite…
During our time in Seoul, we had the pleasure of meeting with Messrs. Hyung Jin Yoon, Heungkeun Yoon and Dae-hyun Sohn of SK Shipping and in an interesting turnaround they had prepared a formal introduction of their company for us. Not only is the company interesting in and of itself, we thought it was also representative of the shipping industry in South Korea in general and have therefore provided a peek inside for our readers. Continue Reading
The Week in Review – December 6th, 2007
Teekay Tankers (TNK) this week filed the first public forms for its long-awaited IPO. Parent Teekay has already spun off its LNG assets and its offshore assets, and now it is spinning off some of its tanker assets. Unlike Teekay LNG and Teekay Offshore, however, the tanker assets will not go into an MLP protected by long-term charter cover. Nine aframax tankers will instead be placed into Teekay Tankers Ltd., four of these with charters ending between 2008 and 2010 and the remaining five being placed into a Teekay pool where they will operate on a spot charter basis. The company calls this mix of short and medium-termTC contracts and spot trading a strategy for cash flow maximization, a nod to the widespread belief that over the long run the spot market still yields the highest returns. Continue Reading
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