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Ningbo Marine Closes First Convertibles in 2011
On Wednesday, Shanghai listed Ningbo Marine successfully sold five year RMB 720 million (USD 109 million) convertible bonds with mandated bookrunner China Merchant Securities and lead manager Guangzhou Securities. The subsidiary of state-owned Ningbo Marine Group – one of the largest domestic shipping companies in China will be making use of the proceeds to finance one 57,000 dwt bulker and three Handymax bulkers. The basic terms of the offering are shown in the accompanying Guts of the Deal.
In a rather unusual fashion, the bonds offer investors different coupon rates every year. In the first year, the coupon rate is fixed at 0.7%, and this will increase to a maximum of 1.6% in the final year. The bonds are convertible into ordinary shares at an initial conversion price of RMB 4.58 (USD 0.69), which is the higher between the average price of Ningbo Marine shares over the last 20 days and on January 4, the day before the prospectus was filed. The conversion price of the bonds will be adjusted if there are any changes in the share capital due to any issues of new, bonus and/or right shares. Continue Reading
USD 495 million Debt Raised?
The remarkable turnaround in the container shipping sector in 2010 has led to a significant improvement in the banks’ appetite for containerships. Just as Neptune Orient Lines announced the firm financing offers it received for its new boxships, Evergreen Marine had no problem raising debt for its ships either.
The Taiwanese operator raised USD 330 million bank debt from a syndicate of domestic banks that was led by mandated lead arrangers Chang Hwa Commercial Bank, First Commercial Bank, Land Bank of Taiwan and Mega International Commercial Bank. The seven year shipping loan was priced extremely favourably at 85 bps over three-month LIBOR and was made up of four USD 82 million tranches, which we believe will be used to pay for four 8,000 TEU boxships. Three other Taiwanese banks – Chinatrust Commercial Bank, Hua Nan Commercial Bank and Cathay United Bank were also roped in as participating lenders. Continue Reading
ECAs Continue to Take the Centre Stage
In a market where the availability of commercial debt remains rationed, Export Credit Agencies (“ECAs”) supported financings continue to be an important funding source in many major shipping transactions.
Last month, the Japan Bank for International Cooperation (“JBIC”) concluded two loans agreements with K Line Offshore for the financing of one anchor handling tug supply (“AHTS”) vessel and one large platform supply vessel (“PSV”). Established in October 2007 to expand the group’s upstream energy resource development-related business, K Line Offshore is 95% owned by Japanese mega carrier Kawasaki Kisen Kaisha. Continue Reading
Japanese Regional Banks: Potential Sources of Liquidity?
In Japan, the three mega banks – Mizuho Financial Group, Sumitomo Mitsui Banking Corporation and Mitsubishi UFJ may be the market leaders in the country, but there is some anecdotal evidence that regional Japanese banks are now showing greater interest in ship finance. Regional banks particularly in the Shikoku and Setouchi areas remain as an important source of funding for the domestic shipowners and many of them have established dedicated ship finance departments to deliver better service to their shipping clients in recent years.
According to a series of articles published by Marine Net, although some of these traditional lenders have reportedly reached their lending limits allocated to the shipping industry, they are now exploring the possibility of working together with other regional banks that are unfamiliar to the industry on syndicated transactions, to
circumvent the problem of the lack of liquidity. Others are taking the opportunity to increase their exposure to ship finance. Continue Reading
Shareholder Loans Capitalised for Stronger Balance Sheet
In Singapore, it is not common to see a listed company acquiring assets larger than its market capitalization. However with the blessings from the Singapore Exchange, Jasper Investments (“Jasper”) announced last Tuesday that it has ordered a brand new USD 180 million jack-up rig from Keppel FELS Limited with an option for another one. The total value of the contract, including the option if exercised, will be approximately USD 365 million. This is in stark contrast to its market capitalisation of just USD 85 million when the announcement was made.
