Wilhelmsen

Wilh. Wilhelmsen Limited AS (WWL) is an integrated shipping company.  Its subsidiary, Wilhelmsen Lines (WL), is one of the leading operators of car/ro-ro vessels, and its presence in this market has been enhanced since WL’s recent merger with NAL (see article elsewhere in this issue).  The international liner activity has always been the core business of WWL. Wilship is another WWL subsidiary involved in the tanker, bulk carrier and chemical carrier markets.  In addition, WWL, through its subsidiary Barber International Limited, is involved in ship management activities. Currently, Barber manages about 160 vessels.  Barwill Agencies, another WWL subsidiary, is linked to 140 agency offices around the world and is one of the world’s largest agency networks. In addition, Barwill operates a fleet of crew boats.

Weak market conditions, coupled with a weak US$ against the Norwegian Kroner, contributed to WWL’s results for the first eight months of 1995 so that they were lower than those in the corresponding period of 1994. Primary operating profit dropped by 18% to NOK 367 million and net income dropped to NOK 40 million vs. NOK 220 million in the first eight months of 1994. It should be noted, though, that a profit on sales of NOK 180 million was included in the results for the eight months period in 1994. On the other hand, only a 55% ownership in Wilhelmsen Lines was included in 1994 against 100% in 1995. Continue Reading

Tidewater Inc.

Tidewater is the largest supply vessel operator in the world and one that is going to become even larger after the completion of its merger with Hornbeck. With a total market capitalization of approximately $1.4 billion, Tidewater is one of the largest shipping companies in the world. In the past year, Tidewater’s stock (TDW-NYSE) appreciated by approximately 90% as a result of its satisfactory financial performance and its prospects for even greater growth both because of favorable market conditions and aggressive expansion plans.

In late 1994, Tidewater invested $240 million to acquire the assets of Brazos Gas Compression Company ($35m) and the assets of Halliburton Company ($205m), attempting to diversify towards the gas compression services. As a result, in the six months ended September 30, 1995 (fiscal 1996), revenues from the gas compression segment increased by 80% compared to the same period in 1994 (fiscal 1995), to $30.5 million. This segment now represents 19% of total revenues compared to 11.50% for the same period in 1994. The compression segment rents services and equipment to the energy industry. Continue Reading

Surfing the Cycles: The Ship as Derivative

by Bridget Hogan

Ride the ups and downs of the shipping world  rather than suffer the cycles of the industry.  This is the message from a London-based financier who is trying to attract new investors into the industry. Michael Hampton is with CEDEF Finance Ltd., which specialises in finding financing in ways which conventional banking is so far not pursuing.

He is trying to put into practice the obvious:  that if you can ride the cycles and make the right move at the right time, then you can reap the rewards. He wants the “bandwagon” element of shipping to be at least elevated if not eliminated so that new investors using new tools can be attracted in.

From plush offices overlooking the throng on the main thoroughfare of Piccadilly, he says he is a committed man – committed that is, to finding a way out of the problems which seem institutionalised in shipping finance. He wants to apply to shipping a type of investment tool developed in the oil industry.  When working in financing in the oil industry, Hampton was involved in setting up similar systems.  Now established there, he seeks to introduce investors used to this system in other areas to shipping. Continue Reading

Seacor Holdings, Inc.

Seacor is one of the major international operators of supply vessels that service the offshore gas and oil exploration industry. In addition, Seacor provides environmental and oil spill response services to shipowners, refineries, pipelines, exploration and production platforms and tank terminals through its wholly-owned subsidiary, National Response Corp. Its fleet operates in the US Gulf of Mexico, the North Sea, offshore West Africa and Mexico. Similar to other companies involved in this sector, Seacor is exposed to the cyclicality of the oil and gas exploration industry and the local policies that influence drilling activities in different regions. To moderate its exposure, Seacor maintains a diversified fleet of vessels that can serve different needs of the oil and gas exploration industry and allocates its fleet in the various geographical areas so that it achieves maximum utilization. For the first three quarters of 1995, 42% of Seacor’s offshore marine revenue was generated from international operations. On the other hand, more than 1/3 of its offshore services revenue originated from only two customers (20% originated from Mobil Oil Corporation and 17% from Conoco, Inc.) indicating a heavy reliance on the level of activity of these two customers. Continue Reading

Shipping Shares and the Oslo Stock Exchange

by  Susanne Munch Thore of Wikborg, Rein & Co., Olso

Listing of Shares on the Oslo Stock Exchange
On the Oslo Stock Exchange, about 125 classes of shares are listed on the Main List, and about 35 are listed on the SMSB (small- and medium-sized businesses) list. The Oslo Stock Exchange also lists ten classes of primary capital certificates that are issued by savings banks.

According to statistics released last year, trade in Norwegian securities which are listed both in and outside of Norway have predominantly returned to Norway. In last year’s first quarter, trade on SEAQ in Norwegian shares listed in both Oslo and London was 69% of the value of trade in the same shares in Oslo.

