Stena/Concordia Negotiate Major Financial Package

Following last year’s bout of expansion, the Stena Group has negotiated a major refinancing package with a syndicate of international banks. The total value of the deal is $166.95m and includes loans worth $116.85m for six VLCCs of between 269,000 and 273,000 dwt. The ships involved in the deal consist of the Stena Concept, Congress, Convoy, Contender, Continent and Constellation, all bought last year from the Ludvig Group. The remainder of the package consists of $47.4m relating to the 458,000 dwt ULCCs Stena King and Stena Queen, both of which are on charter to Vela Maritime at the rate of $29,000 per day. A further $2.6m has been provided in working capital.

Commenting on the deal, Concordia finance director Mats Bergelund told Marine Money, “The new loans will be mainly used to replace interim or bridging finance used for the purchase of the Ludvig vessels last year.” The lead bank in the syndicate was Barclays, which provided $26.737m. The largest participants in financial terms, however, were the UK branch of Morgan Guaranty Trust, and the Swedish institutions, Scandinaviska Enskilda Banken and Svenska Handelsbanken, which each contributed $41.737m. The balance of $15m was provided by Deutsche Schiffsbank. The arrangement fees for the transaction were $800,000.    Continue Reading

Opportunity Knocks at Nortankers

Despite all the negative talk about Nortankers and the weak results in 1990, the company turned in very strong results for the first quarter of 1991, suggesting that management’s strategy may be beginning to pay off.  After reporting a net loss of $16.7m on revenue of $14.2m in 1990, the company reported a profit of $3.98m on gross freight and demurrage revenue of $12.16m during the first quarter.

The company operates a fleet of four VLCC’s that range in age from 13 to 17 years old.  Following an erratic first quarter in the charter market, which saw rates climb as high as WS88.5 and sink as low as WS35, the company reported that it was satisfied with the rates it was getting for its ships.  The Nor Master is fixed for continuous voyages for nine months.

During the first voyage, the ship is only expected to earn $6,000 per day, but thereafter it is estimated to earn $18,000 per day, with an option for three months at $22,000 per day.  Following a voyage from the Gulf to Europe, the Nor Adventurer will be employed on a trial basis with Sanko Steamship, whereby Sanko will seek cargoes for the vessel in the market for Japanese controlled tonnage.  The Nor Explorer and the Nor Frontier are currently trading on spot. Continue Reading

OSG Sells Ship to Peter Pappas

Shipowner Peter Pappas recently completed the purchase of the 18 year old combination carrier ex-Garden Green from US shipping company Overseas Shipholding Group for a price estimated to be approximately $10m.  The deal was 100% financed by Sanwa Business Credit Corporation, a subsidiary of the Sanwa Bank in Japan.

The loan is a four and a quarter year term loan with a $3.5m balloon payment due at the end.  The balloon is based on scrap value of the ship at an estimated price of $115/ton – recent scrapping in India has ranged from $205/ton to $190/ton.  In addition, the loan carries a $2.5m personal guarantee from Mr. Pappas.  Payments for the first two years are fixed, and Sanwa has the option to accelerate payments in the third year – though, if they do, Mr. Pappas can refinance the loan at that point.  Continue Reading

Liquidation Looms Again for Fearnley and Eger

The prolonged financial crisis at Fearnley and Eger is reaching a climax, with the possible liquidation of the company and the sale of its assets. This is the conclusion of Ole Lund, head of Oslo law firm Lund and Co, who has been advising Fearnley’s in their negotiations with creditors. He told Marine Money, “The company will probably be wound up and the assets will probably be sold off.”

A number of prospective buyers are currently planning bids for the shares and assets. Klosters has already made a bid for Fearnley and Eger’s Renaissance Cruise business, but this has been rejected. Fearnley and Eger, which went into Chapter XI earlier this month, has petitioned the Oslo bankruptcy court to continue trading under creditor protection for a maximum period of three months. Continue Reading

Leif Hoegh Aims for Foreign Equity with Ship Transfer

A scheme primarily aimed at raising foreign equity capital has been devised by Leif Hoegh. The Norwegian bulk and liner shipping group has transferred five Panamax sized OBO carriers to Hoegh International Shipping (HIS), which was formed as a Bermuda registered subsidiary in August last year. The ships, which are currently owned by the holding company Leif Hoegh and Co A/S (LHC), will continue to operate under the Bahamas Registry, so there will be no immediate savings in operating costs.

