Stelios Holds Celebration Party

Correction

Citigroup Promotes Simon Booth

DVB Hires Thomas Falck

Editor: Transparency Makes Better Shipping

For certain it has been a sobering year for shipping markets and for the whole world. The confluence of events that really started with the beginning of the recession in the US, highlighted by the travesty of September 11th and punctuated by the “War on Terror”, Enron, the analyst fiasco and even shipping share ACLN (the first forcibly de-listed NYSE company in 27 years), has made the whole appearance and feel of the world completely different. One of the better offshoots of the financial/business headaches is the growth in importance of transparency in the shipping business.

The day this note is being written NIB Capital in the Hague acknowledged that it was securitizing $670m in shipping debt in five classes rated from S&P AA+ to BBB. Yes they have some investment grade debt! Marketing started on June 6th and is to target non- shipping institutional investors in collateralized debt. NIB notes that the move is to diversify risk so that it can grow its $2 billion shipping book further with the $670m constituting about 5-6% of the total credit portfolio of the entire bank. This Editor finds it a very positive move for any bank to do such and the hardest thing in the process was likely structuring the deal so that the rating agencies would even look at it. Not that the loans were or are bad, but the process must have been grueling. Continue Reading

Flag States Should Re-assert control

The headline said it all “Tonga . . .” The bar to entry into the open, i.e. flag of convenience, ship registration business was never very high, just find a friendly government, write up some laws and regulations, and hang out your shingle. It helps if you have a “better mousetrap’, Americans wanted to drink alcohol and Panama was born, the world went to war and Panama enabled the US to ship war materials to Europe in spite of isolationist laws. Oil companies wanted an alternative to Panama and “voila” Liberia was created. Cy Wentworth happened to visit the New Hebrides, get stuck there by a typhoon and soon Vanuatu was open for business. Panama lawyers anticipated problems with the Noreiga government and set up Belize.

But the ease of entry was always a two edged sword. It could be argued that Vanuatu, the Bahamas and Marshall Islands, among others, were all started as a result of the adverse publicity generated by Sargent Do and his methods of dealing with political rivals for control of Liberia. Vanuatu, again among others, certainly benefited by US efforts to topple the Noriega regime in Panama.

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The oslo 8: OSE Shipping Equity Values

Since Stelmar successfully completed its IPO in New York last spring a lot of the focus on the public shipping sector has moved in the same direction. Since then even more companies have raised capital in New York either through IPOs or a secondary/ADR listing. The Athens Stock Exchange is still not open to shipping companies under a set of rules shipowners are happy with, Copenhagen is as silent as ever, and the same can be said for Stockholm, London, Amsterdam, and Milan. In Asia there is only small interest with sporadic activity.

So what about Oslo? Has the “World’s Shipping Bourse” lost all its glory and is now only an underpriced, illiquid disaster waiting to happen? We think not. There are still shipping companies worth nearly $5 billion listed in Oslo and although there have been no new IPOs or significant secondary listings for years it would be wrong to disregard it completely. There is still a good mix of non- tanker shipping companies that we feel is worth a second look.

On the coming pages we have taken a sharp look at 8 companies listed in Norway. We will give you a brief description of their current valuations and give a few hints of what should or should not be done to help bring foreign institutional investors back to Oslo.

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Marine Money Launches Tanker Index

Recently we got a callfrom a loyal reader of Freshly Minted (FM) noting that while the data regarding the “New York Liquid Bulk Peers Share Performance” chart that has appeared in most editions of FM of late and has evolved over the year to include more and more data, was interesting but “What does it really mean”. Well, that reader knows who they are and in fact most weeks we get a call from this person and we love and encourage further feedback.

The initial response to the question of what the data means was one akin to “Make of it what you will.” We have produced estimates on a range of tanker companies and were hoping to give a basic knowledge of some of the share performance of the companies noted. However this combination comment/question resonated. While each contingent part of the data has relative and varying degrees of importance with each company, and is therefore a valuable piece of information, why have all the data and not at least try to benchmark it? Continue Reading

OUR OWN PRIVATE ENRON: Reflections on the End of the Shipping Junk Bond Era

By Sydney P. Levine, President, Shipping Intelligence, Inc., New York

Constructing a meaningful sentence containing the words “Enron” and “shipping junk bonds” seems like a challenge in some obscure parlor game. The two situations seem to be drawn from different universes. On the one hand a publicly held company in an industry that didn’t exist a few years ago, and on the other hand an industry primarily in private hands that is older than recorded history. But I think that the two situations, different in so many ways, are fundamentally similar.

I started thinking of this unlikely comparison after reading of the recent dismemberment by the bankruptcy court of the Millenium Seacarriers fleet. Millenium was the last of the shipping junk bond issues and its demise may mark the end of their rise and fall cycle. Continue Reading

TORM: “ON DAQ”

In Freshly Minted (FM), our weekly online executive summary, of March 7th, our team, lead b y Nicolai Heidenreich, took a look at the board approved listing by D/S Torm (the Danish product tanker and bulk liner owner/operator) of American Depository Receipts (ADRs) to be listed on the NASDAQ in New York at some point in late March or early April.

A road show to follow immediately post-listing in the US to trump-up interest in the shares is to be led by Jefferies. The US listing is designed to attract US and institutional investors, improve the volume trade of the shares and therefore their liquidity and, in doing so, improve the valuation of the company so that it is more on a par with other US listed public shipping equities, notably tanker shares, which, while still cheap by traditional valuation standards – even for “deep cyclicals” – re c e i ve a better valuation in the US than equivalent companies on foreign listings, especially a Copenhagen small-cap. The purpose of this article is to give our readers a reasonable valuation of the company and to discuss the relativ e merits and/or disadvantages of such an ADR listing. Continue Reading