Dream Team in the Making

After 20+ years at Citi, Simon Booth has decamped and moves to Deutsche Bank effective September 1st, where he will serve as a Managing Director and Co-head of Deutsche Shipping, Deutsche Bank’s lending arm to the shipping sector.  Simon will be based in London and head up Deutsche Shipping alongside Ralf Bedranowsky, who is based in Hamburg where Deutsche Shipping is based.

This move further strengthens Deutsche Bank’s overall shipping sector coverage platform, which includes Craig Fuehrer in New York as the Head of Deutsche Bank’s Investment Banking platform offering capital markets and advisory product experience as well as Justin Yagerman’s equity research platform with approximately 15 shipping companies currently under coverage. For borrowers, Deutsche Shipping’s global presence makes it a one-stop place to shop for financing solutions in both the loan and capital markets. Through it careful focus on long-standing client relationships, consistent risk management and continuously diversified shipping portfolio, Deutsche has not only survived the credit crisis but continues to thrive in these illiquid markets.

Done!

Seanergy Maritime Holdings announced on Wednesday that it had concluded the previously agreed acquisition of a 51% interest in Maritime Capital Shipping (Holdings) Limited for a purchase price of $33 million which was paid from the proceeds of the recent equity offering and cash on hand. A projected adjusted EBITDA contribution from MCS of $23 million for the balance of 2010 and $40 million in 2011 implies a purchase price/EBITDA multiple of 1.6 times on an annualized basis. The remaining 49% has been retained by the seller, which is controlled by the Restis family, one of Seanergy’s major shareholders. As a result of the acquisition, the company’s fleet now consists of 20 dry bulk vessels, up from 11, including four Capesize, three Panamax, two Supramax, one Handymax and 10 Handysize bulk carriers with an average age of 12.7 years.

The acquisition, most importantly, enhances the overall stability and visibility of the company’s cash flows as well as provides a more balanced charter portfolio. On a combined fleet basis, Seanergy has secured under period employment 93% ownership days in 2010, 58% for 2011, 27% for 2012 and 19% for 2013.

New Regulatory Deepwater Horizons?

By Robert Kunkel, Amtech

On April 20, 2010 an explosion on Transocean’s Deepwater Horizon, an ultra-deepwater, offshore drilling rig, leased to British Petroleum in the Gulf of Mexico resulted in what is now reported to be the largest domestic oil spill since the 1989 Exxon Valdez. The cause of the blowout has not been determined. However, the dependence on a single piece of equipment – the BOP – as a last line of defense to stop the flow of oil is an issue industry experts have raised for over a decade. It is time to listen to those warnings. Multiple, redundant and independent layers of safety equipment are necessary to protect our oceans when drilling at these depths – and more than likely the industry will be forced to absorb the reality of either onsite relief well capability, if not actual dual wells.

Critics have asked how North Sea deepwater drilling differs from U.S. Gulf operations after reports of operating procedures used in the Gulf were found to be unacceptable in North Sea fields. More questions followed regarding the inconsistency of the regulations. Is the industry prepared to address safety and environmental issues at newly discovered fields in Brazil or projected drilling off Cuba? Will ultra deep drilling continue to generate these failures? Constructive answers to these questions require the industry to develop a common set of international regulations and enforce them regardless of location.
Continue Reading

Pride of the Inland Sea. Marine Money on Shikoku Island with 200 close friends!

Arriving on Shikoku Island on Japan’s inland sea today is to take a step into a different world. As Inatomi san of SMBC said at the start, ‘its been a center of trade for more than 1,000 years.’

It is a place where community works together for the general good, family matters and the beautiful mix of mountains, fertile coastal plains and productive industry along the coastline blend naturally.

The region is home to 800 big ships. 1000 by next year if all goes as planned! A yard like Imabari delivers 100 ships a year – all Rolls Royces!

Don’t get us wrong there are plenty of challenges facing one of the world’s great maritime clusters – yards face a fall off of future orders, local banks so important to the support of the giant Japanese operators off balance sheet fleet financing option have portfolios swollen with shipping exposure and its owners the famous Shikoku owners, are dealing with fixed price long term charters, yen denominated loans and a brutally weak dollar.

But for all those challenges at Marine Money’s 5th Japanese Finance Forum, the mood was upbeat, maybe not bullish, but certainly not grim.
Continue Reading

Living Off the Old

DVB Group recently reported its first quarter results and while management declared themselves satisfied with the result, in light of the business environment, new business will be taking a backseat to risk management for the moment. Nevertheless, with caution upmost in its mind, DVB stated that it “will generally support our clients with finance for new projects.”

Top line results improved markedly as net interest income for the 1st quarter rose 71.8% to EUR 51.7 million over the EUR 30.1 million recorded last quarter. This reflects lower interest expense, down 16.6%, as well as utilization, in cooperation with its clients, of a market disruption clause or the like which virtually eliminated distortions related to the international money markets.

