NYK ACQUIRES TAIHEIYO KAIUN

In addition to its double bond issue, NYK has appointed Mitsubishi UFJ Securities to carry out its share swap with financially troubled Taiheiyo Kaiun. On May 28, NYK announced that it will bail out Tokyo listed Taiheiyo through the issuance of new shares and equity-swap arrangements. Taiheiyo is currently an affiliate of NYK and takes pride in managing NYK’s tanker fleet. It was in 2001 when the mega carrier transferred all of its tanker management business to Taiheiyo and took up a nearly 23% stake in the company.

Trouble started when Taiheiyo diversified into the dry bulk sector during the boom. In order to profit from the sky-rocketing charter rates during that time, Taiheiyo chartered in a number of dry bulk vessels and chartered them out at higher rates. This high risk, high return model churned out profits for the company but losses started to accumulate very quickly when the dry bulk market crashed. In October 2008, an unnamed foreign sub-charterer informed Taiheiyo that it was no longer able to fulfill its contractual obligations for four Panamax/Handymax bulk carriers. To make matter worse, less than 5 months later, South Korea’s Samsung Logix filed for receivership in Korea and made clear that likewise unable to honour its charter contracts concerning two Handymax bulkers. Taiheiyo managed to return one of the six vessels to the owner, but it had to continue paying its charter hires for the remaining five vessels and in an effort to stem the losses, Taiheiyo bit the bullet and paid JPT 7.5 billion (USD 78 million) to the owners as cancellation fees. An unfortunate victim caught in between the charter market breakdown, Taiheiyo sold all its five VLCCs to NYK, but even that could not stop the company from bleeding financially. Taiheiyo has projected a net loss of JPY 5,140 million (USD 53 million) for FY2010. As at March 2009, Taiheiyo owned 6 tankers, 1 capesize and 2 wood chip carriers and manages another 20 vessels, mainly tankers from NYK. Continue Reading

Written by: carisk | Categories: Asia, Mergers & Acquisitions, Restructuring | August 13th, 2009 | Add a Comment

Capital Intermodal Sells Capital Intermodal and Xines Fleet of Containers to Textainer Group

The Singapore office of Watson, Farley & Williams LLP (“WFW”) acted for Capital Intermodal Limited and its associated companies (the “Capital Group”) in the sale and transfer of the management rights of Capital Group’s 156,000 twenty-foot equivalent unit of container fleet to Textainer Group Holdings Limited (“Textainer”). The Shipping & Intermodal Investment Management (“SIIM”) team of DVB´s Investment Management division was advising the Capital Group. Continue Reading

Written by: carisk | Categories: Asia, Mergers & Acquisitions | July 16th, 2009 | Add a Comment

Tufton Oceanic Completes First Distressed Portfolio Acquisition…

In the past few months, there has been a lot of talk on whether private equity firms will be able to provide the much needed financing support for the shipping industry. As we understand, a number of private equity firms are in the process of raising money while those who have the cash are still largely sitting on the sideline. We are very pleased to hear that fund management firm Tufton Oceanic has completed full acquisition of Allocean Charters (Singapore) Pte. Ltd. (“ACS”), together with SIF Limited, a private investment vehicle specialising in asset-backed investments.

Tufton says ACS fleet is currently valued at approximately USD 250 million and is comprised of nine anchor handling tug supply vessels, two Aframax tankers, two 1700-TEU containerships and a Supramax bulk carrier. Twelve of the fourteen vessels have long-term charters. The acquisition cost was not revealed. Continue Reading

Written by: carisk | Categories: Asia, Mergers & Acquisitions | July 16th, 2009 | Add a Comment

Pacific Basin Sells Three

Pacific Basin this month publicly disclosed the sale of three handysize vessels built in 2000-2001 for between US$18-19 million per vessel. The aggregate consideration of US$55.6 million was paid entirely in cash. The company notes in a release that the amount was determined with reference to intelligence gathered from shipbrokers in addition to its own analysis of recently concluded sale and purchase transactions of vessels of comparable size and year of build in the market. Continue Reading

Written by: carisk | Categories: Asia, Mergers & Acquisitions | January 29th, 2009 | Add a Comment

