Aban Offshore Concludes Private Placement

Over in India, Aban Offshore has concluded its qualified institutional placement (QIP) comprises 5,697,135 new shares and raised Rs 675.50 crore (USD 150 million). The offering, managed by Citigroup Global Markets India, was eventually priced at Rs 1224.30. This represents a discount of a mere Rs 11.7 or 1% discount to last Friday’s closing price of Rs 1236. The private placement offer which opened on November 13 and closed on November 17 was well received and oversubscribed. For the existing shareholders, the private placement will result in an immediate equity dilution of nearly 13%. Continue Reading

Direct From Qingdao

Marine Money flew to Qingdao to attend COSCO’s World Shipping Summit last week. We found the speech delivered by China’s Minister of Transport, Li Shenglin, sprinkled with useful facts on China’s burgeoning maritime industry. 

-          China is emerging as a key maritime nation after 60 years of rapid development. China’s fleet is ranked 4^th in the world, with 184,000 vessels of all types or an equivalent of 124 million DWT. Continue Reading

MISC secures USD 100 Million For Offshore Project

Following the announcement that it has clinched a contract for the lease of 2 mobile offshore production units, MISC’s subsidiary Malaysian Offshore Mobile Production (Labuan) has completed a USD 110 million seven year project financing with mandated lead arrangers ABN AMRO, ANZ, ING Bank, Mizuho Corporate Bank and Sumitomo Mitsui Banking Corporation. Continue Reading

CIMC Begins Full Acquisition of Yantai Raffles

China International Marine Containers Group (“CIMC”) has appointed Goldman Sachs (Singapore) for the full acquisition of Singapore’s Yantai Raffles Shipyard (“Yantai Raffles”). This move by CIMC comes as the next step in its bid to takeover the remaining Yantai Raffles’ shares, of which CIMC already owns 18.27% through its wholly owned subsidiaries CIMC HK and Sharp Vision Holdings.    Continue Reading

Bond Frenzy

Bonds are becoming an important source of capital for shipping companies. Earlier this month, Hyundai Merchant Marine (“HMM”) has successfully issued a KRW 200 billion (USD 169.3 million), 6.7 per cent two year bond. Korea Line has also issued two tranches of 3 year convertible bonds domestically – KRW 50 billion and KRW 40 billion (USD 76 million) respectively. Over in India, Great Eastern Shipping is looking into a Rs 2 billion (USD 43 million) 10 year bond issuance. The bonds will carry a coupon rate of 9.6% and Trust Investment Advisor has been appointed as the arranger.

STX Pan Ocean Issues Bonds for the 4th Time

Last Friday, news came out that STX Pan Ocean had raised 200 million worth of convertible bonds together with appointed bookrunner Goldman Sachs International, co-lead manager Tong Yang Securities and co-manager BNP Paribas Capital (Asia Pacific). Based on our records, this would be STX Pan Ocean’s fourth bond issuance in 2009 but the latest offering marks a clear deviation from the previous domestic straight bond issuances. This time, STX Pan Ocean has tapped the pool of global investors, riding on the positive sentiments both in the stock and dry bulk markets. Freight rates in the dry bulk sector have been surprisingly robust over the past three months with the BDI bursting through the 4,000 mark last Friday.    Continue Reading

Oppenheimer’s 4th

We had the pleasure of attending Oppenheimer’s 4th Annual Industrials Conference this week. Reflecting difficult and uncertain markets, the tone was muted and at least at the open presentations interest has seemingly flagged. Like the owners waiting for the perfect distressed deal, investors, too, seem to be circling and asking the difficult questions. Can you maintain your dividend? How low will asset values fall and so on? We wouldn’t call it bearish but it was certainly circumspect. Here are some of our takeaways. As always we leave the analysts to do the heavy lifting on the numbers.

The early morning slot went to Capital Product Partners LP with Iannis Lazaridis presenting the company. Despite the continued deterioration in the product markets, CPLP’s strategy of long-term employment continues to pay-off with 3rd quarter results in line with expectations. Distributable income was down due to lower revenues from a lack of profit sharing and higher interest costs attributable to the increased margin agreed in the recent loan amendment.

However, the company now has to face the difficult market with eight vessels coming off hire in 2010. MR spot market rates are at the lowest level in 20 years and consequently period activity is reduced.

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An Investor Looks at the Space

As an industry insider, we perhaps think too much or maybe not. We focus more on the micro – looking at the shipping markets, commodity driven demand and supply. In our world, the macro is beyond our ken and will take care of itself. We are part of the shipping industrial complex and for that reason we are somewhat jaded in our views. We have sat through innumerable investor presentations and wondered what are the investors thinking? How do they look at our world? What attracts them and where are the opportunities? And, most importantly, how and why do they invest?

In an attempt to answer these questions or at least understand the mindset of an investor, we were fortunate to have the opportunity of talking with a private equity investor, Gregory Prata of Gotham Private Equity Partners, L.P. (“Gotham”). Gotham is a private equity firm, which focuses on middle and lower-middle market companies. Backed by a network of high net worth families, Gotham is focused on originating, executing and managing proprietary private equity transactions and providing strategic advisory services. Gotham invests in leveraged buyouts, buy-and-build strategies and special situations and provides capital to growing companies in various industries.  The firm is comprised of a team of professionals who have been investing in private equity together since 2001.  Gotham was formed this fall.
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Seanergy Extends

Also on Friday, Seanergy Maritime Holdings announced that its banks have agreed to a waiver extension of its LTV covenant up to January 1, 2011. This avoids the potential issue with its accountants with respect to the treatment of long-term debt, which will now remain classified as such.

Diana Finances

It pays to have a strong balance sheet. Last Friday, Diana Shipping announced that it had obtained a ten-year term loan for $40 million from Bremer Landesbank. Proceeds will be used to part finance the purchase of the M/V Houston, a 177,729 DWT Capesize bulkcarrier built in China. The vessel is chartered to Shagang Shipping Co., the guaranteed nominee of the Jiangsu Shagang Shipping Group Co. for approximately 60 months at a gross rate of $55,000 per day.
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