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For Lease Finance: First Ship Lease
Diversified Portfolio Serves Clients and Unit Holders
Honorable Mention: Citi for Wan Hai Group
By Jim Lawrence
Vessel leasing provides enormous flexibility to any business. It can provide capital for growth, asset flexibility, balance sheet options and returns, of course, for lessors.
For a shipowner or a ship operator, there are a variety of options to turn to when considering a lease. In the current market, understanding the options and to whom to turn for advice and support is extremely important. In an environment of tight liquidity, increasing operating costs and fierce competition within the chartering and operating business, securing the proper finance structure, asset flexibility and partner in that effort matters greatly.
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Architects of Wealth
by Jim Lawrence
For many the legendary names Niarchos, Onassis, Ludwig, Pao, Bergesen and Moeller are synonymous with the great golden days of shipping in the early 70s, when mere voyages were all it took to repay a new building loan. When a shipowner married a former president’s widow, and a single shipping company could be an entire Nation’s pride and joy. Giant corporations such as IBM sought the great men out to sit on their boards. Yes, those were heady days and history clearly treats the men at the helm as giants. For a generation of ship owners who steered the industry through the shoals of the late 70s and most of the 80s only to enjoy some modest fortune as the Asian economies began to grow and influence trade, images of Maria Callas and Jackie O provided a glamorous backdrop reminder of how good shipping might be compared to their decades of really hard work.
Rankings Ruminations – Bye Bye OMI and other Bon Mots From over the Years
By James R. Lawrence & George Weltman
The Rankings results this year offer some food for thought. We were struck by the fact that OMI in its final stand alone year-end results finished an extremely respectable 17th, while its successful suitors D/S Torm finished 2006 in 18th position and Teekay Shipping 73rd. The cynical among us here viewed this acquisition by Torm simply as a ploy to move up in the rankings with perhaps some other ancillary benefits.
As that transaction was taking shape rumor had it in the Connecticut watering holes that one of the hidden treasures at OMI was its chartering team. We expect to see both Teekay and Torm flying high next year to account for the attractive price paid for OMI.
But, at the same time we are saddened by the departure of some key characters Messrs Stevenson, Bugbee, London and Ms. Haines who because of non-compete clauses may be forced to leave the industry for a period of time ranging from one to two years. Curiously, the higher the level in the organization the shorter the restricted period agreed. The same we are sure is not true of the size of the severance package. A loss for our industry will be a gain for another should they find the need to return to work in the interim. Continue Reading
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
Coverage Galore - Financial Analysts’ Ship Comes In
By Jim Lawrence
Independent research only shops have opened as well. Helane Becker, one of the great airline research analysts of the mid-1980s, is now covering shipping at The Benchmark Company. Continue Reading
Norwegian Bonds Enjoy Banner Year
By Jim Lawrence
2006 was another powerful year for the business of ship finance. Banking budgets were made by September and the last quarter made many a bonus. While the world’s capital markets continue to grow in product and structure ranges and shipping continues to access the most competitive available capital, nowhere was the excitement greater in 2006 than Oslo, where a robust bond market propelled dozens of financings.
Pareto estimates that the size of the market reaches $4 billion dollars. Total issuance in 2005 tripled from US$900 million to US$2.85 billion. And in 2006 the amount has grown to US$4.5 billion.
Take a trip around the world and in almost every maritime finance center new or near records will have been recorded in the continuing expansion of the business. Germany, Singapore, London, New York, Paris, Oslo, Athens, Shanghai, Tokyo, Seoul - name the center and the fact is those markets are being well served by a competitive, global and creative community of capital providers. Continue Reading
A Private Equity Success
By Jim Lawrence
The US energy transportation segment is a fragmented community with tank ships owned by the likes of OSG and Seacor at the one end and small barge companies serving local energy distribution needs at the other end. In between companies like Bouchard, Maritrans, Penn, Moran, K-Sea and others serve the thirsts of fairly large communities. Many in the mid to small size range are still private family businesses, but financing fleet replacement and modernization appears no problem. Is the K-Sea MBO model likely to be replicated, or was it just one of those special moments in time? Continue Reading
Welcome to the Class of 2005
You stand on the cusp of greatness. In 2006 you will complete a full year as new public companies and stand ready to join the ranks of great shipping enterprises from around the world. You have watched and learned from those who have gone before. You will be expected to stand shoulder to shoulder with long-established companies, some of whose heritages date back to before your management was born. Yet the world will cut you no slack in their relentless search for value and returns.
At Marine Money we stand by slightly choked with pride at your accomplishments to date, confident that you will not whither under the intense scrutiny of critics and analysts. Beware we say to those who might criticize, for youth will have its day.
It’s graduation season the world over. A time when young minds will step out into the real world or kindergarten or high school or college and begin their own next journeys of development. Each new IPO or capital market transaction feels a bit
like one of our own and we have the belly to prove it, but the simple fact is that the class of 2005 does represent the birth
of a new generation, as it were, ready to use all the tools to compete in a truly global industry where every $1,000 is significant and demand and regulations flatten the competitive arena.
The list of 18 new listings dating from 2005, which we could not include in this years universe of the Ranked because they did not have a full year of financial results with which we could do fair comparisons are in essence blank slates. Their stories are yet to be written. Who will be the next Teekay? Who will be the next Nortankers (heaven forbid!)? Continue Reading
Time to Celebrate Results
We had household names, companies involved in megamergers, giant liners, branded cruise lines, and diversified conglomerates all striving to achieve the best possible returns for their shareholders and themselves.
Ship Owners Are a Bullish Lot –Deloitte & Touche/Marine Money Survey
By Prasanth Prasannakumar and Jim Lawrence
The legendary investor Warren Buffett has said, “In a commodity type business you’re only as smart as your dumbest competitor”. The overwhelmingly upbeat tone of the respondents to the first Deloitte & Touche/ Marine Money survey defies the commodity – like nature of the maritime transportation business. This may well be evidence that trends in shipping may be precursors of things to come, leading indicators of what the future holds for the economy, or simply that shipowners are an optimistic lot.
Approximately two-thirds of the executives surveyed felt that the business outlook for their firm over the next year was positive, and more than half expected their fleet to grow. This is nothing short of astounding, especially given the year that we are just coming off. The bloodbath in the stock markets, terrorism threats, oil shocks, wars, political unrest all contributed to a generally subdued mood in the rest of the economy. Shipping has once again proven to be counter-cyclical.
The enthusiasm cut across all size companies, with 60% of those with annual revenues of less than $50 million expecting fleet growth, 57% of those whose company revenues are between $50 million and $100 million and 50% of those whose annual revenues are over $100 million expecting growth as well.
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