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Euroseas – Shelf and Possible Exit
Last week, Euroseas Ltd. filed a shelf registration to sell up to $400 million of securities including common shares, preferred shares, debt securities, warrants, purchase contracts and units. In addition, the registration statement provides for the sale of up to 11,249,677 shares in a secondary offering by Friends Investment Company Inc., a company controlled by the Pittas family, which owns 10,833,009 shares and Eurobulk Marine Holdings Inc., also controlled by the Pittas family and the owner of 416,668 shares. Together these shares represent 36.19% of the shares outstanding.
Scorpio Gets New Club Financing and Fixes Old
Last week, Scorpio Tankers, Inc. entered into an agreement with Credit Agricole CIB and Skandinavsika Enskilda Banken AB for a new $92 million newbuilding credit facility, which will be utilized, to partially finance four of the five MR newbuilding of 52,000 DWT being constructed at Hyundai Mipo Dockyard. Currently, the Company has $134.7 million remaining to be paid on the construction contracts for the four newbuildings and $33.6 million for the fifth newbuilding, which will not be covered under the latest financing.
The new CA-CIB and SEB credit facility provides for the partial financing of the pre-delivery and delivery installments for the four newbuildings, which are scheduled for delivery between July and October 2012. The $92 million facility consists of four tranches, one for each vessel, each in the amount of $23.0 million, representing approximately 61% of contracted price for each vessel. Advances will be conditioned upon the borrower’s providing the first 39% of the contract price of each vessel in the form of equity as well as the borrower meeting certain other conditions precedent. Repayable in quarterly installments of $375,000 beginning after delivery, each tranche has a repayment profile of 15.33 years. The covenants and other conditions mirror those contained in the Company’s existing credit facilities.
Evensen Strikes – TK Agrees to Acquire Three FPSOs from Sevan and Invest in Recapitalization
Teekay Corporation was identified last week as the unnamed industrial partner involved in the on-going restructuring process taking place at Sevan Marine ASA. With details to be forthcoming, the companies did, however, announce the basic framework of the transaction, which has been approved by the respective Boards of Directors, but requires the acceptance of other key stakeholders including the bondholders, existing shareholders and the charterers.
Briefly, Teekay will acquire from Sevan the three FPSO units, the Hummingbird, the Piranema and the Voyager along with their existing charters. The Voyager will be acquired upon completion of the current upgrade, which Teekay has agreed to finance. In addition, Teekay has agreed to take a significant ownership position in a recapitalized Sevan. Lastly, it has locked in future growth by entering into a cooperation agreement to acquire future FPSO projects developed by Sevan.
Yes, Netflix Exists But I’m Going to Buy a VCR
By Adam Baylor, MTI Network and Maren Engh
Let’s face it. There’s no turning back. Social Media is here to stay in all aspects of our lives.
After the Deepwater Horizon tragedy, social media became inextricably linked to crisis communications.
Photos of oiled wildlife were Tweeted. Smartphone videos of oil washing ashore were posted to YouTube. Anti-BP groups were created on Facebook. Within five days of the Macondo blowout, the remotely operated vehicle’s underwater footage was streaming live on the Internet as thousands of barrels of oil gushed into the ocean.
The Shipping Corporate Risk Trade-Off Hypothesis
By Andreas G. Merikas, Christos Sigalas and Wolfgang Drobetz
The decision making process in maritime financial management consists of three main pillars: investment, financing and operation. Each pillar defines its own sub-universe and constitutes its own market with its own rules. The investment pillar refers to the market for newly built and secondhand vessels, the financing pillar is associated with the markets for debt and equity capital, and the operation pillar is related primarily to the freight market. Nevertheless, all three pillars and their underlying markets have one common denominator, namely “volatility”, which affects – in various ways and through various channels – the level and the variation of the outcome of any shipping corporate decision. Specifically, given that vessel prices can move radically in either direction, the decision of when to invest in a newly built or a secondhand vessel exposes shipping companies to substantial investment risk. Management’s choice to operate a vessel in the spot charter market rather than in the period charter market introduces market risk due to the variation of freight rates as a result of shipping market demand and supply shifts. And, finally, the choice between debt and equity financing determines a shipping company’s financial risk, as increased financial leverage reduces the probability that the cash flow generated from operating a vessel will be sufficient to meet the contractual capital repayments and the associated interest expense.
