China Shipping Nauticgreen Shelves USD 192 million IPO

World stock markets around the globe continue to fall sharply since Standard & Poor’s downgraded American debt for the first time in history last Friday, as fears that the twin debt crises in the US and Europe could drive the world economy into recession continue to shake investors’ confidence. Others believe that the markets are over-reacting and have accused large individual investors of “coordinated short-selling attacks” and preying on fragile market sentiments, which have prompted some countries to look into implementing a total ban on naked short selling, in order to stabilize the stock markets.

Without surprise, the market volatility has forced several IPO issuers to delay or drop plans to raise equity. China Shipping Nauticgreen, the container leasing unit of state-owned China Shipping Group, has postponed its plans to raise up to HKD 1.5 billion (USD 192 million) in Hong Kong, until market conditions improve. This decision was made despite the fact that the appointed bookrunners, China Merchants Securities and Deutsche Bank, were able to sell the entire institutional tranche after two days of book-building that began on August 1. Continue Reading

Bumi Armada Completes Mega USD 880 million IPO

The jittery market environment might have forced the withdrawal of several IPOs around the world in the recent weeks, but Bumi Armada’s successful equity raising has shown that there is still strong investor appetite for companies with exciting long term prospects. The Malaysian oil and gas services company and its existing shareholders raised RM 2.66 billion (USD 879 million) this week, making the offering the second largest in Southeast Asia this year after  Hutchison Port Holdings Trust. For further details, see the Guts of the Deal below.

According to the local media, the total demand for the institutional offering far exceeded supply by 40 times, resulting in the shares being priced at the upper half of its indicative price range at RM 3.03 (USD 1) a piece, or 19 times the company’s earnings in 2010. The retail tranche (excluding the employee offering of 21 million shares) was also oversubscribed by 9.5 times, which suggests that investors remain optimistic on the outlook of the oil and gas sector. Taking into account that 26.7% of the deal was actually made up secondary shares sold by existing shareholders, the company filled its coffers by a lesser amount of RM 1.852 billion (USD 612.7 million), that will go towards the repayment of existing bank debt and fund capital expenditure and working capital requirements. RM 775 million (USD 256 million) has been earmarked to repay unsecured revolving credits and bridging loans within six months, which this will provide the company interest savings of RM 24 million and a lower gearing ratio from 2.75 to below 1.  Continue Reading

Far East Horizon Unmasks Ship Leasing Ambition

Large public listings are usually accompanied by great fanfare, but one particular company with huge ambition to become a significant capital provider to the shipping industry evaded our radar and concluded its low profile IPO in March. When Far Eastern Horizon (“FEH”), the financial leasing unit owned by the Sinochem Group went on its roadshow for its Hong Kong listing, investors were quick to place enough orders to cover the entire book.

Investors clearly liked FEH’s pedigree parentage. Not only was the controlling shareholder one of the largest state-owned conglomerates in China and a Global Fortune 500 corporation, three other strategic and reputable investors – KKR Future Investments (an affiliate of KKR Asian Fund), Techlink (an affiliate of Government of Singapore Investment Corporation) and TML (an affiliate of CICC Fund) were already significant shareholders in the company prior to the IPO. The three parties had ploughed in USD 160 million in FEH in September 2009 and their investments added weight to the company’s credentials. Six cornerstone investors Sun Hung Kai Properties, Value Partners, Hillhouse Capital, Prime Capital, Owl Greek Asset Management and OZ Management Fund committed a total of USD 250 million to the offering, accounting for 38% of the total deal size. Continue Reading

Uni-Asia Launches USD 25 million Rights Issue

Singapore listed Uni-Asia Finance Corporation has proposed a one for two renounceable non-underwritten rights issue of 156,597,600 new ordinary shares at an issue price of SGD 0.20 (USD 0.16) for each rights share. The offering is expected to raise SGD 30.9 million (USD 24.9 million) for the structured finance arranger and alternative-asset investor and proceeds will be used to invest primarily in ships and real estate assets. The issue price of SGD 0.20 is a 20% discount to the closing price of the last trading day before the announcement was made. The rights shares will, upon allotment and issue, rank pari passu in all respects with all other existing shares.

