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Likewise, Prosafe Taps Bank Market
Today, Prosafe AS announced that it had entered into a new credit facility of $1.1 billion, consisting of a revolver of $620 million and a term loan of $480 million. The tenor of the facility is 6 years with semi-annual payments of $70 million to a balloon of $260 million. Pricing is very competitive at LIBOR + 1.875%. Proceeds will be used for fleet expansion and the current upgrading of the Safe Caledonia and Safe Astoria.
Oh to Be in the Offshore – Songa Offshore Gets Financing
This week Songa Offshore announced that it finalized a new $420 million credit facility, which will be used to finance the delivery of the ultra-deepwater semi-submersible, Songa Eclipse, which is ready for delivery from Jurong. While few loan terms are available, the company did disclose that the repayment profile is 8.5 years.
Odfjell and Lindsay Goldberg Close Tank Terminal Deal
Back in May, Odfjell SE and Lindsay Goldberg LLC announced their intentions to enter into strategic partnership to grow the former’s tank terminal business in Europe and North America.
Through this transaction, Lindsay Goldberg will acquire a 49% interest in each of Odfjell’s tank terminals in Rotterdam, Netherlands and Houston, Texas as well as in the greenfield project in Charleston, South Carolina. Odfjell will retain the remaining 51% ownership stake with current management remaining in place. The total transaction includes storage capacity of refined oil products and chemicals in the amount of about 2 million cbm and a total of 465 employees.
A Look Back – Some Further Insights on the GE SeaCo Acquisition
When the purchase of GE SeaCo by the HNA Group was announced, details of the transaction were few and difficult to come by. We scoured our contacts and were able to glean some color. We reprise the salient points below with the new details interspersed.
As the fifth largest player in the global marine container leasing industry, GE SeaCo owns and manages over 870,000 20-foot equivalent units, the industry’s standard measure of fleet size. The company was put into play last year as part of GE’s plan to shed financial assets and emphasize its industrial businesses. From its original beginning as Genstar, the container leasing business has never been a great success for GE Capital.
Are the BIG ships a Game Changer? The Liners “Post – Manifesto”
By Robert Kunkel
In February of this year, Maersk Line signed a $1.9 billion dollar order for ten 18,000 TEU container ships. Larger than the current 15,550 Emma Maersk class, the new Triple E’s are destined to trade Asia to Europe in a market Maersk claims has a 14% annual growth potential. The ships bring a new standard of energy efficiency to the lane and reportedly change the container game – again. The initial order of ten ships at South Korea’s Daewoo Shipbuilding was backed by options for twenty additional vessels. Maersk claimed they were confident the Triple E’s were the future of box shipping and supported that statement with a decision to spend nearly $5.5 billion dollars. Yet in June, after the release of the controversial “Maersk Manifesto”, they decided to convert only one option and limit the total fleet to twenty. What is more important to note is that no other carrier has announced follow on orders of the same ship size and, in fact, many new building contracts in the larger Post-Panamax sizes are being cancelled.
Sign of the Times
The latest edition of Jefferies Market Update points out that “U.S. hay, the country’s third-largest crop by value, is now cheaper to ship to China from southern California than to central California as ocean freight costs about $30 per short ton while the same cost for trucks is $53 per short ton. It ain’t just hay.
Survival – It’s All about Liquidity and Gearing
Continuing our recent trend of playing with numbers, we have decided this week to focus on survivability, which, for our purposes, we measure in terms of liquidity and leverage. For a selected group of companies which have reported 1st half results, we have calculated the debt to equity and net debt to equity ratios. We also show the cash position of these companies, which compared to just a couple of years ago is substantially lower, a reflection of this difficult market. While we show both the debt to equity and net debt to equity ratios, the latter in deference to the analysts, we prefer the former as we believe the cash will be long gone before it can be applied to the debt.
The Markets Knock the Wind Out of the Sails – DHT’s Acquisition of Saga a Clear Victim
On August 5th, DHT Holdings Inc. announced the withdrawal of its offer to acquire Saga Tankers ASA. With the consideration based upon an exchange of 0.25 shares of DHT for each share of Saga, the latter’s interest certainly waned as shipping shares declined at an even faster rate than the market in general. In fact, despite a number of extensions of the offering period, DHT had only received acceptances from approximately 84% of the shareholders below the 95% acceptance threshold.
The deal was certainly less attractive from DHT’s perspective as well. As Cantor Fitzgerald’s Natasha Boyden writes as a proxy: “As such, while this delays the company’s expansion plans, we suggest the deterioration in the tanker market since the deal was announced, combined with Saga Tankers’ high spot exposure, made us more lukewarm on the acquisition.”
DVB Results for First Half Up
DVB Bank remained on course during the first half of 2011, boosting its consolidated net income before taxes to €74.9 million, up 26.9% (H1 2010: €59.0 million).
Wolfgang F. Driese, CEO and Chairman of the Board of Managing Directors, commented on DVB’s consolidated results for the first half of 2011: “We maintained the momentum seen during the record year 2010 during the first six months of 2011. New business has developed very favorably indeed, in terms of volumes, margins, and particularly regarding commission income. We anticipate a similar trend for the second half of the year, even though we are faced with manifold political and economic uncertainties around the world. As we expected, charter rates have come under pressure due to excess capacity pushing into the markets – particularly for tankers, bulk freighters and container carriers. Furthermore, the coming months will require our full attention and expertise. We are certainly prepared.”
Returns and More – A graphic look at Second Quarter Results Look the “Other” way!
Second quarter earnings reports are now coming in and this week we are again taking a graphic look at how the industry is doing.
Twenty-six companies have reported so far and despite some really tough economic times nineteen showed increased revenues for 2Q2011 versus 1Q2011, with Kirby, Eagle Bulk and Alexander & Baldwin leading the way. Happily all of them showed positive EBITDAs.
The Official Guide To Marine Finance Providers
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