Precious Shipping Acquires 4x Supramaxes

Precious Shipping has signed an agreement with Oswal Shipping of Singapore to acquire newbuilding contracts for four 57,000 dwt supramax vessels worth USD 98 million in total. The Thai dry bulk operator purchased the contracts by acquiring the entire issued share capital of four wholly-owned single purpose companies, each holding a newbuilding contract for one bulkcarrier with Wuhan Guoyu Shipbuilding and Yangzhou Guoyu Shipbuilding. The vessels are scheduled for delivery between March and August 2012.

The acquisition will be funded either by new credit facilities, excess cash flow from operations and/or utilisation of existing secondhand vessel acquisition bank facilities if the facilities are available when the vessels are delivered. Watson, Farley & Williams LLP acted as the advisor to the company.

Regional Japanese Banks Pool Resources for Tsuneishi Shipbuilding

Meanwhile, there is increasing anecdotal evidence that Japanese banks are seriously banding together to finance the domestic maritime industry. Last December, a group of five regional Japanese banks led by Chugoku Bank and Hiroshima Bank granted Japanese shipbuilder Tsuneishi Holdings a syndicated credit facility of JPY 10 billion (USD 121 million). The three year credit line can be drawn at any time within the stipulated period and the shipbuilder will be making use of the funds for its operating needs. Ehime Bank, Momiji Bank and San-in Godo Bank were the other participating banks.

Chinese Banks, Greek Owners

In a press release from DVB Bank last week, CEO Wolfgang Driese has expressed great optimism on the future role of China, both in the global economy, and in global transport financing. Commenting on his recent trip to Beijing, he is convinced that Chinese banks will gain greater importance in the global syndication market, given that “a number of Western Hemisphere banks that were active before the crisis may well not return”. While we continue to harbour mixed feelings about the development of Chinese banks as emerging global ship financiers given recent concerns over their USD liquidity positions, they have clearly established themselves in the industry and this is evidenced by several new deals below.

At least two Greek shipping companies are said to have secured Chinese money in the past few weeks. Containership owner Danaos has secured approval for a USD 203.4 million Sinosure backed credit facility from Citi and China Exim Bank. The funds will be ultilised for the financing of three 8,530 teu boxships, currently under construction at Shanghai Jiangnan Changxing Heavy Industry.   Continue Reading

Ananda Goes on a Road Show

Ananda Shipyard and Slipways (“Ananda Shipyard”) is on its way to become the first shipbuilding company to go public in Asia this year. The Bangladesh based shipbuilder is currently on the roadshow to sell 30 million new shares and list on the Chittagong Stock Exchange. The offer price has yet to be finalised, but shares could be offered at BDT 65 (USD 0.91) a piece as indicated in its IPO prospectus. Even though the IPO size may be as large as the mega shipbuilding IPOs that we are used to in Asia, the offering is nonetheless interesting in its own ways. 

Ananda Shipyard was incorporated in 1999 as a subsidiary of the Ananda Group, a leading conglomerate in Bangladesh that is also involved in other business segments such as textile, polypropylene woven bag mills, land development, railway engineering and information technology. Today, the shipbuilding division employs over 1,362 workers and prides itself as the largest private shipbuilder in the country. Its clients include domestic companies such as Chittagong Port Authority, Mongla Port Authority, Bangladesh Inland Water Transport Authority, Bangladesh Water Development Board, Bangladesh Navy as well as European owners such as Stella Shipping, Johs, Gram-Hanssen A/S in Denmark and Komrowski Maritim, Navalis Shipping and Wesels Reederei in Germany.  Continue Reading

A Brilliant Coup for Singapore

Since its introduction in 2004 as a new business model, the business trust has not created the level of excitement initially envisaged by the authorities. The concept of business trusts was conceived after the success of real estate investment trusts and the idea was to provide investors an alternative option to derive an income yield based on the cash flows generated by assets, without any restrictions on the asset type. 

Companies that are expected to securitise their assets via the business trust structure are likely to be asset heavy in nature such as transport and utilities. But despite the efforts in promoting this structure to companies and investors, there has been limited success. Today, you can still count the number of Singapore listed business trusts with your two hands. The three shipping trusts – Pacific Shipping Trust, First Ship Lease and Rickmers Maritime and a couple of infrastructure trusts – CitySpring Infrastructure Trust, K-Green Trust and Macquarie International Infrastructure Fund are among the few business trusts listed on the Singapore Exchange. But all could change for the better if Hutchison Whampoa’s plans to spin off its Southern Chinese port assets go through.  Continue Reading

A Rude Wake-up Call

Market hearsays turned into wide-spread panic as news of Korea Line’s bankruptcy filing hit the industry on Tuesday. The South Korea’s second largest bulk carrying line filed for a court receivership after its failure to renegotiate a number of loss-making charter arrangements concluded prior to the financial crisis. Alarm bells were also ringing as far away in the United States where several public listed companies have their ships chartered to the beleaguered company.