The recently proposed Norwegian tax changes did not directly influence the decision, although tax considerations are connected with the move. Hoegh financial director Eric Norman told Marine Money, “We have been considering this move for about five years. The main purpose is to operate the ships in a tax regime, which will help to attract foreign capital. Norwegian tax laws do not offer any incentive for foreign investors. We have taken the first step in a long term plan by moving the ships out to Bermuda, and we may make further moves towards raising capital later this year.” Hoegh believes that it is important that it has a tax competitive domicile, and that shareholders should be taxed on dividends according to the rules of their home country. A substantial portion of the Hoegh fleet has been moved outside of the Norwegian national register, including a number of vessels in the Norwegian International Register (NIS).   Continue Reading

Global Ocean Gets Approval to Convert

Global Ocean announced that, at their annual meeting, they received approval from their shareholders on all of their proposals, including one to convert the company into an ongoing concern and to purchase a vessels from Tsakos Shipping and Trading, S.A.  The move will allow the company to strengthen their balance sheet in the short term and to renegotiate their debt repayment schedule.

In addition, the company has announced first quarter results.  For the period, revenue was $4.21m, down from $5.2m, while operating profit before depreciation was $751,000, or $0.25 per share.  After depreciation and amortization, the company reported a loss of $449,058.  The increase in depreciation costs was primarily attributed to the conversion of the Global Star to the oil trades. Continue Reading

Frontline Sells Two Newbuildings

Swedish bulk shipping group Frontline has been negotiating the sale of two of three Suezmax tanker newbuildings currently under construction in Spain. The third vessel, built at the Puerto Real yard of Astilleros Espanolles (AESA), has been chartered to Petromin for ten years at a rate reported to be in excess of $25,000 per day. Commenting on the transaction, Frontline’s Kaelle Svennson told Marine Money, “We have been negotiating the sale of the Suezmax tankers mainly to streamline our fleet and concentrate on our OBO carriers. The tankers are also being built with single hulls, and do not have as good prospects as double hull vessels. It is reported that the ships are set to change hands for around $50m, compared with the current newbuilding price of $55-60m. Frontline, however, was unable to comment on the price. Continue Reading

Benor Heads for Oslo Listing and Increases Capital

The Bermuda based shipping business Benor Tankers is aiming for a listing on the Oslo stock exchange, and is also planning to increase its share capital. The equity is being increased from $61.93m to $63.93m. The issue price has been set at $6 per share, and the shares have a nominal value of $10. The company needs 500 shareholders, holding at least 200 shares each, to comply with OSE regulations. Continue Reading

’91 Vessel Prices Like a Good ’88

The end of the Gulf War and unseasonally strong freight rates for dry bulk ships are fueling increased interest in second-hand dry tonnage.

E.A. Gibson Shipbrokers says in a recent report that there have been “numerous low capital bulker sales, though the improving long term view is producing sales of modern handymax bulkers and creating substantial interest in modern panamaxes, which are considered by many to be the rare animals of the future.”

A US-based owner Marine Money spoke with says handy-size bulkers built in the mid-70′s have appreciated in value perhaps 10 to 14 percent in last two or three months on deals concluded. Three 1977-built bulkers with capacities between 20,450 and 23,791 dwt – the Ionian Sailor, Elaine, and Masashima – sold between $4.5 million and $4.8 million in April.

Because of the strong dry cargo market, Panamax bulker sales have been stimulated, with used ships looking attractive when compared to the price of newbuildings. Four Brazilian-built panamax bulkers, the Gulf Grain, Gulf Steel, El Amaan, and El Aalim – all built in 1982 and 1983 – were ships were recently sold to Suisse Atlantique for a total of $56 million. Continue Reading

Yang Ming to be Privatized

The state owned Taiwanese line Yang Ming Marine Corp. is heading for privatization and a stockmarket quotation. Unless there is a major collapse of share prices on the Taipei exchange, the company plans to make an initial offering to the public of 200m shares, and a further issue of 300m over the next three years. This will reduce the state shareholding to less than 50%.

There are no details on how much Yang Ming expects to raise from the issue, but the proceeds will be used to finance the construction of 11 container ships. The newbuilding program, originally planned last year, was shelved because of high newbuilding prices and the Gulf crisis. Continue Reading