Oh to Be in the Offshore – Songa Offshore Gets Financing

This week Songa Offshore announced that it finalized a new $420 million credit facility, which will be used to finance the delivery of the ultra-deepwater semi-submersible, Songa Eclipse, which is ready for delivery from Jurong. While few loan terms are available, the company did disclose that the repayment profile is 8.5 years.

Written by: marinemoney | Categories: Freshly Minted, The Week in Review | August 25th, 2011 | Add a Comment

A Tanker Saga

On Wednesday, Arne Blystad went to market to raise equity for a new pure play large tanker IPO, Saga Tankers ASA, which will acquire three VLCCs from companies controlled by Blystad with the fourth on subjects. The company is looking to raise $80 million or $120 million in a private placement, however it intends to list the shares on the Oslo Axess in mid-June. For investors, the main attraction will be the full dividend payout model.

Constructed at Daewoo Shipbuilding, two of the VLCCs were built in 2000 with the third in 1995. The two younger vessels were valued at $69 million each, even though one is spot and the other is on time charter through Q3 2012. The 1995 built vessel is valued at $49 million and is employed in the spot market as well. The en bloc price is $187 million, excluding the option vessel, which is financed with the proceeds of the offering, the existing bank debt and an in-kind payment from the seller. The sources and uses of funds, as well as the pro forma percentage ownership is shown in the chart above for both the three and four vessel deals.
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Written by: carisk | Categories: Freshly Minted, The Week in Review | April 22nd, 2010 | Add a Comment

Let Us Get Together

The Korean shipping finance market remains challenging but it is heartening to note one Korean financial institution is thinking out of the box and supporting its core clients. On the second day of Marine Money Asia Week, we had the pleasure to listen to Mr. Dong Hae Lee, Head of Shipping Finance Team at the Korea Development Bank (“KDB”). Mr. Lee told the audience that Korean shipping companies continue to suffer losses from operations which have led to several cases of corporate restructuring and liquidation in the country. But the good news is there are several avenues for Korean owners and operators to strengthen their balance sheets now.

For the big boys, self help is important. Korea Line, Hanjin Shipping, STX Pan Ocean, Hyundai Merchant Marine, SK Shipping and Eukor Car Carriers have raised over KRW 2.93 trillion (USD 2.5 billion) from the domestic capital markets. And if the shipping company has secured Contracts of Affreightment (“COA”) earnings from the big freighters such as POSCO, KOGAS and KEPCO, asset-backed securitization and asset-backed loans can be arranged by the banks to enhance the operator’s liquidity position. In terms of sale and leaseback structures, both KDB and Korea Asset Management Corp (“KAMCO”) have introduced shipping funds to provide further financial support to the shipping industry. Continue Reading

Written by: carisk | Categories: Asia, Bank Debt | October 8th, 2009 | Add a Comment

Half Full or Half Empty?

China has almost single handedly supported the whole dry bulk market despite the world economic gloom. While the BDI marches forward largely due to the tight Capesize tonnage supply, it remains anyone’s guess if this frantic pace of iron ore chartering will continue to last. Will China’s USD 585 billion stimulus package whet the country’s appetite for commodities when infrastructure project spending picks up steam? Or is this just pure stockpiling speculation and a bear market rally?

In the meantime, there are increasing concerns that China’s recovery may come at the expense of inflating asset bubbles, increasing economic volatility and burgeoning bad bank loans. Latest figures showed that China’s new lending doubled to RMB 664.5 billion (USD 97 billion) in May from RMB 318.5 billion a year earlier and industrial output rose by 8.9% year on year. Ma Jun, chief China economist with Deutsche Bank AG in Hong Kong described the pace of bank lending as dangerous but there are also those who beg to differ. In a recent report entitled “The World’s Largest Local Banks, The Largest in the World”, analysts at Taifook Securities believe that the concerns over asset quality deterioration appear exaggerated. The securities house says the current infusion of credit actually eases the liquidity crunch for many medium sized private enterprises, thereby providing an opportunity for highly leveraged sectors, notably property, to restructure their balance sheets. Whatever the case may be, we expect regulators to scrutinize new lending more closely to deter speculation. Continue Reading

Written by: carisk | Categories: Asia, Debt, Equity | June 18th, 2009 | Add a Comment

S&P Market Stays Active: Torm, Top, Excel, Ghandour & Haji-Ioannou

As rumors circulate about Top Tanker’s intentions to purchase Nomikos’ dry bulk fleet, the company announced that its tanker fleet is now officially 100% double hull with the sale of its final single hull tanker, the 29,998 dwt 1989-built M/T Yapi. Speculation has arisen that the company may also consider a third equity issuance to raise cash for its Nomikos acquisition, but no announcements have been made.

Meanwhile, Torm announced the sale of two tankers to an “international buyer” for a total consideration of $61 million. The sale will bring a gain to Torm of $30 million. Tradewinds reports that the tankers have been sold to Polys Haji-Ioannou, who already owns a total of 31 tankers, suggesting that Stelios’ move out of the merchant marine was by no means indicative of the intentions of the rest of the Haji-Ioannou family.

After announcing last week that it had agreed to acquire three panamax bulkers for a sum of $118 million last week, Excel Maritime announced this week that it has agreed to acquire another three panamax bulkers for a sum of $113 million. Proceeds from Excel’s recent $124 million follow-on offering are to go towards both purchases.

Finally, Saudi Arabian-affiliated Lebanese owner Ghassan Ghandour is reported to have placed an order for three additional VLCCs from Daewoo Shipbuilding for as much as $130 million each. This comes after Ghandour had acquired two VLCCs for $270 million from Metrostar at the same time that Euronav had purchased a fleet of five from the same company. Prior to this, Ghandour had already been aggressively building his VLCC fleet through newbuilding orders and promises to be an important player in the global VLCC market for some time to come.

Written by: carisk | Categories: Freshly Minted, The Week in Review | April 7th, 2005 | Add a Comment