Among them, probably the most exposed was New York listed Eagle Bulk Shipping. The company has 13 out of its 48 ships on time charter to Korea Line, lasting between six to ten years. In a statement to the stock exchange, the company described its exposure to Korea Line as modest because the vast majority of the charters were fixed at close to current market rates. “To date, none of our charters with Korea Line have been restructured,” it added. In his latest report, DnB NOR’s analyst Glenn Lodden expects many of these time-charter contracts will be renegotiated and the most expensive might be breached. However, he believes that it is unlikely that Korea Line will be liquidated because the company remains “an important part of South Korean infrastructure (iron ore, coal, LNG imports).”  Continue Reading

The new Singapore Ship Sale Form

For those looking to purchase or sell a ship, there is a new option available to rival the commonly used Norwegian Sale Form (NSF) and the Nippon Ship Sale Form. The NSF has been the ship sale contract of choice for ship owners, brokers and lawyers since its adoption by the Baltic and Maritime Council (BIMCO) in 1956. Since then it has been amended and updated four times, most recently in 1993. The NSF is currently the clear market standard for the vast majority of ship sale transactions.

As part of its continued drive to promote itself as both a shipping and an international dispute resolution centre, the Singapore Maritime Foundation launched the Singapore Ship Sale Form (SSF) on 6 January 2011. The SSF is the culmination of an initiative commissioned by the Singapore Maritime Foundation (SMF) in 2008 to research and draft a new ship sale form. Continue Reading

10 Questions with Marco Polo Marine CEO Sean Lee

Investors may be well familiar with the major rig builders and the Chinese shipyards listed on the Singapore Exchange, but a special group of integrated marine companies have not been hitting their radar screens in the same way. ASL Marine, Marco Polo Marine, Otto Marine, Penguin International and Swissco are among the few Singapore based small and mid-cap companies that have been expanding steadily over the past few years and many of them have diversified revenue streams from their shipbuilding/ship repairing and ship chartering operations in Southeast Asia. In this edition of Marine Money, we speak to Mr. Sean Lee, Chief Executive Officer of Marco Polo Marine.

Marco Polo Marine has its roots in shipping as early in 1991 when management saw the opportunity to ride on the increasing demand for commodity transportation services in Indonesia. In 2006, under the stewardship of Mr. Sean Lee, Marco Polo Marine found a niche in the transportation of coal. Driven by rapid economic development and population growth, energy demand in Indonesia has been rising rapidly and coal has become an increasingly important resource for the country. The exponential growth in coal production, from barely 2 million tons in 1985 to over 200 million tons today, has further spurred the demand for coal transportation services by tugs and barges. In 2007, the company saw its successful listing in Singapore where it raised SGD 15.0 million (USD 11.7 million) on the Singapore Exchange. Continue Reading

HSH Nordbank Shows Commitment in Asia

What do DnB NOR, Nordea and HSH Nordbank have in common? A similarity that easily comes to mind would be that all three banks are major ship financiers with a large presence in Singapore. But do you know that not only are their shipping team based in Singapore, they are headed by Singaporean bankers too. Nordea appointed Mr. Kwek Chih Keong as its Head of Shipping and Oil Services – Asia in June last year and Mr. Andrew Chiang, Regional Head Asia Shipping, Offshore & Logistics took over as DnB NOR’s Regional Head Asia Shipping, Offshore & Logistics in 2008. Last month, in a move that comes as an eyebrow-raising surprise to many in the industry, Mr. Lee Keng Mun joined HSH Nordbank as the new Head of Shipping Asia. Marine Money spoke to the veteran last Friday for some quips on his latest appointment.

Having spent seven years in DBS Bank as its Managing Director and Head of Shipping & Aviation, Institutional Banking Group, Mr. Lee has been widely credited for spearheading the growth in the bank’s transportation business. Prior to DBS Bank, he spent many years as a senior relationship manager at DnB NOR covering clients in the Asia Pacific region.  “I had a fantastic time at DBS especially during the initial years, when I had to roll up sleeves and work hard on building the bank’s transportation team and growing the franchise. And when the opportunity to do the same at HSH Nordbank came along, it is hard for me to refuse. Now that market sentiments have recovered significantly, it is about time for me to leave DBS on that positive note and take up the new challenge,” he said. Continue Reading

Corporate Snippets: There Is Money Out There for Ships!

Even though the ship financing environment is widely expected to be cautiously optimistic this year, recent headlines seem to suggest otherwise.

STX Pan Ocean: Last Friday, the Korean dry bulk shipper announced the company is in the process of establishing six special purpose vehicles for the purpose of financing its ships on order. The company will guarantee the debt owed by these SPVs, amounting to USD 358.6 million. The loan agreements will range between 8 to 12 years. Continue Reading