Investor Relations: Maximizing the Potential of the US Marketplace
By Nicolas Bornozis, President of Capital Link
The US remains the capital markets hub for shipping stocks. It has the largest number of listed shipping companies, an extensive investor base which includes both institutional and individual investors, a large number of analysts and brokerage firms / investment banks actively following the sector and an expanding number of journalists, reporters and bloggers who cover shipping. At the same time, because of its size, diversity and complexity, the US market place is the most demanding and daunting from an IR perspective.
A successful IR program must meet the informational needs and standards of all constituencies –shareholders, prospective investors, analysts, bankers, media- going well beyond the pure fulfillment of regulatory requirements. The basic functions of an IR program are to provide to the market a consistent, clear and meaningful information flow on the company’s development and strategy and then to gather, analyze and evaluate market feedback.
Investor Relations – Objectives, Form, and Substance
By Richard Lemanski
If you asked a dozen CEOs of publicly traded shipping companies the question “what is the objective of investor relations?”, you would probably get close to a dozen different answers which would include:
• To increase the share price of the company
• To ensure a valuation for the company at better multiples than its peer group
• To draft and issue press releases
• To draft presentations
• To field questions from investors and analysts (particularly those pesky ones the CEO does not want to answer!)
• To update the web site
• To find new investors for the company
• To ensure the company trades above NAV
• To increase analyst coverage
• To reduce share price volatility
Opportunities for Shipping in the Greek Public Markets / Dual Listing
Source: Athens Stock Exchange
At a time when most commentators have nothing much positive to say about the Greek economy and its prospects, the Athens Exchange (“ATHEX”) is endeavouring to attract the Greek shipping community to list locally and raise much needed capital for expansion.
In many respects it is natural for Athens Exchange to be a truly 21st century exchange. Its vision is to provide an efficient, transparent and accessible exchange market with uncomplicated admission procedures. The Athens Exchange is constantly innovating, having “state of the art” technology to bring shipping companies and investors (local and international) on a faster more efficient trading platform, while ensuring fair securities pricing mechanisms.
Automated Valuation Models: an Appraisal
By Chris Rivlin
In May 2011, VesselsValue.com launched an online subscription service which provides an instant valuation of Tankers over 29,500 dwt and Bulkers over 20,000 dwt. At its heart is an Automated Valuation Model (AVM). AVMs have been around for some time. They have been used to value domestic property for over twenty years. Similarly, there are many websites that will give you the value of your second hand car. More recently, some aircraft valuations have become automated. But this is a new development in shipping. So what exactly is an AVM? How does it compete with traditional methods for valuing ships? What can be learnt from AVMs in other fields?
Knowing how much a ship is worth is a vital part of maritime economics. It’s necessary not just for the sale and purchase of vessels, but for many other reasons, including accounting, loan security, investment reports and insurance. Valuations, sometimes called appraisals, are usually carried out by shipbrokers. Typically they are desktop valuations, meaning no physical inspection of the vessel is carried out and the value is based on recorded details of the ship. Brokers normally assess the fair market value of a ship, i.e. the amount it would sell for. This can be defined more elaborately as the best estimate of the price that would obtain at that time in an arm’s length transaction between a willing buyer and willing seller for a vessel in sound condition and free of charter.
The Landscape of Ship Finance in Korea
By Meeyoung Choi, Managing Director, Meriel Partners
Korea Ship Finance Exposure
Shipowners throughout the world are cognizant of Korea’s position in shipbuilding but may be unfamiliar with the capital dynamics of the maritime sector within the nation. This article serves as a brief primer on the universe of ship finance in the peninsula. We can segregate the players in Korea principally into five classes: Commercial Banks and Leasing Companies, Institutional Investors, Export Credit Agencies, Builder’s Credit, and the Local Capital Market. Each one has its own characteristics and focus: Commercial Banks & Leasing Co. and Institutional Investors (as classified in this article) offer capital for all tranches of vessel finance; Export Credit Agencies follow a solely international purview per OECD guidelines; and the Local Capital Market serves local shipowners.
The Official Guide To Marine Finance Providers
Shipping Index