Foreign ownership in Norwegian stock-listed companies is, on average, somewhat greater than 30%. This figure is high when compared to foreign ownership of European companies in general. The trend of a high proportion of foreign ownership of Norwegian companies has not changed subsequent to Norway’s rejection of EU membership. As a result of Norway’s adherence to and implementation of the European Economic Area Treaty, legislation pertaining to foreign investment has been liberalized since January 1, 1994. Further liberalizations are currently underway. Approximately 20% of the 45-50 shipping companies listed on the Oslo Stock Exchange are not incorporated in Norway. Continue Reading

Norway Today

By Bridget Hogan

Norway has always had a strong tradition in the shipping industry but the long history has not led to a traditionalist approach to operations. Last year was no exception – the mergers and acquisitions of large companies now seems to have set down the characteristics of the industry for the rest of the decade.

Yet, despite all the excitement of last year with the activity in the who-owns-what field, and the continuing importance of the Oslo Børs for trading shipping shares, the Norwegian market remains somewhat bearish. The shipping industry in Norway is dominated by the oil tanker sector, although there are successes in niche sectors such as gas, chemical and car carrying. Granted that it is the fortunes of the oil sector which dictate the fortunes of Norwegian shipping, the sluggishness in the US market, where oil demand is not rising as much as the Norwegian shipping industry would like, will have an effect.

“Consolidation of the (Norwegian shipping) industry will continue in 1996 – despite the level of the activity in 1995. I believe that in this way Norwegian owners will be able to meet competition from other sectors of the industry around the world.”
- Berit Henriksen
General Manager, DnB Oslo Continue Reading

Norwegian American Line – NAL

Norwegian American Line – NAL (Den norske Amerikalinje) is a major player in the car and vehicular cargo carrying sectors. It owns 70% of NOSAC (Norwegian Specialized Autocarriers), a chartering and operation pool for car/ro-ro vessels, through which it operates eight of its own vessels. The remaining 30% of NOSAC is owned by Wilh. Wilhelmsen Limited AS (WWL). In addition, NAL is part owner of seven additional car/ro-ro vessels which are managed outside NOSAC. NOSAC manages 18-20 car/ro-ro vessels and has no staff; NAL assumes operational responsibilities. NOSAC has its own offices in Yokohama, Seoul, Baltimore and London and local representatives in Jacksonville, Seattle, Santiago, Sao Paulo and Beijing. Continue Reading

Merger Mania, Part Two

In our last issue we referred to the merger mania that prevailed in the shipping industry in 1995.  In particular, we considered the consolidating spirit that captured the US offshore services sector and we focused on the mergers of Tidewater with Hornbeck and Seacor with Graham.  However, consolidations took place in other sectors of the shipping industry and in countries other than the US. Norwegian companies were among the most active in the M&A arena during 1995, and the mergers between Bergesen and Havtor and Wilhelmsen Lines AS (WL) and NAL caught investors’ attention worldwide.

The merger between Bergesen and Havtor (Bergesen is the acquiring company) resulted in the creation of one of the world’s largest shipping companies with a total market value in excess of $1.5 billion. On the other hand, WL’s merger with NAL resulted in one of the world’s most influential car carrying/ro-ro companies. What’s very interesting is that before Bergesen proceeded with its merger with Havtor it had become, in October 1995, the majority (50.1%) shareholder of NAL while Wilh.Wilhelmsen Limited AS (WWL) – WL’s parent company – was the second largest shareholder with 35.5%. On November 15,1995, Bergesen acquired 34% of Havtor’s shares and at simultaneously sold its interest in NAL to WWL. After these transactions took place, WWL became the owner of approximately 92% of NAL’s shares – it also acquired 5,043,876 shares through Fondsfinans – and Bergesen contacted Havtor’s Board with a proposal for a merger of the two companies. Havtor’s Board immediately accepted Bergesen’s proposal. Continue Reading

Norwegian American Line – NAL

Norwegian American Line – NAL (Den norske Amerikalinje) is a major player in the car and vehicular cargo carrying sectors. It owns 70% of NOSAC (Norwegian Specialized Autocarriers), a chartering and operation pool for car/ro-ro vessels, through which it operates eight of its own vessels. The remaining 30% of NOSAC is owned by Wilh. Wilhelmsen Limited AS (WWL). In addition, NAL is part owner of seven additional car/ro-ro vessels which are managed outside NOSAC. NOSAC manages 18-20 car/ro-ro vessels and has no staff; NAL assumes operational responsibilities. NOSAC has its own offices in Yokohama, Seoul, Baltimore and London and local representatives in Jacksonville, Seattle, Santiago, Sao Paulo and Beijing. Continue Reading

Merger Mania, Part 1

1995 was a record year for the financial markets in the US. Almost all of the previous records were broken as stocks climbed to an all time high and bonds had returns that made many investors happy. According to some opinions, this spectacular performance of the stock and bond markets triggered the merger mania that captured top executives in almost every single industry. More than 9,000 mergers took place in 1995, amounting to approximately $450 billion. In industries such as telecommunications, media, financial services and high technology, the leading companies came together to form even bigger organizations. The early 1990′s belief that large organizations are inflexible and therefore cannot compete efficiently in the global arena sounded like a theory from a forgotten era. The question of 1995 was “How big do you have to be to dominate your industry?”

Following the trend, many shipping companies around the world entered into mergers at an unprecedented pace. Although the size of the shipping mergers was not similar to that between Disney and Capital Cities-ABC or Chase and Chemical Bank, the mergers still clearly signaled that consolidation is at the top of a shipping company’s agenda. Continue Reading