CIBC Shuts Down Energy Desk, Allen Brooks Goes Solo

Freshly Minted understands that CIBC shut down its U.S. energy research on January 21, and shipping analyst Allen Brooks has left to start his own advisory business, G. Allen Brooks, L.L.C.,  in Houston. If you would like to reach Allen, give give us a call or send us an email, and we will give you his new contact details.

Freshly Minted understands that CIBC shut down its U.S. energy research on January 21, and shipping analyst Allen Brooks has left to start his own advisory business, G. Allen Brooks, L.L.C.,  in Houston. If you would like to reach Allen, give give us a call or send us an email, and we will give you his new contact details.

Jefferies Buys M&A Firm, Beefs up Shipping Team,

Moves to New York

It’s busy times for the team at Jefferies & Company, the oil patch investment bank that now has a dominant role in the global shipping business. The firm announced this week that it has acquired energy M&A specialist Randall & Dewey. The move will beef up Jefferies’ energy M&A practice by adding 100 professionals in London, Calgary and Houston. Jefferies has decided to keep the Randall & Dewey brand in place by putting its professionals into the newly acquired firm and then running it as an operated subsidiary of Jefferies.

The news, while interesting, won’t have any impact on the company’s shipping practice. Last year, Jefferies split its energy practice into two groups: Maritime and Oil Services (run by John Sinders) and E+P and Pipelines, into which the new acquisition will fit. That said, there is quite a lot of activity in the maritime and oil services group as well. Maritime recently hired former Greek Norton Rose lawyer Stefanie Kasselakis as a Vice President and Nick Stillman as an analyst. The investment bank has also begun a search to hire at least one more maritime equity analyst to cover the swelling universe of publicly traded tanker, dry cargo and container ship companies. John Sinders has also opened an office in New York in addition to the one in Houston.

It’s busy times for the team at Jefferies & Company, the oil patch investment bank that now has a dominant role in the global shipping business. The firm announced this week that it has acquired energy M&A specialist Randall & Dewey. The move will beef up Jefferies’ energy M&A practice by adding 100 professionals in London, Calgary and Houston. Jefferies has decided to keep the Randall & Dewey brand in place by putting its professionals into the newly acquired firm and then running it as an operated subsidiary of Jefferies.

The news, while interesting, won’t have any impact on the company’s shipping practice. Last year, Jefferies split its energy practice into two groups: Maritime and Oil Services (run by John Sinders) and E+P and Pipelines, into which the new acquisition will fit. That said, there is quite a lot of activity in the maritime and oil services group as well. Maritime recently hired former Greek Norton Rose lawyer Stefanie Kasselakis as a Vice President and Nick Stillman as an analyst. The investment bank has also begun a search to hire at least one more maritime equity analyst to cover the swelling universe of publicly traded tanker, dry cargo and container ship companies. John Sinders has also opened an office in New York in addition to the one in Houston.

Stelios Holds Celebration Party

The Maritime Hotel on 17th Street and 9th Avenue was the venue for Stelios’ victory celebration last night in Manhattan. Stelios invited all former Stelmar shareholders and well-wishers to the event. According to the invitation, “With $170 million dollars of additional shareholder value created for all shareholders in 27 days, there will be plenty of smiles in the room!” We believe there were.

The Maritime Hotel on 17th Street and 9th Avenue was the venue for Stelios’ victory celebration last night in Manhattan. Stelios invited all former Stelmar shareholders and well-wishers to the event. According to the invitation, “With $170 million dollars of additional shareholder value created for all shareholders in 27 days, there will be plenty of smiles in the room!” We believe there were.

Healy & Baillie Makes Key Hire to Expand Capital

Markets Practice

George Economou isn’t the only Greek that came to the U.S. capital markets this week. Leading New York maritime law firm Healy & Baillie announced on Monday that the firm has added public securities law to its practice areas with the arrival of Antonios (Tony) C. Backos as partner. Formerly with the London and New York offices of Weil, Gotshal & Manges, LLP, Mr. Backos “brings to the firm a wealth of experience in public securities law, mergers & acquisitions, private equity, and general corporate work,” stated John Kimball, Chairman of Healy & Baillie.

In our view, the timing could not be better for Healy, and this was a very intelligent move. With more than a dozen shipping deals en route to the capital markets, the law firm will now be able to leverage its existing client relationships by serving as issuer’s counsel on public and private debt and equity deals. The move is an important addition to the work in the market that Seward & Kissel has been doing for many years by giving issuers an option as well as a place to turn when conflicts arise based on previous or current relationships. The fact that Tony is fluent in Greek (and will likely be able to find his way around the Posidonia parties) will also be a great asset to Greek clients interested in exploring or executing a capital markets transaction.

