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People & Places – 09/20/2007
A Johnny K Production
Not even Cecil B. DeMille could take what would one presume would be an insipid discussion about moving coal and ore from here to there, while the audience, no less the panelists are imbibing, and make it a major media event. Of course, Johnny K is not your ordinary spinmeister. He began by wrapping the discussion in a mystery that can only be solved if you have an English public school background. Thankfully, Lorraine was here to explain the allusion, which refers to a series of novels by Enid Blyton. Who you might ask and does it matter? The answers to which are: don’t know and no. Fortunately, these were not the same takeaways from the panel discussion. Continue Reading
Market Commentary – 09/20/2007
The Tax Man Runs Amok
Our inbox was full last week with press releases from Norwegian shipowners decrying their government’s latest effort to enrich its coffers. Frankly, we didn’t understand why one of the richest and strongest economies in the world needed more tax revenues. Things however became clearer once we understood that it was a Socialist Party initiative.
On September 7th, the Norwegian government presented a proposal for a new shipping tax system in Norway that is modeled on the tonnage tax systems prevalent in a number of European countries. The effective rate is estimated to be 0.6% of 2006 results. The details of the new system will be presented in early October in the budget proposal for 2008 and will be decided upon in December to be effective with this year’s tax filing. Continue Reading
The Week in Review – 09/20/2007
Open for Business
In the summer a credit crisis loomed. Stocks fell, mortgage companies and hedge funds collapsed, and as the effects began to turn up in Europe and Asia concern grew that this was something much more dangerous than we dared believe. And, we dare say, our bank debt deal table for September has been strikingly slow to develop. But two weeks into the autumn season, the fed has slashed rates by half a percent, the Dow is back up, and bank earnings reports have been less dire than many had been led to believe. US mortgage problems did have a direct impact on available liquidity as certain buyers of debt were seriously harmed. However the indirect effects were amplified as mortgage defaults sounded a wake-up call for investors for all of the risky debt they had been buying, bring other highly leveraged markets such as LBO deals to a virtual halt. Continue Reading
People & Places – 09/13/2007
Conversations with…. Jacques de Chateauvieux, Chairman and Chief Executive Officer of Bourbon
Thanks to Tony Munoz at TM Marketing, we had the opportunity to sit down last week withMr. de Chateauvieux for a broad ranging discussion of the company’s activities, outlook and strategy.
With the predominant portion of its assets and capital invested in offshore oil and gas marine services and dry bulk, it was not surprising to find him ebullient. “These are extraordinary times; everything is up – rates, utilization.” Yet he remains realistic and is not a believer in the super-cycle. Whereas historically cycles were three to five years, he believes that this one might be extended for seven to ten years. In his macro view, which is widely held, requirements for oil cannot stop and existing production facilities are in decline. Oil must be replaced at least at the rate of drawdown. Nothing new here however the image he portrayed of everyone worldwide, with wealth trickling down, wanting to own a car provided an interesting perspective on growing demand. Continue Reading
The Week in Review – 09/13/2007
Fortress Files for $345 million Seacastle IPO
Fortress’ Seacastle filed an S-1 for its long-awaited IPO this week. The deal is being underwritten by Citi, Bear Stearns, Deutsche Bank and Merrill Lynch and is set to raise up to $345 million. Proceeds are to be used for working capital and other general corporate purposes, which will include the repayment or refinancing of outstanding indebtedness and may include the financing of future acquisitions.
The recently-formed holding company is one of the world’s largest operating lessors of intermodal equipment. The company’s business is split into chassis, container, and containership segments. A chassis, for those uninitiated into the US intermodal business, is a rectangular, wheeled steel frame, generally 23.5 or 40 feet in length, built specifically for the purpose of transporting a container over the road. Continue Reading
Market Commentary – 9/6/2007
Crunch Time
Even the relatively small niche market of financing the Scandinavian oil industry is not exempt from world events despite little, if any, change in fundamentals and credit risk. Today, after a quiet summer, markets should be booming in Norway with Nordea, Pareto and DnB NOR busy arranging bond deals. Unfortunately, that is not the case as there is limited liquidity for investment grade or high yield bonds. After a typically quiet July, which is the main holiday month in Norway, and a slower than usual August, it is evident that the subprime mess has reached Oslo. Continue Reading
Recent News – 09/06/2007
KKR Buys UN Ro-Ro: From Bridges to Sea Bridges
It started with municipalities raising cash by selling or leasing toll roads and bridges to private investors. Then it expanded into ports and terminals. And now, as private equity funds awash in cash seek to deploy dollars into global infrastructure and EBITDA multiples have expanded as equity returns have compressed, they are looking to the sea for investments.
Figures 1 and 2 tell the story. Ro-Ro and Ro-Pax ferries that have key franchises on key routes are being viewed more like bridges than ships – especially in fully developed Europe. This week, the trend accumulated its largest data point ever when massive U.S. buyout firm and maritime newcomer Kohlberg Kravis & Roberts (KKR) announced that it is in the process of buying a controlling stake in UN Ro-Ro, a cooperative of Turkish transport companies set up in 1993 when the war in Yugoslavia made over the road transport challenging. Continue Reading
Stock Exchange of Thailand Q&A
1.What are your exchange’s basic listing requirement (Market capitalization, operation history, revenue, income, etc.)?
Please see Figure 1 on the following page.
2. What is the total market capitalization of companies listed on your exchange?
The total market capitalization as of August 1, 2007 is 6,430 billion baht, at Bt32 per dollar that is about 200 billion US.
3. What proportion of companies listed on your exchange are based in the exchange’s home county?
Almost all companies listed on the Thai stock exchange are based in Thailand. Among shipping companies, RCL is an exception as it is based in Singapore. Continue Reading
Hong Kong SAR Stock Exchange
By David Beaves, Partner and colleagues, Ince & Co Hong Kong*
Hong Kong Stock Exchange’s Rise to a Worldclass Exchange
The first formal stock market in Hong Kong was the Association of Stockbrokers in 1891, later renamed the Hong Kong Stock Exchange (“HKSE”) in 1914. The growth of the Hong Kong economy during the 20th century lead to the creation of other co-existent boards, which eventually combined in 1980. The synergy created by the combination of the four boards in 1980 allowed the Hong Kong exchange to compete on an international level. A corporate restructuring of HKSE in 2000 grouped all the previous exchanges under the name of Hong Kong Exchanges and Clearing Limited (HKEx). Today, the World Federation of Exchanges ranks the HKSE third in the world by total equity funds and sixth by market capitalization. With a total of 1,173 companies listed on the two boards of the exchange, the HKSE total value of share trading in 2006 topped USD$832 billion. Over the course of the last two years the HKSE benefited from the listing of Chinese state-owned companies. In 2006, HKEx net profits rose 88% to $323 million, with overall revenue up 54% and an average daily turnover of $4.3 billion. It is now 10 years since the handover of Hong Kong to China by Great Britain. In 1997 few outside China would have predicted that the HKSE would have been as strong as it is today let alone that the reunification with China would be the main reason. Continue Reading
The Official Guide To Marine Finance Providers
Shipping Index
