Game Changers?

In their 4th quarter earnings release, Golden Ocean Group Limited announced that its application for a secondary listing in Singapore had been approved by the Singapore Exchange (“SGX”). The company already has an operational presence in Asia and saw the opportunity offered by the July 2009 Memorandum of Understanding between SGX and the Oslo Bors (“OSE”), which facilitated a simplified and accelerated dual listing process between the exchanges. This will be the first secondary listing by a Norwegian firm under the new accords.

From our perspective, this is an interesting transaction. Not only is this an example of a western company seeking equity capital in the East, it also raises the question of whether the market would follow the trendsetter, John Fredriksen, who was the first to bring his company to the U.S markets. The successful listing of Golden Ocean will blaze the trail for more to follow and strengthen Singapore’s position as a maritime and financial hub. Continue Reading

Plan B(LT)

Berlian Laju Tanker (“BLT”)’s acquisition of Camillo Eitzen & Co ASA (“CECO”) may have hit a speed bump when its initial transaction structure, which involved the issuance of mandatory exchangeable bonds (“MEBs”), was rejected by the Indonesian market regulator. But we understand that the company and its advisor RS Platou Markets remain resolute and are working hard on an alternative plan. Since then, a series of developments have occurred that added uncertainty to BLT’s quest for CECO and we hereby provide a summary of these developments in chronological order.

On 1 October 2009, Eitzen Chemical ASA (“ECHEM”) reached an agreement with most of its lenders (all syndicate loans and most bilateral loans) on the restructuring of its bank debt. However, this was conditional upon a new equity issue of a minimum USD 100 million by November. ECHEM was in dire need of capital injection. Continue Reading

Buss Capital Restructures KG Funds in Singapore

Watson, Farley & Williams LLP (“WFW”) has advised three separate Singapore-based partnerships on the restructuring of their container and lease portfolios and USD 1.2 billion of related debt financing in Singapore, to allow the Partnerships to take advantage of Singapore’s Approved Container Investment Enterprise (“ACIE”) scheme, which provides container owners with concessionary tax rates on container leasing and management activities. The Partnerships are owned by German KG funds sponsored by Buss Capital GmbH & Co. KG of Hamburg, Germany.

From 1 April 2008, leasing of containers has been included under the Maritime Finance Incentive (“MFI”) and an ACIE will enjoy either a concessionary tax rate of 5% or 10% on its income from leasing sea containers (by way of operating or finance leases) to onshore and offshore lessees, depending on the level of local business spending and headcount commitments. The management company of an ACIE will also enjoy a 10% concessionary tax rate on its management fee income derived in connection with the management of an ACIE.

A Growing Force to be Reckoned With

Private equity and sovereign wealth funds have been much-touted by the media as potential alternative sources of capital for the shipping industry but there have been few success stories lately. This week, we are very pleased to report on one particularly interesting transaction which clearly demonstrates that private equity and sovereign wealth funds do have a role as a capital provider for the shipping sector, albeit in a rather indirect manner.

An investor consortium comprising affiliates of New York based Kohlberg Kravis Roberts & Co. L.P., GIC Special Investments Pte. Ltd. (the private equity and infrastructure investment arm of the Government of Singapore Investment Corporation) and China International Capital Corporation Limited has announced an investment of USD 160 million for a significant minority stake in International Far Eastern Leasing Company Ltd. (“IFELC”), the leading provider of financial leasing in China. The investment will support IFELC’s future growth as it moves to capitalize on the attractive potential in the underdeveloped financial leasing space in China. Continue Reading

The CSL Group Invests in Indonesian Flag

The CSL Group Inc. (“CSL”) of Montreal, Canada, a world-leading provider of marine dry bulk cargo handling and delivery services, has invested in the Indonesian flagged, floating offshore transshipment platform “FOTP Derawan”, constructed at the Yahua Shipyard in Nantong, China. The vessel will be operating offshore Kalimantan, Indonesia for PT Berau Coal.

This was a complex multi-jurisdictional transaction involving CSL’s international partners and its various subsidiaries. The Singapore office of Watson, Farley & Williams LLP advised on the overall transaction structure, the shareholders’ agreement governing relationships of the relevant entities, the loan and security agreements for the financing of the vessel and the various commercial agreements (including the construction contract and charter arrangements in relation to the vessel), which were necessary for the closing of the transaction. The transaction team consisted of Chris Lowe, Damian Adams and Ivan Chia.

A Masterful Blend of East and West

The role of ship finance advisors is undoubtedly more pronounced today when traditional bank debt financing remains hard to come by. Shipowners are becoming more receptive towards creative financial structures so as to gain access to the pockets of liquidity available. This week in Marine Money Asia, Dimitris Belbas, Head of Ship Finance of Seafin, shares with us more about Seafin and his views on the current ship finance market. 

Seafin’s Profile

Seafin was established in Singapore in April 2007 as a joint venture between the Eurofin Group, one of the biggest shipping finance advisory companies and Seven Oceans, one of the few independent ship-broking firms in Japan. With Asia’s increasing importance in the maritime industry, Seafin’s objective is to maximize the synergies between the Japanese and Asian shipping networks with the European know-how and expertise in shipping finance. Continue Reading

Yujin International Goes to London

If there’s one thing that’s receded into the distant past, it’s the boom of shipping IPOs. A product of highly liquid capital markets and robust shipping markets, those days already command a bit of nostalgia even as we pay dearly for their excesses. As large operations with major ships plied the major international exchanges, a few smaller deals got through, most notably on the London AIM (Alternative Investment Market). One of these has already been privatized but a couple quietly remain.

It was rather unexpected, however, to see Singapore-based bunkering company Yujin International announce admission to the London AIM this month in a deal organized by nominated advisor and broker Seymour Pierce.

The company listed with 30,000 shares priced at GBP 0.33 each, making its total market capitalization after expenses just shy of GBP 10 million. Of this amount, Company Director and Joint Managing Director Captain Joseph Ting Siew Chiong holds 18%, while Company Director and Joint Managing Director Captain Liew Chin Chye holds  another 18%. Non-Executive Chairman Lee Keen Whye and Company Director and CFO Lim Kay Yi Bernard hold another 2.92%, while primary shareholder Kavita Capital holds 51.3%. You don’t need a calculator to tell you this doesn’t leave much in public hands – less than 10% or GBP 1 million. Continue Reading

East Meets West

It has been eight years since the author of this article was last in Istanbul. In this timeless city, this is not a long time. While many things have changed, most thankfully have not. For us, it is a city of hope, where the secular and the religious world co-exist in peace. In the bustle of a thriving city, one still can hear and heed the call to prayer. Unfortunately, the one constant is of course the traffic. And finally, unlike shipping, the hotels caught on to a weakening dollar 18 months ago and now charge Euros making a visit here much more expensive. Nonetheless it remains one of the world’s most interesting cities.

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