George Economou isn’t the only Greek that came to the U.S. capital markets this week. Leading New York maritime law firm Healy & Baillie announced on Monday that the firm has added public securities law to its practice areas with the arrival of Antonios (Tony) C. Backos as partner. Formerly with the London and New York offices of Weil, Gotshal & Manges, LLP, Mr. Backos “brings to the firm a wealth of experience in public securities law, mergers & acquisitions, private equity, and general corporate work,” stated John Kimball, Chairman of Healy & Baillie.

In our view, the timing could not be better for Healy, and this was a very intelligent move. With more than a dozen shipping deals en route to the capital markets, the law firm will now be able to leverage its existing client relationships by serving as issuer’s counsel on public and private debt and equity deals. The move is an important addition to the work in the market that Seward & Kissel has been doing for many years by giving issuers an option as well as a place to turn when conflicts arise based on previous or current relationships. The fact that Tony is fluent in Greek (and will likely be able to find his way around the Posidonia parties) will also be a great asset to Greek clients interested in exploring or executing a capital markets transaction.

Although Tony has not previously been active in the bulk shipping market, while at Weil Gotshal he was involved with the acquisition by Chiles Offshore Inc. (formerly listed on AMEX) of an oil drilling rig, the merger of GIA2, Inc. with and into Chiles Offshore in 2001, and the Chiles Offshore IPO on the Amex in 2000. He also advised on SEC filings for SEACOR Smit Inc.

Riaz Khan – Live from Hong Kong Shipowners

Association Luncheon

The bulk market looks good, the post panamax container market looks scary and mergers & acquisitions will be the key driver for fleet growth in 2005, according to our friend Riaz Khan, research guru and DVB Bank credit committee member. Riaz was speaking before the monthly luncheon of the Hong Kong Shipowners Association last week in remarks entitled: “Driving Forces of the Shipping Markets.” Other items of interest to owners include the fact that DVB is still bullish on financing bulkers and that it is one of the few banks willing to provide leverage on single skin tankers. Although the tanker fleet is young, DVB remains positive on Asian growth-led energy demand. All in all, DVB Bank, which has about 1000 vessels in its book, is still lending full steam ahead.

The bulk market looks good, the post panamax container market looks scary and mergers & acquisitions will be the key driver for fleet growth in 2005, according to our friend Riaz Khan, research guru and DVB Bank credit committee member. Riaz was speaking before the monthly luncheon of the Hong Kong Shipowners Association last week in remarks entitled: “Driving Forces of the Shipping Markets.” Other items of interest to owners include the fact that DVB is still bullish on financing bulkers and that it is one of the few banks willing to provide leverage on single skin tankers. Although the tanker fleet is young, DVB remains positive on Asian growth-led energy demand. All in all, DVB Bank, which has about 1000 vessels in its book, is still lending full steam ahead.

Citigroup Takes Eletson into Market for Half Billion

Refinancing

Eletson is in the market with a massive $500 million deal to refinance the entirety of its existing debt. Citigroup is serving as sole Bookrunner while Citigroup and HSH Nordbank are joint MLAs. Eletson operates a Greek-flagged fleet of 11 handymax, ten panamax and post-panamax, and four aframax double hull tankers with an average age of 9.5 years and a total capacity of 1.6 mdwt.

Eletson is in the market with a massive $500 million deal to refinance the entirety of its existing debt. Citigroup is serving as sole Bookrunner while Citigroup and HSH Nordbank are joint MLAs. Eletson operates a Greek-flagged fleet of 11 handymax, ten panamax and post-panamax, and four aframax double hull tankers with an average age of 9.5 years and a total capacity of 1.6 mdwt.

König / OMI Relationship Expands

König, who we think is one of the most innovative KG arrangers in Germany, has expanded its relationship with OMI this week. OMI announced on Monday that they have agreed to timecharter for a seven-year period two new suezmax vessels scheduled for delivery in June and September of 2005. As readers know, König has previously entered two other suezmaxes into OMI’s “Gemini Pool.” All four new suezmaxes will also enter the Gemini Pool when delivered. This will bring the number of vessels in the pool to 21. OMI has options to extend the term of the time charters and to acquire the vessels it is chartering.

König, who we think is one of the most innovative KG arrangers in Germany, has expanded its relationship with OMI this week. OMI announced on Monday that they have agreed to timecharter for a seven-year period two new suezmax vessels scheduled for delivery in June and September of 2005. As readers know, König has previously entered two other suezmaxes into OMI’s “Gemini Pool.” All four new suezmaxes will also enter the Gemini Pool when delivered. This will bring the number of vessels in the pool to 21. OMI has options to extend the term of the time charters and to acquire the vessels it is chartering.