Key shareholders Yamasa Co., Ltd (“Yamasa”), Evergreen International S.A. (“Evergreen”), and Founders Corporation (“Founders”), who collectively hold approximately 33.32% of the total issued shares, have all irrevocably undertaken to subscribe and pay for all their entitlements of the rights shares. In addition, Yamasa has also agreed to purchase additional unsubscribed rights shares. Under the take-over code in Singapore, a whitewash wavier will however be required from other existing shareholders, should Yamasa choose to increase its shareholding in Uni-Asia from the current 19.53% to any level over 30% and not extend a general take-over offer for all the remaining shares. Provenance Capital is the appointed manager for Uni-Asia’s non-underwritten rights issue. Continue Reading

Raising Money in Asia – The Odfjell Way

Chemical tanker operators have largely posted lacklustre 2010 results amid a very challenging operating environment plagued by over capacity. But despite this, Odfjell’s lenders and financial partners have maintained their faith and support in the company’s business model and strategy. Marine Money speaks to President and CEO Jan Hammer and Vice President – Finance & Investment Sylvia Low on the challenges faced by the Norwegian chemical carrier and terminal operator and its success in tapping financing in Asia.

With a fleet of about 86 owned and chartered chemical tankers and interests in 9 tank terminals at strategic locations around the world, Odfjell is a leading player in the global market for transportation and storage of chemical and other speciality bulk liquids. Odfjell has been consistently delivering positive cash flow in the last ten years prior to 2010, but the company ran into losses in 2010 due to continued weakness in shipping activity and capacity glut. Coupled with impairment costs and taxes, Odfjell recorded a loss of USD 79 million in 2010, compared to a profit of USD 121 million in 2009.   Continue Reading

Courage Marine Still Wants HK listing

Taiwanese dry bulk operator Courage Marine is also seeking a listing without raising any new equity. The company dropped earlier plans to issue new shares at no less than 10% discount to its shares listed on the Singapore Exchange, citing “unfavourable prevailing market sentiments and conditions”. Instead, the company is listing its entire issued capital on the Hong Kong Stock Exchange via an introduction listing, where no new shares will be offered. In February, the company appointed Haitong International Capital for the listing of up to 27.6 million additional new shares and the proceeds were initially earmarked for the purchase of a second-hand Capesize or Panamax dry bulk vessel.

BLT Subsidiary Launches USD 147 million IPO

Investor sentiments worldwide may be jittery but this has not dampened Berlian Laju Tanker (“BLT”)’s ambition to list its subsidiary Buana Listya Tama on the Indonesia Stock Exchange. Right after the completion of a USD 93.5 million sale & leaseback agreement with Standard Chartered in March and a USD 685 million refinancing package with six lenders (DnB NOR, Nordea, Standard Chartered, ING, NIBC and BNP Paribas), the chemical tanker owner and operator is now setting its sights to enhance its liquidity position even further by selling up to 7.26 billion new shares or close to 40% of the enlarged share capital in its wholly owned subsidiary Buana Listya.

The objectives for the spin-off are straight-forward. By itself, BLT is already a listed company on the Indonesia Stock Exchange and Singapore Exchange, and the listing of its subsidiary Buana Listya will give the group financial flexibility and the access to the capital markets for debt and equity funding via two separate listed entities. The spin-off will also allow the group to
streamline its operations and better position itself for the domestic and international markets. BLT will focus its resources on growing its business as a provider of global seaborne transportation of liquid cargoes mainly the chemical sector (other than Indonesia) while Buana Listya will focus primarily on energy related shipping services serving the oil, gas, FPSO and FSO and chemical sectors throughout Indonesia. And this clear mandate to expand business within Indonesia is exactly what makes Buana Listya an attractive investment. Continue Reading

