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Pac Basin Private Placement
Having received a general mandate to issue new shares from the shareholders at the AGM last month, Pacific Basin Shipping Limited (“Pac Basin”) wasted no time and sold the full allotment of 158,598,010 shares to Goldman Sachs Asia L.L.C., as placing agent, on a fully underwritten basis. The offering will raise approximately HK$2.144 million (US$275.132 million based upon US$1=HK$7.7935) in cash before expenses. The directors saw this as an opportunity to raise capital for the company while widening the shareholder base.
Around the World with Marine Money
The relatively quiet ship finance market over the past couple of months is beginning to show signs of life. The equity market this week picked up when K-Sea GP Holdings LP has filed for an IPO. Lehman Brothers and Citi are running the deal, which is set to raise up to $100 million. The company’s cash generating assets consist solely of partnership interests in US-listed K-Sea Transportation Partners, which currently operates a fleet of 73 tank barges, one tanker and 59 tugboats that serve a wide range of customers, including major oil companies, oil traders and refiners. We look forward to exploring this very interesting deal in more depth next week.
Meanwhile, Frontline has moved forward with the listing of Independent Tankers Corporation on the Oslo OTC market under the symbol ITCL. StealthGas is using its public status to boost its position as a market consolidator. Ever since its 2005 IPO, Harry Vafias together with CFO Andrew Simmons have steadily grown StealthGas’ fleet from nine initial and ten identified LPG carriers to its current 39 vessels. But the growth has been quiet, with relatively small acquisitions, credit facilities and offerings – until the company has announced a major acquisition in the form of an agreement to acquire ten vessels for a total of $204 million.
Double Hull Tankers Follows On
April was certainly the month the shipping equity markets sprang back to life – at least for follow-on offerings. Seaspan (SSW) was out first on April 10 with an offering that raised nearly $240 million, followed by Teekay LNG (TGP) on April 17 with a $165 million offering. Then this week Double Hull Tankers (DHT) saw the positive trend and took the opportunity to position themselves for future acquisitions by raising $84 million with the offering of 8,000,000 shares at $10.50 per share in a deal led by Merrill Lynch and UBS with Dahlman Rose also acting as an underwriter. The offering was upsized by 1,000,000 shares on the back of strong institutional demand, though it priced at a relatively steep discount of 12% to where the shares were trading when the transaction was announced just one day before. The accompanying graph shows how the price performance of SSW, TGP and DHT post offering announcement compare. Continue Reading
Just Another Day in the Life of the Jones Act
When we began our career in ship finance many years ago, the business manager determined that we would avoid financing US Flag vessels because decision-making there was politically motivated, capricious and generally had nothing to do with economics. The one exception, and we are dating ourselves, was the financing of the Alaskan North Slope tanker fleet since they were bareboat chartered to the major oil companies which assumed the “political risk.”
Fulford-Smith Out; Andi Case In
As the Russian battle over valuations continues and Clarkson has to set aside even more money to fund their legal battle, the question on everyone mind is can their ace tanker broker Andi Case transform himself into a CEO overnight.
Ask any CEO of a public company and they will confide that the job is vastly different and more demanding than any line manager or brokers role. To take on the reins in the midst of a fight is only tougher.
Neptune Offshore
Norway and the offshore industry, at least from the perspective of finance, have become synonymous and Pareto Private Equity (“Pareto”) has played a key role in this development. This week Pareto announced the successful private placement of equity on behalf of Neptune Offshore AS and Neptune Subsea IS, a Norwegian partnership similar to a K/S, with private and institutional investors. The deal was placed in the Norwegain market and sold quickly. The capital raised ($25 million) on behalf of Neptune Offshore will primarily be used to acquire a controlling equity interest in Neptune Subsea IS which will be the contracting party for two Ulstein SX 130 design multipurpose offshore vessels to be built at Sinopacific Shipbuilding in China for delivery in the 1st and 2nd quarter of 2010. To pay for the newbuildings, Pareto raised an additional $50 million together with a $25 million shareholder guarantee on behalf of Neptune Subsea. The investor group included both hedge funds and strategic investors all of whom have long experience in the offshore industry.
MukemmelBirForum
Last Thursday, the 5th annual Marine Money Istanbul Ship Finance Forum took place within sight of the Bosporus at the Swissotel. In our mind, there could not be a more appropriate setting for this or any shipping conference.
After greetings from Marine Money’s Mia Jensen and Kevin Oates, Mr. Metin Kalkavan, as Chairman of the Turkish Chamber of Shipping gave brief introductory remarks which included interesting numbers on the Turkish shipbuilding industry. He was followed to the podium by Mr. Lucien Arkas, the Chairman of Arkas Holdings, who gave the keynote address. Mr. Arkas provided a concise history of his 44 years in shipping. But more importantly, he attributed the Turkish owners’ success in this industry to their high level of entrepreneurship, courage and self-esteem.
FSL Trust Enjoys Turkey
Although we certainly cannot take credit for it, the timing of our presence in Turkey was propitious. While presenting leasing opportunities to the Turkish shipping community at our Istanbul conference, Ron Dal Bello was busy closing a deal with Geden Lines on Friday behind the scenes.
Our Asian editor, Rodricks Wong, provided excellent coverage of the transaction, which we have included here.
The Week in Review
The money, apparently, is in oil as two of the industry’s biggest gurus, John Fredriksen and George Economou, both make aggressive plays into the rig space. Mr. Fredriksen, of course, has long been making investments into various facets of the offshore industry and has either spawned or acquired a bevy of offshore companies to that end. It was hardly earth shattering this week when Seadrill announced that it had acquired 200,000 shares and entered into forwards to acquire 16,300,000 shares in US-listed Pride International, an offshore company with a market capitalization of $7.2 billion. The shares amount to a 9.9% stake, worth around $708 million. The move prompted Pride International to take action to lower the threshold level of ownership to trigger its stockholder rights plan from 15% to 10%. Seadrill has also asked Pride for a meeting to discuss “potential strategic benefits for both parties of a transaction between the two companies.” A merger could be on the cards – or it could not be. Mr. Fredriksen has shown himself as skillful an investor as an acquirer, using each strategy as it suits him.
Marine Money Asia Searches for Sales Manager
We are looking for a Sales Manager with fluent language skills in Mandarin, Korean or Japanese and welcome any potential candidates interested in a very exciting work environment with plenty of challenges and growth opportunities. The position will be located in our Singapore office. If you are looking to kick start a career in ship finance, we can offer this opportunity today! For more information, please visit http://shmyl.com/idxpson or contact Peder Bogen at pbogen@marinemoney.com.
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