KG Market for Shipping Celebrates Another

Record Year

The first set of results on the performance of the German KG market in 2004 has been published. According to these results, shipping KG deals totaled 2.48 billion euro in 2004, up from 2.3 billion euro in 2003. The growth can be viewed as greater than the numbers demonstrate if the strong performance of the euro against the U.S. dollar over the past year is taken into account. The shipping fund portion accounted for nearly 24% of the entire German KG market this year, putting shipping second only to the real estate sector. As the pie graph shows, 50% of the equity subscribed through KG shipping funds in 2004 went to containerships, while tankers accounted for 27% and bulkers and multi-purpose vessels together accounted for 20%.

The first set of results on the performance of the German KG market in 2004 has been published. According to these results, shipping KG deals totaled 2.48 billion euro in 2004, up from 2.3 billion euro in 2003. The growth can be viewed as greater than the numbers demonstrate if the strong performance of the euro against the U.S. dollar over the past year is taken into account. The shipping fund portion accounted for nearly 24% of the entire German KG market this year, putting shipping second only to the real estate sector. As the pie graph shows, 50% of the equity subscribed through KG shipping funds in 2004 went to containerships, while tankers accounted for 27% and bulkers and multi-purpose vessels together accounted for 20%.

Stolt Restructuring Results in Promotions at

Miller Buckfire

One of the most impressive restructurings of all time also appears to have resulted in some promotions. Miller Buckfire Ying & Co., restructuring advisors to Stolt Nielsen, announced last week that Mark Hootnick has been promoted to Managing Director and John Bosacco has been promoted to Principal – and all four of them were involved in the Stolt deal. “With these promotions we are pleased to recognize the accomplishments of these senior bankers,” said Henry Miller, Chairman of Miller Buckfire Ying. “Mark,… John… consistently have shown their commitment to the firm and its goal of delivering independent, thoughtful and creative advice to the firm’s restructuring and strategic advisory clients.”  Miller Buckfire Ying was formed in July 2002 when the financial restructuring group at Dresdner Kleinwort Wasserstein spun off as an independent entity. In addition to Stolt Nielsen and Group TMM, MBY is currently engaged by: Kmart Corporation, Level (3) Communications, Spiegel, Inc., Eddie Bauer, Inc, Horizon Natural Resources, Aurora Foods Inc., Citation Corporation, Interstate Bakeries, Pegasus Satellite Communications and Vulcan Inc. concerning its investment in Charter Communications.

One of the most impressive restructurings of all time also appears to have resulted in some promotions. Miller Buckfire Ying & Co., restructuring advisors to Stolt Nielsen, announced last week that Mark Hootnick has been promoted to Managing Director and John Bosacco has been promoted to Principal – and all four of them were involved in the Stolt deal. “With these promotions we are pleased to recognize the accomplishments of these senior bankers,” said Henry Miller, Chairman of Miller Buckfire Ying. “Mark,… John… consistently have shown their commitment to the firm and its goal of delivering independent, thoughtful and creative advice to the firm’s restructuring and strategic advisory clients.”  Miller Buckfire Ying was formed in July 2002 when the financial restructuring group at Dresdner Kleinwort Wasserstein spun off as an independent entity. In addition to Stolt Nielsen and Group TMM, MBY is currently engaged by: Kmart Corporation, Level (3) Communications, Spiegel, Inc., Eddie Bauer, Inc, Horizon Natural Resources, Aurora Foods Inc., Citation Corporation, Interstate Bakeries, Pegasus Satellite Communications and Vulcan Inc. concerning its investment in Charter Communications.

It’s remarkable what happens when momentum shifts. This week Stolt Nielsen released certain unaudited financial information regarding its anticipated results for the fourth quarter and full year ended November 30, 2004. SNSA expects to report income before tax provision and minority interest for the fourth quarter of $48 million to $54 million. For the full year, SNSA expects to report income before tax provision and minority interest of $83 million to $89 million, about $60 million of which comes in from the transportation group which includes the parcel tankers. The outlook for 2005 also looks good with contracts of affreightment being renewed at “significantly higher rates.”

Moreover, the tank container division (which Jefferies was mandated to sell but was subsequently taken off the market when Stolt realized it would not need the cash) saw further improvements in margins as the business is benefiting from a strong market.

Here are a few highlights of Stolt’s major presence on the Oslo Stock Exchange:

• SNSA is the 3rd largest non-Norwegian company (as measured by market cap) listed on the OSE after RCCL and Frontline, and just ahead of SOSA.

• SNSA had the best return of all of the companies in 2004 in the OBX (172%)

• SNSA was number 14 of all companies in terms of trading volume.