ICON Builds Relationship with MISC

Even as the tanker market outlook remains soft, the market for financial deals in this segment continues on. MISC, the largest tanker operator in Asia Pacific, has just closed on four tanker sale leaseback transactions worth a total USD 167 million with New York based ICON Capital. AET, a subsidiary of MISC, sold two 2002 built VLCCs, Eagle Vermont and Eagle Virginia, to ICON Capital and took the vessels back on bareboat charter for 7 years at an undisclosed rate. Two other 1994 built aframax tankers “Eagle Otome” and “Eagle Subaru” were also sold to ICON on a similar arrangement. In total, the sale and leaseback transaction allowed MISC to book a disposal gain of USD 33 million, which forms a part of the company’s medium and long term fleet rejuvenation strategy through the phasing out of older vessels.

ICON has participated in numerous maritime transactions with shipping companies that include ZIM, Wilh. Wilhelmsen, Teekay and TOP Tankers and this is not its first foray in Asia. Way back in 2008, ICON Leasing Fund Ten and Fund Twelve purchased four double hulled aframax product tankers – Eagle Auriga, Eagle Centaurus, Eagle Carina and Eagle Corona from affiliates of the maritime investment fund Global Skipholding 1 for USD 162.8 million. These vessels were funded with USD 52.8 million in cash and USD 111 million with loan facilities provided by Fortis and DVB Bank.  These vessels were “Hell or High Water” bareboat chartered to AET for a term of seven years and will have approximately 5 years of remaining useful life when they come off charter. In 2009, ICON Leasing Fund Twelve purchased a 51% stake in a
300-man accommodation and work barge from Singapore listed offshore marine services provider Swiber Holdings for USD 19.1 million.

Full Steam Ahead!

It is not exaggerating to say that investors are infatuated with Hong Kong Tycoon Li Ka-shing. In 2000, hundreds of thousands of people queued outside banks hoping to cash in on the Internet mania generated by the offer of shares in his Tom.com venture. Fast forward to today and you will read that the institutional book of his USD 5.8 billion business trust in Singapore, Hutchison Port Holdings (HPH) Trust, is also oversubscribed by strong demand. Perhaps this has to do with his philosophy in making sure that money is always left on the tables for his business partners.

In a Fortune magazine article years ago, Mr. Li was quoted advising his sons in the following fashion: When you enter into a partnership with somebody and you expect to make a dollar and your partner expects to make a dollar, too, then when the deal is over, why don’t you just take 80 cents? And if you take 80 cents, maybe he will offer you 90 cents, and you still have a good partnership. But even if he doesn’t offer you 90 cents and you take your 80 cents, that’s okay. But never, never should you try to take $1.10. If you follow my advice, he told his sons, you will never lack partners.  Continue Reading

China Shipbuilding Industry Co Rolls Out RMB 17.46 billion Private Placement

China Shipbuilding Industry Co will be carrying out a RMB 17.46 billion (USD 2.6 billion) private placement to fund the acquisition of four shipbuilding companies. The Shanghai listed subsidiary of state-owned shipbuilding conglomerate China Shipbuilding Industry Corporation (“CSIC”) will be placing out 2.52 billion new shares at RMB 6.93 (USD 1.05) a piece to seven companies including its parent.

CSIC and two of its wholly owned flagship subsidiaries Dalian Shipbuilding Industry Group and Bohai Shipbuilding Group as well as China Huarong Asset Management Corporation, China Construction Bank, China Development Bank Capital and China Orient Asset Management Corporation have agreed to swap their combined majority stakes in four of CSIC’s shipyards, namely 100% of Dalian Shipbuilding Industry Corporation, 100% of Bohai Shipbuilding Heavy Industry, 100% of Shanhaiguan Shipbuilding Industry and 94.85% of Qingdao Beihai Shipbuilding Heavy Industry, for shares in China Shipbuilding Industry Co (see accompanying chart). Valued at around RMB 17.44 billion (USD 2.6 billion), the injection of assets is part of CSIC’s on-going efforts to create a listed flagship vehicle, which will also equip China Shipbuilding Industry Co the ability to offer a complete suite of products including shipbuilding, ship repairing, ship conversion and the manufacturing of warship equipment. Continue Reading