Dong Fang in DVB Financed Container Sale

A transaction from last month was announced this week whereby a syndicate of lenders led by DVB Bank financed the “sale and manage-back” of certain containers between the DCM Deutsche Capital Management AG group and Dong Fang International Investment Limited. Continue Reading

Written by: carisk | Categories: Bank Debt, Mergers & Acquisitions | January 29th, 2009 | Add a Comment

PSA in Acquisition in Argentina – Deutsche Advises Roman Group

PSA International, a leading global port operator, and International Port Holdings (“IPH”) a wholly-owned subsidiary of Global Infrastructure Partners (“GIP”), and Roman Group have formed a joint venture for a strategic alliance to further develop International Trade Logistics (“ITL”), a privately-owned business comprising Argentina’s second-largest container terminal and complementary logistics and warehousing businesses.

Deutsche Bank advised the Roman Group.

The privately-owned Argentinean company operates the Exolgan Container Terminal, which is located at Dock Sud in Buenos Aires province.

This is the second deal in the last year between PSA and IPH, which is a subsidiary of private equity fund Global Infrastructur

Written by: carisk | Categories: Freshly Minted, Mergers & Acquisitions | January 31st, 2008 | Add a Comment

First Romance, Then Marriage

In February 2007, the A.P. Moller – Maersk Group (“APM”) entered into a co-operation agreement with Hoegh Autoliners (“HAL”) whereby APM entered its fleet of twelve car carriers into a commercial operation controlled by HAL. Yesterday, the companies took the next step and jointly announced that APM has sold its 18 car carriers, including six newbuildings, to HAL in exchange for a 37.5% shareholding in HAL. The transaction moves APM from being a tonnage provider in the car carrier market to a shareholder in a leading car carrier operator. Leif Hoegh & Co. Limited will retain their position as majority shareholder in the company.

HAL will commercially manage the combined fleet of 67 vessels globally from Oslo and about 30 locations worldwide under the HAL brand. When combined with existing newbuilding orders in place, HAL will grow it carrying capacity by 45% to 85 ships by 2012. HAL started its Ro/Ro car carrier operations in 1969. Its main customers include major manufacturers of new cars, heavy machinery and rolling goods. Last year it carried about 1.9 million car equivalent units.

Written by: carisk | Categories: Freshly Minted, Mergers & Acquisitions | January 31st, 2008 | Add a Comment

Defensive Acquisition with Upside

On Tuesday, just a week after Quintana‘s press release announcing the termination of the sale process, Excel and Quintana jointly announced that Excel had, over the weekend, agreed to acquire Quintana pursuant to a definitive merger agreement whereby Quintana would become a wholly owned subsidiary of Excel. The purchase price will be approximately $2.2 billion (based upon Excel’s closing price of $33.00), including net debt of Quintana and other costs.

Under the terms of the agreement, Quintana shareholders will receive a combination of cash and stock. Each Quintana share will receive $13.00 in cash and 0.4084 shares of Class A common stock in Excel. Based upon Monday’s closing price, the offer represents a total value of $26.48 per share, representing a 57% premium to Quintana’s closing price on that day of $16.89 and a 34% premium to Quintana’s 30-day average price. The agreement provides for a cap of $31.38 based upon an Excel share price of $45.00 as well as price adjustments for dividend payments. Continue Reading

Written by: carisk | Categories: Freshly Minted, Mergers & Acquisitions | January 31st, 2008 | Add a Comment

A.P. Moller Bids for P&O Nedlloyd

In early 2004, it became clear to us that 2005 would be the most active year of consolidation among shipping companies in history. Our belief was underpinned by the fact that shipping companies were generating loads of cash from both operations and the capital markets, the fundamentals for the shipping industry looked set to remain strong and shipyards were operating at or near full capacity. So, armed with loads of cash and good prospects, it is natural to expect that companies would look to reap operational and financial synergies and leverage through growth, and that that growth would come in the form of corporate deals rather than single vessel purchases. And that is exactly what has happened in virtually every sector of the international shipping industry.