Formerly named Econ International, the company was once the second largest construction firm in Singapore before it plunged into bankruptcy with debt of over USD 250 million. In 2006, Morton Bay (Holdings) Pte Ltd, a company controlled by funds managed by London Stock Exchange listed fund specialist Ashmore Investment Management acquired a 47.5% stake in Econ International Ltd for USD 15 million via a reverse takeover and the company was subsequently renamed Jasper Investments in the same year, after the gemstone that possesses qualities of durability and toughness. Continue Reading
Strong Interest for NOL’s Ships
Last Thursday, Neptune Orient Lines (“NOL”) announced that it has received “firm financing offers” from lenders and financial institutions, which have agreed to provide the company a total sum of USD 926 million to partly finance its 12 new containerships. In a statement to the Singapore Exchange, NOL said that the loans will make up about 78% of the cost of the vessels, and the balance amount will be
funded by the company’s earlier bond issue and from internal resources.
In July and August, NOL penned an order for ten 8,400 TEU and two 10,700 TEU container vessels with Daewoo Shipbuilding & Marine Engineering at USD 1.2 billion. The ships, upon delivery between 2012 and 2014, will replace the company’s existing vessels with charter agreements that will expire in the next few years. And in preparation for this massive acquisition, NOL as early in August issued SGD 280 million worth of notes under its USD 1.5 billion Euro Medium Term Note Programme(“MTN”). The 10 year notes, arranged by DBS bank carry a coupon of 4.65% and the net proceeds of the notes were swapped from Singapore dollars into US dollars. Continue Reading
Vietnamese Banks Finance USD 227 million FPSO
During the end of July, a syndicate of six Vietnamese banks, led by PetroVietnam Finance Corporation and Vietnam Commercial Bank for Industry and Trade (“VietinBank”), provided PV KEEZ USD 227 million for the financing of an FPSO for the Chim Sao field in offshore Vietnam. This six year project financing transaction also saw the participation of Cathay United Bank, Indovina Bank, Shinhanvian Bank and SeA Bank.
The deal is particularly significant because it is the first syndicated US dollar facility provided by Vietnamese banks to an overseas company. PV KEEZ is a Singapore-based special purpose joint venture owned by PetroVietnam Transportation Corporation, EOC Limited, Ezra Holdings and KSI Production. Continue Reading
DVB Group Merchant Bank (Asia) Finances Brazilian Shipbuilder
In September, a syndicate of international banks led by DVB Group Merchant Bank (Asia) provided a USD 420 million export credit supported loan facility to OSX 1 Leasing B.V., a subsidiary of start-up Brazilian shipbuilder OSX Brasil S.A. The loan facility had a tenure of 8.5 years, priced at a rate of LIBOR + 4.25% p.a. and will be used to finance the acquisition and conversion of OSX’s first floating production storage and offloading unit (FPSO) referred to as the “OSX 1 FPSO” currently under conversion at Keppel Shipyard, Singapore. The unit will be operated by OGX Petróleo e Gás LTDA, a subsidiary of OGX Petróleo e Gás Participaçoes S.A. in the Waimea prospect in BM-C-41 in the Santos Basin offshore Brazil.
Norton Rose (Asia) LLP advised the lenders. Allen & Overy advised OSX and Cameron McKenna acted for OGX.
Credit Agricole Asia Participates in “Lets Together Shipping Fund”
Credit Agricole Asia Ship finance Limited, the agent for Credit Agricole Corporate and Investment Bank, as senior lender, and The Korea Development Bank, as junior lender, have provided USD 78 million pre and post delivery financing to two Panamanian single purpose companies established under the Korean “Lets Together Shipping Fund” structure for the acquisition of two 115,000 DWT bulk carriers.
The ships are being constructed at New Times Shipbuilding Co. Ltd. in the People’s Republic of China and, upon delivery, will be bareboat chartered to Hanjin Shipping Co., Ltd. One ship will be subsequently chartered under a consecutive voyage charter to Korea South-East Power Co., Ltd and the other ship will be subsequently chartered under a consecutive voyage charter to Korea Western Power Co., Ltd. Continue Reading
CLSA Capital Partners Makes Debut Investment
CLSA Capital Partners’ private equity fund has invested USD 100 million for a majority equity stake in OSL Holdings Limited (“OSL”), a handysize dry bulk ship-owner/operator.
The Hong Kong based OSL has been providing dry bulk shipping services to a broad range of clients since its inception over a decade ago and has grown rapidly in developing a loyal customer base ranging from trading houses, timber companies and engineering firms. The equity injected will be used to expand OSL’s fleet to better serve its existing customers and to help expand its trading routes with a strong emphasis on regional growth. Continue Reading
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