London calling. London calling.

…. more education about shipping is key to attract investor appetite in London.

Marine Money returned to London after a long absence to host a wonderful 1st annual conference on 21st January 2010.  This was the first of 14 Marine Money conferences for 2010 and we got off to a cracking start.  Over 180 delegates and speakers attended with about one third coming from overseas.
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We Have Not Yet Gotten Past Restructurings

K-Sea Transportation Partners announced last week that late in December, its subsidiary, K-Sea Operating Partnership had entered into amendments of both its revolver and term loan facilities. The revolving credit facility is led by KeyBank, Bank of America, Citibank, Citizens Bank and HSBC. The amendment to the revolver provides for a reduction of the lenders’ commitments from $200 million to $175 million, subject to a maximum borrowing base equal to 75% of the orderly liquidation value of the vessel collateral, and eliminates the $50 million accordion feature. In addition, the agreement calls for the acceleration of the maturity date by 2 years and additional security. The fee to amend the agreement was $1.275 million.
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Stopped at the Line of Scrimmage

One hates to see a good deal fail to come to fruition, particularly when its about to cross the finish line. But these things do happen and are at times inexplicable except to those in the know.

We understand that RS Platou Finance successfully sold what we believe to be the first K/S deal of the year, Bergshav Tank DIS. The transaction involved the acquisition of two 47,000 DWT built in 2007 at Hyundai Shipbuilding in what Platou portrayed as an asset play opportunity. The price per vessel was $26.5 million, which is historically the lowest price reported for this vessel type since the double hull requirement began in 1993. Bergshav Management AS was to act as commercial manager and participate in the project with 15% of the equity.
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Seanergy on the Road

This week Seanergy Maritime Holding is on the road with its bankers, Maxim Group LLC and Rodman & Renshaw LLC to raise about $25 million, which together with Mr. Restis’ commitment of $5 million will partially finance the acquisition of a Capesize newbuilding. The vessel, purchased for $89.5 million has a five-year time charter at $53,500 per day.
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When You’re Good, You’re Good

One of the most respected public shipping companies, Nordic American Tanker Shipping, also chose not to be left out of this veritable run on the capital markets. The company, which specializes in Suezmax tankers, is perhaps most highly respected for its disciplined approach to the market and for eschewing debt. Consequently, its balance sheet is pristine, with cash on hand of $88.3 million and an unutilized credit facility of $500 million.
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When It’s Hot, Its Hot

After a two-day road show, involving almost 100 investors, Aegean Petroleum Network, with its bankers, Goldman Sachs and Jefferies, priced the company’s offering of 3.9 million shares on Thursday. The offering was well received and many times oversubscribed, with institutions being the main purchasers. With strong demand, evidenced by a rising share price in the worst market week of the year, the shares were priced at $32.75, a discount of less than 1% (versus the more typical 4% for a follow-on offering) off of the prior day’s last trade at $33.18. The successful marketing of this issue is a testament to the story, the management team, its success since going public and last but not least, the involvement of Peter G and his extraordinary track record. Details of the transaction are shown below in the Guts of the Deal.
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Easy Decision

With the choice to lend commercially, where one is exposed to the risk of the borrower defaulting, or a “risk-free” loan, which would you do these days if you were a bank? Stephen Antczak and Jung Lee of Cantor Fitzgerald explained in their recent report titled “Capital Structure Insights: It’s All About Consistency” why banks may have little interest or incentive in lending commercially at this juncture.
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Not To Be Left Behind

Last week, Paragon Shipping Inc. filed a shelf registration to sell up to $500 million of various equity and debt securities. In addition, the company registered 9,214,206 shares to be sold in a secondary offering. These shares are controlled by affiliates of Mr. Michael Bodouroglou, the company’s chairman and chief executive officer. Proceeds, excluding the secondary shares, may be used to make vessel acquisitions and capital expenditures, debt repayment, working capital and general corporate purposes.

Paying the Bill

On Tuesday, after the market closed, Aegean Marine Petroleum Network announced that it would utilize its recently effective shelf registration to issue 3,906,000 shares of its common stock in an underwritten public offering. The closing price of the shares was $32.45, which would equate to an equity raise of approximately $126 million on a gross basis. The next day, in a market roiled by news of restricted lending in China, the shares traded up $0.23 to $32.72.
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Structuring Upside while Minimizing the Downside

Last week, Diana Shipping announced its intention to co-invest in a new company expected to invest in containerships over the next 12 to 18 months. Diana intends to invest $50 million for a minority stake, with the balance, as yet undisclosed, being raised in a private offering to institutional and accredited investors. Diana would further benefit from providing administrative and vessel management.
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