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Meeting an Immediate Need, While Looking to the Future- Scorpio Borrows and Files Shelf
In order to partially finance the recently acquired two LR1 Product tankers of 51,000 DWT built in Korea which deliver this month, Scorpio Tankers Inc. yesterday announced that they had arranged a new credit facility with Nordea Bank, DnB NOR and ABN AMRO to finance 50% of the $70 million purchase price of the vessels. The new facility provides availability of up to $150 million for a year.
Buying Shares – Seadrill and Golar LNG Buyback Shares
The Fredriksen companies have been busy buying shares lately as a result of certain triggering events. In the case of Seadrill, the parity value of the five year convertible bond issue due in 2012 exceeded 130% of par value for at least 20 days out of a period of 30 consecutive trading days allowing Seadrill to redeem the bond at par plus accrued interest. This, in turn, will likely result in the bondholders exercising their conversion rights. Of the original $1 billion, there is $749.5 million in bonds outstanding. Should all the bondholders convert all the remaining bonds at the $27.80 conversion price (Wednesday’s closing price was $33.59, making the exercise a no brainer), Seadrill will have to issue approximately 27 million new shares. In order to reduce the total outstanding number of shares, Seadrill began to repurchase shares and has since acquired 1.65 million shares at an average price of NOK 184.11 bringing its holdings of treasury shares to approximately 1.8 million.
Familiarity Creates Opportunity – Northern Shipping Funds Acquires Singapore Offshore AS
Back in March, Northern Shipping Funds (“Northern”) successfully acquired 99%of the DIS (“Silent Partner”) interests in Singapore Offshore AS, a Norwegian AS established in 2006 in order to provide post-delivery financing amounting to $126.725 million, through a sale-leaseback structure, for five AHTS units for Ezra Holdings of Singapore.
Better than Equity? – SeaCube Raises $50 Million from Unexpected Source
Last week, SeaCube Container Leasing Ltd. announced the successful closing of a $50 million unsecured term loan with Wells Fargo, as administrative agent, and Apollo Investment Corporation, as sole lead arranger. The loan matures on April 28, 2016 and bears interest at 11%. Proceeds will be used to purchase containers and for other general corporate purposes. The loan will be guaranteed by all of its subsidiaries, including Container Leasing International LLC, the main operating company.
Brad Berman Joins Holland & Knight
Brad Berman , one of the team most responsible for solidifying the Liberian Ship Registry back in 1999 when the registry successfully transitioned from its original management at a time of civil strife in Liberia, has made the move back to private law practice, where he started his estimable admiralty career. The move, which is completely amicable, brings back to the practice of maritime law one of its most enthusiastic and well networked practitioners. Brad leaves a Liberian organization that has grown in numbers of vessels, staff and services provided the international community in great shape. At Holland & Knight, Brad joins the structured finance and maritime practice team with such notable attorneys as Nancy Hengen, Jovi Tenev, Len Rambusch, John Pritchard and Jim Hohenstein.
Appetizing Target – SD Standard Drilling Goes from Almost One Rig to Seven
What do you do to keep busy if you are a one rig company and that rig is under construction? If you have aggressive financial sponsors, including Ferncliff AS, you naturally look to expand and that’s exactly what S.D. Standard Drilling Plc did. In this instance, Ferncliff, the company’s main shareholder, found a ready partner in Clearwater Capital Partners (“CCP”), an investment firm that has $2 billion in assets under management, mainly focused in special situations and distressed or otherwise undervalued assets and securities located in Asia excluding Japan.
Pacific Drilling Success
Two weeks ago, Pacific Drilling announced the successful completion of the private placement of its shares. Due to demand, the offering was upsized by 10 million shares and priced at $10/share slightly above the midpoint of the indicated range. Gross proceeds were $600 million based upon the 60 million new shares. Procceds were used to partially finance the construction of the two drillships from Samsung which are expected to be delivered in Q2 and Q3 2013. Following the offering the company has 210 million shares outstanding, which trade over-the-counter in Oslo. The details of the final offering are shown below.
Like the Energizer Bunny, Sevan Drilling’s IPO Keeps Going and Eventually Succeeds
In early April, Sevan Drilling ASA, a wholly owned subsidiary of Sevan Marine ASA (“Selling Shareholder”), announced a global offering of its shares of up to NOK 3,270 million (~$595) by way of a combined secondary offering of existing shares by the Selling Shareholder and a primary issuance of new shares. The offering would consist of an institutional offering, a retail offering to Norwegian investors and an employee offering. The share price is to be established through a book building process for the institutional offering. Based upon an expected price range of NOK 16-21 per share, the company expected a primary issue of up to 120 million new shares (~$350) and 64 million secondary shares (up to ~$245 million).
Bank Loan in Drag – NewLead Heads to Norway
As any good salesman will tell you it’s all in the packaging, particularly when you are entering new markets. Back in December, NewLead Holdings Ltd filed a form F-1 to sell in a follow-on offering $115 million of common stock here in New York. Unfortunately, the timing was off and the offer was shelved until the window re-opens. The company, however, was not dissuaded and, together with DnB NOR and S Goldman Advisors, jumped on a flight to the second largest source of capital for shipping, Oslo, with a transaction that marries the “best” of secured lending with the terms of a high yield bond. The challenge for the company and its advisors was to overcome the fact that the company is a small cap Greek company, which is not involved in oil and gas. There is no better team to speak “Norwegian” and sell the deal. DnB NOR is a key lender and major capital markets player in Oslo and knows both markets intimately. Sheldon Goldman also has broad capital markets exposure here, but perhaps more importantly, he understands the Greeks through his role as financial “consigliere” to Angeliki Frangou.
Success But at a Price – Box Ships’ IPO
Following quickly on the heels of the Golar LNG Partners LP offering, Box Ships Inc., a wholly owned subsidiary of Paragon Shipping Inc. became the second IPO of the year. Approximately three weeks ago, the company filed a registration statement to sell 10 million shares of the common stock of the company, leaving Paragon with a 22.7% stake. The sale would include a green shoe of a further 1.5 million shares. Pricing was expected to be between $15 and $17 per share and assuming midpoint pricing, gross proceeds would be $160 million. The net proceeds of the offering would be used to partially fund the acquisition of an initial fleet of six containerships, including three being acquired from Paragon, with an aggregate capacity of 28,177 TEU.
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