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Rankings – Highlights and Accomplishments
The global integration of financial markets – while not complete – is moving ahead fostered in part by the continued relaxation of capital and exchange controls which makes realizing gains more feasible”, Marine Money wrote at the start of its inaugural Rankings issue in September 1991. We went on to comment that there was more reporting transparency from the community of public companies, accounting regularity and stock market regulation but that there were still complicating challenges as the world of global capital markets access was at that time just developing. It was a time of full steps forward and occasional half steps back.
This year we again rank some of the world’s most significant shipping companies. We note that in the top ten alone there are companies from the U.S., South Africa, Belgium, Thailand, Denmark and Singapore! An amazing spread but one reflective of the breadth of the international shipping industry and the expansion of market performances. Continue Reading
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Market Commentary – 05/31/2007
Top Tankers Repurchase Vessels, Improve Cash Flow
Earlier this week Top Tankers announced they would reacquire four Suezmax tankers sold in 2006 in a sale/leaseback transaction. Although the price was unnamed, Cantor Fitzgerald analyst Natasha Boyden estimates the transaction to be in the range of $200- $215 million based on current second hand vessel prices. Top Tankers will fund the acquisition with 70% debt resulting in expected lease payments to decline substantially and depreciation and interest expense to rise. Cantor Fitzgerald raises their 2007 and 2008 EPS estimates to $(0.10) from $(0.390) and $(0.24) from $(0.44), respectively. Their adjusted their EBITDA now estimates to $55 million (from $27 million) for 2008. The new estimates do not take into account management’s recent proposal to execute a 2:1 reverse stock split. Continue Reading
People & Places – 05/31/2007
Headhunter Season!
We have had to hire additional data entry folk to assist keep up with the whirlwind of our friends and colleagues making professional moves. In no particular order and with best wishes for all, both those moving and those responsible for filling holes:
Nordea’s Head of Corporate Finance Ivar Myklebust has accepted the position of CFO at Norden. Kevin Kennedy, has left his role as CFO of Seaspan to join Synergy. Kevin, who in a former career was with GE Capital, joins an august pair of Marine Money Week speakers currently operating without affiliation (though clearly busy), Hamish Norton and Robert Bugbee. Continue Reading
The Week in Review – 05/31/2007
From K/S to Copenhagen Stock Exchange: Nordic Tankers Seeks Danish IPO
We knew the KS and now DIS markets in Scandinavia were liquid. And we know the Oslo public equity markets are liquid. But Nordic Tankers is now testing the Copenhagen public equity markets in search of another source of liquidity. It is also taking to Denmark a business model that has been tested in various forms in public equity markets by shipping companies around the world over the past two years. It can be an MLP, regular or synthetic, or a C-Corp in New York, a shipping investment trust in Singapore, or a publicly traded KG fund in Germany. The effect is ultimately the same: to take the shipping industry’s most efficient private equity market – leasing – and source the equity from public investors, who then too may of course share in the returns. Continue Reading
Investing Opportunity – 05/24/2007
Tufton Oceanic Launching New Small Cap Fund
On the day we looked over Tufton Oceanic’s latest hedge fund offering, Oceanic Small Cap Fund, a $100 to $200 million fund focusing on the energy and shipping sectors, oil hit $70 a barrel. Marine Money Week was a month away and Navios had delivered a 131% return since the previous Marine Money Week 2006.
Maybe it is the positive macro trade and energy consumption characteristics of the current world economic scene, recent share price performances or perhaps it is the successful track record Tufton’s hedge fund management brings to the table, but we are confident that the raise being undertaken will be successful.
The Fund out raising money now targets a final closing in July. $50 million is already committed. Continue Reading
Market Commentary – 05/17/2007
Backing up Diana
JP Morgan’s Jonathan Chappell, together with Glenn Muller and Darren Hicks, initiated coverage on Diana Shipping last week, endorsing the stock with an Overweight rating alleging the company is well positioned to pay sustainable and increasing dividends to investors.
Headquartered in Athens, Greece, the Simon Palios steered dry bulk shipping company consists of 13 panamax carriers and four capesize carriers (plus two newbuilds) aggregating 1.7 million deadweight tons in capacity and averaging just 3.1 years of age, by year’s end. The extensive fleet is currently 78% covered by time charters with a drop down to 43% in 2008. Chappell maintains that extensive time-charter coverage lends visibility and stability to the company’s near full-payout dividend strategy however the short-term nature of a majority of these contracts situates ‘Diana’ in a favorable position to receive the stronger rates forecasted in 2008 in consideration with the recent favorable dry bulk market these past two years. Moreover, short-term charters provide flexibility and the ability to better manage the cycle. Favorable industry fundamentals should support charter rates and asset valuations through at least 2008. Continue Reading
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