These improvements were offset by reduced new business that was concluded on a selective basis.  As a result of lower volumes, fee and commission income was down 52.6% to EUR 15.6 million. Overall, consolidated net income before tax was down from EUR 27.1 million to EUR 16.7 million, a decline of 38.4%.
Continue Reading

A Frank Assessment

With the exception of the syndicated loan market, it is difficult to get a feel for the level of ship lending activity at any point in time no less any sense of trends. To the extent lending exists today, much of it has gone underground in the form of bilateral loans. So any intelligence we find on the subject is of great interest.

This week we received Deutsche Schiffsbank’s annual report for the past year and as the title of this article suggests the bank was extremely transparent in its disclosures. And, as one might expect, given their location in one of the hardest hit regions, it is going to be a tough year. Moreover, the bank itself is going through immense change as the merger with Commerzbank and Dresdner Bank continues.
Continue Reading

Grindrod Buys ABC and Expands Into ARA

Earlier this week, Grindrod Ltd, announced the acquisition of Associated Bunker Oil Contractors (“ABC”) group in Rotterdam for an undisclosed amount. ABC is a well-established physical supplier of marine bunker fuels in the ports of Amsterdam, Rotterdam and Antwerp (“ARA”), where it operates four bunkering tankers. The company also supplies marine bunker fuels for its own account.

The acquisition enhances Grindrod’s position twofold. First, it expands the recently established bunker barge business, involving the operation of bunker barges under long-term contracts to the oil industry in South Africa, into Europe supporting its strategy of expansion into international and niche markets. Secondly, the acquisition provides a base from which Cockett Marine, Grindrod’s trading arm, which trades and supplies marine bunker fuels, can further enhance its position in the Rotterdam market.

Maximizing Value

Wilh. Wilhelmsen ASA (“WW”) is in the process of restructuring the company into 3 business units, shipping, logistics and maritime services, with the intention that shipping and logistics will be carved out and listed as a separate distinct entity on the Oslo Borse. New investors will be given the opportunity to invest alongside Wilh. Wilhelmsen Holdings, in the new WW, which will own 100% of Wilhelmsen Lines and its many interests in shipping and logistics companies as shown herein.

The company provides shipping and logistics (“factory to dealer”) services within the automotive, construction and agricultural industries using an owned/operated fleet of 136 car carriers and RoRo vessels. The exercise is designed to create a pure play shipping and logistics business, which will be able to take advantage of the following market opportunities:
Continue Reading

Timing Is Everything

Begun a few weeks ago, Nordic Tankers rights’ offering of 25,176,592 shares, priced at DKK 10, was fully subscribed, raising net proceeds to the company of DKK 233.2 million, approximately $40.1 million of which $25.9 was in cash with the balance in the form of a debt swap. Concerned about relying on the existing group of shareholders, Nordic obtained underwriting agreements from interested shareholders, including Siva Limited, Rederiaktiebolaget Gotland and a number of individuals, for approximately 10% of the offering.

The effect of the offer was to improve the company’s equity ratio to 23.1% and increase its cash resources. In addition, the rights issue improved the company’s loan terms, as already deferred repayments on loans according to a moratorium may be further deferred to the beginning of 2012 and be repaid over a 24-month period.
Continue Reading

Markets In Disarray

The equity markets can best be described as volatile, although that characterization may be kind, as they seem to be heading in one direction only. Two companies, Ridgebury Tankers and Navios Maritime Acquisition have braved the onslaught but we suspect would have preferred a better choice of timing. Unlike the preceding IPO offerings, Crude Carriers and Scorpio Tankers, that took place earlier this year, Ridgebury is not the master of its fate. Specifically, its vessels are on option from a third party seller, Teekay, as opposed to an affiliated party, which implies certain time limitations. Despite the switchover from the Gemini to Heidmar pool, they remain on the road for a second week. As a firm believer in no news is good news, we remain hopeful that Bob Burke and his team along with Jefferies will be successful.

Clearly, Ms. Angeliki Frangou leads a charmed life or is an extraordinary negotiator. Despite the uncertain markets and a preliminary vote that was largely against the acquisition of a tanker fleet of 11 product carriers and 2 chemical tankers, shareholders of Navios Maritime Acquisition approved the transaction on Tuesday thereby avoiding the necessity of Navios Maritime Holdings becoming the owner/operator of the tonnage. According to Chris Wetherbee of FBR Capital Markets, the company was able to secure a 60% plus one majority vote from shareholders, but expects Navios’ ownership stake will likely be higher than its 33% target, as it likely purchased shares from dissidents. With three public companies under her purview, Ms. Frangou is approaching Peter G’s record of four. We are in awe of the capacity of these two industry leaders to manage successfully these distinct companies in different sectors with distinctly different shareholders.
Continue Reading