Fearnley Finans and Lorentzen & Stemoco Launch $176 Million K/S Deal with Bergesen

Fueled by loads of liquidity and a desire among many investors to use strong Kroners to make deals in cheap dollars, Norwegian K/S arranger Fearnley Finans together with Lorentzen & Stemoco launched this week with Bergesen the largest deal to come to the market. The deal is for the acquisition of four medium-sized LPG tankers currently trading in the Exmar Midsize pool. The new company, Edda Gas K/S, will acquire two of the ships from Bibby Line and the other two from Bergesen. The project price is $176.2 with $50.2 million in paid in capital and $30 million in uncalled capital. Bergesen has already committed 45-49% of the capital, while commercial banks will provide mortgage financing of $126 million. It is estimated he deal will achieve an IRR on 15 years of 15%. The deal is an excellent opportunity for Bergesen to reduce its risk in this market and benefit from premium asset prices while it also represents an growing interest from the larger shipping companies to use the K/S market for sale-lease back deals.

Written by: carisk | Categories: Freshly Minted, Leasing | March 17th, 2005 | Add a Comment

MC Shipping In Sale/Leaseback on Bergesen LPG Ships

The progress that CEO Tony Crawford has made at MC Shipping over the last few months has been nothing short of remarkable. In that time, the once dormant Amex-listed company has shown a burst of energy and ambition with the sale of its older container ships, the recapitalization of its balance sheet, the streamlining of its shareholding structure, the buy back of its bonds, the expansion of its banking relationship and a sharp focus on the white-hot LPG sector. Not surprisingly, MC’s share price has soared 167%, from $3 to $8, over the course of the restructuring.

In the company’s latest move, MC announced late last week that it had acquired two very large LPG vessels from Bergesen. MC paid $83 million for the 75,000 cubic Berge Flanders (1991) and 77,000 cubic Berge Kobe (1987) and leased the ships back to Bergesen for five years. Although this deal is largely an equity financing (the success of which will hinge on residual values when the ships are redelivered) and could have been done in the KS market, it demonstrates MC’s ambition to be a leading player in one of the hottest sectors of shipping. Including the new ships, MC Shipping owns a fleet of nine LPG vessels, including three VLGC’s and six smaller vessels ranging from 3,000 to 77,000 cubic meters in capacity. MC also retains an investment in four container ships as well as two small sea-river vessels.

The progress that CEO Tony Crawford has made at MC Shipping over the last few months has been nothing short of remarkable. In that time, the once dormant Amex-listed company has shown a burst of energy and ambition with the sale of its older container ships, the recapitalization of its balance sheet, the streamlining of its shareholding structure, the buy back of its bonds, the expansion of its banking relationship and a sharp focus on the white-hot LPG sector. Not surprisingly, MC’s share price has soared 167%, from $3 to $8, over the course of the restructuring.

In the company’s latest move, MC announced late last week that it had acquired two very large LPG vessels from Bergesen. MC paid $83 million for the 75,000 cubic Berge Flanders (1991) and 77,000 cubic Berge Kobe (1987) and leased the ships back to Bergesen for five years. Although this deal is largely an equity financing (the success of which will hinge on residual values when the ships are redelivered) and could have been done in the KS market, it demonstrates MC’s ambition to be a leading player in one of the hottest sectors of shipping. Including the new ships, MC Shipping owns a fleet of nine LPG vessels, including three VLGC’s and six smaller vessels ranging from 3,000 to 77,000 cubic meters in capacity. MC also retains an investment in four container ships as well as two small sea-river vessels.

Written by: carisk | Categories: Freshly Minted, Leasing | March 3rd, 2005 | Add a Comment

THE WORLDWIDE/BERGESEN DEAL

By Urs M Dür

This deal overall should not have come as a big surprise to anyone. It’s likely-hood was printed here and elsewhere since Worldwide’s Helmut Sohmen controlled accounts (Tauro) announced, by Oslo Boers rules, control of over 10% of the company last year. The rumour that the Bergesen and Sundt families were interested in getting out of the business was prevalent. Bergesen is going through a large transition at the executive level. There are operational synergies between the two entities and both entities have top staff.. .amongst the best The combined company will be one of the most diversified large shipping companies in the world. This match, on the surface of our preliminary analysis, made sense, we explain below.

How? Many query why would one sell a great revenue generator for the cash alone? (“The Chicken for the sake of the eggs.” as one put it or “the bathwater for the baby” said another”.) Many say that the price achieved, while better than the general historical performance of the shares, was not unprecedented. We take a look at some of these elements below.

A Norwegian national icon is today no longer Norwegian. ‘Tis a big event. As one New York based pundit told this writer, “it reminds me of when the Japanese bought Rockefeller Center”.

Written by: carisk | Categories: Marine Money | May 1st, 2003 | Add a Comment

Deal of the Year – 2002 M&A and Joint Ventures

In shipping charter parties, a good broker makes both parties feel that they have won the negotiation, while it is likely that both have yielded more than they would have at the start. In shipping M&A brokers and advisors too are involved, but, unless the deal is an obvious one between friendly parties, this “good broker” dynamic is often lost because the deals are done in a public forum.

2002 was a down year in shipping in general and while there were some notable successes this year, see below, just as notable was the abundance of big merger ideas that did not come to fruition. Think about what did not happen in 2002 (so far):

Royal Caribbean/P&O Princess/Carnival saga.

Torm/Norden

AET and MISC/General Maritime/Teekay?

SCI Privatization and ???

Bergesen/Worldwide

Golar’s rumoured sale

Rumoured merger of PSA and NOL

The list goes on…

Written by: carisk | Categories: Uncategorized | January 1st, 2003 | Add a Comment

Deal of the Year – 2002 Bank Debt

Determining the bank debt deal of the year is usually the most challenging of all the awards we give. Of the hundreds of revolvers, term loans and refinancing totaling about $40bn done for the shipping industry each year, it is generally very difficult to determine a winner – but this year it was easy.

This year’s Bank Debt Deal of Year award goes to Citigroup, the Korea Development Bank and the Korea Exchange Bank for the $1.05bn facility that they arranged to finance Wallenius Wilhelmsen’s (WW) acquisition of Hyundai Merchant Marine (HMM)’s car carrier business, including the term charters with Hyundai Motors and Kia Motors (HMC/KMC). The NewCo, known as “Korea Ro-Ro”, is to be jointly owned by Wallenius 40%, Wilhelmsen 40% and HMC/KMC 20%.

There were several things we liked about this deal. Perhaps more impressive that its sheer size was the fact that it attracted more funding from foreign lenders than any previous Korean leveraged deal. This Norwegian/Korean transaction was also extremely complex, requiring securitization of cash flow streams into three tranches with multiple security packages and pricing.

Written by: carisk | Categories: Uncategorized | January 1st, 2003 | Add a Comment

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.

Written by: carisk | Categories: Company News | May 1st, 2002 | Add a Comment