The Biggest Gets Bigger

In the latest and most dramatic example of this phenomenon, A.P. Moller-Maersk launched a takeover bid this week for 100% of the shares in Royal P&O Nedlloyd in the largest container shipping M&A deal ever. The takeover bid values P&O at Euro 57 per share, which represents a 41% premium to the then-current price and a 45% premium to the price over the last six months. The bid is also a whopping 130% over the rights issue price on the deal that received Marine Money’s Deal of the Year Award this year and values the company at 1.6x FY05E. Although we expect Royal P&O Nedlloyd shareholders and P&O shareholders, who own 25% of Royal P&O Nedlloyd, to vote in favor the deal, the European Commission may require Maersk to sell off certain routes in order to consummate the deal legally, which could in turn spark a series of smaller M&A deals.

Randy Sesson at Goldman Sachs is representing A.P. Moller on the transaction, JP Morgan is representing Royal P&O Nedlloyd and Citigroup is representing P&O.

Valuation Metrics – AP Moller Set to Get P&O for Free

The transaction is an important one for both AP Moller and the container market in general. As you can see from the graph on the first page, the deal solidifies AP Moller’s position as the world’s largest carrier by taking out the number 3 player and propelling itself to a size that is set to be more than double that of its next largest competitor. On the industry level, the good news is that it shows APM’s bullishness about the outlook for the market, even despite the enormous post-panamax containership order book and some gloomy forecasts by analysts. The loss of P&O from the Grand Alliance will have a negative impact on fellow members NYK, OOCL and Hapag-Lloyd, as Grand Alliance has historically been an effective competitor to Maersk although we can hope that the rationalization of tonnage might ultimately help lessen the blows of looming overcapacity. In a research note, Citigroup container shipping analyst Charles de Trenck said he thinks the deal might raise the ante for other container lines, perhaps suprring NOL to acquire Wan Hai Lines, which has loads of ships on order. De Trenck also surmises that Evergreen could potentially be hurt, so we would expect this transaction to cause a spate of mergers and acquisitions.

Like any truly good M&A deal, this one is beneficial to everyone involved. Shareholders in Royal P&O Nedlloyd get a great valuation for their shares at a time when many think the market might start to weaken. If they want to remain exposed to the industry, they can use their tender proceeds to buy shares in AP Moller. And for AP Moller, the deal is fantastic. With synergies of around $350 million and AP Moller’s P/E valuation of 10x, the company’s share price should increase by the entire purchase price of the new company. Adding in the $400 million of earnings that Royal P&O Nedlloyd is expected to generate in 2005 will bring the number to $4 billion. Put another way, one could make the argument that AP Moller is getting Royal P&O Nedlloyd company for free!

Written by: carisk | Categories: Freshly Minted, Mergers & Acquisitions | May 12th, 2005 | Add a Comment

Eastwind & Marine Capital Pick Up Georgia’s OSCo Fleet

The Eastwind Group of New York and Marine Capital of London announced today that they have reached agreement with the Ministry of Economic Development of Georgia for their acquisition of Ocean Shipping Company, following a recently-concluded competitive bidding process. OSCo, the Georgian state shipping company, owns a fleet of 15 product tankers ranging in size from 16,000 to 35,000 DWT and in year of build from 1981 to 2004. The ships have been trading primarily in the Atlantic Ocean and the Baltic and Mediterranean Seas.

Eastwind is an owner and operator of 70 vessels, including product tankers, dry bulk carriers and refrigerated ships. Marine Capital is a well-known shipping investment company and was the originator of the transaction.

“We have been working on this transaction for a few months and are very pleased to have secured the deal despite keen competition,” said Tony Foster, managing director of Marine Capital. “We are delighted to be in partnership with the Eastwind Group. I believe we were successful because of the strength of our investor group and the imaginative financing provided by Bank of Scotland. I want to emphasize that the Georgian government has dealt with us constructively and professionally throughout the process.”

“The OSCo fleet will greatly strengthen us in an attractive sector of the shipping market, where we expect continued growth and development for our company,” said Don Simmons, managing director of Eastwind. “Although the transaction represents an outright privatization by the Georgian government, we will retain strong links to the country through our acquisition of OSCo’s crewing operations. In addition to their continued manning of the OSCo fleet, we also expect to introduce Georgian seafarers on a number of our other vessels.”

It is understood that the new owners plan to retain Columbia Shipmanagement to operate the OSCo vessels.

Written by: carisk | Categories: Freshly Minted, Mergers & Acquisitions | March 31st, 2005 | Add a Comment