A Sizeable Deal and the Power of the Press – Euronav Facility

It should come as no surprise that while the banks continue to be active, there still remains uncertainty. The banks seem to have capacity but the shipping markets are not cooperating and continued deterioration will continue to make things difficult.  We were reminded of DnB Nor’s Harald Serck-Hansens’s comments at his bank’s conference earlier this year where he highlighted this possibility and encouraged owners to tap the market while they can.

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Solidifying the Balance Sheet

Last week, Nordic Tankers A/S (“Nordic”) announced a 2:1 rights issue of up to 25,176,592 new shares of DKK 10 nominal value at an offering price of DKK 10 per share. The offer has been underwritten to provide minimum proceeds to the company of DKK 167.7 million. If the offering is fully subscribed, Nordic will receive net proceeds of approximately DKK 228.3 million. The new shares will rank parri passu with the existing shares.

In light of the difficult market conditions, the goal of the offering is to strengthen Nordic’s cash reserves, as agreed with its bankers, Nordea and Danish Ship Finance, while improving the company’s equity ratio to 23.1% on the basis of the offer being fully subscribed.  The long-term objective is to attain a minimum 30% equity ratio.
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Euronav & OSG Credit Facility

On Monday, OSG and Euronav jointly announced a $500 million senior secured loan to finance the acquisition of TI Asia and TI Africa, both built in 2002, by joint venture companies equally owned by Euronav and OSG and the conversion of the ships into FSO service vessels. The vessels are scheduled to deliver to Maersk Oil Qatar on the Al Shaheen field offshore Qatar and start operations respectively in July and September 2009.
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Surveying the Credit Markets

Marine Money has concluded the collection of data for its 2008 shipping banker survey and would like to sincerely thank all who have participated. We are currently concluding work on our annual shipping portfolio league table and would like to thank the following banks for their cooperation and contribution to the development of a transparent and well-informed ship finance industry: Bank of Ireland, Bank of Scotland, Bremer Landesbank, Calyon, Commerzbank, Danish Ship Finance, Danske Bank, Deutsche Bank, Deutsche Schiffsbank, DnB NOR, Dresdner Bank, DVB, Helaba, HSH Nordbank, HVB, JP Morgan, KfW, Lloyds TSB, Natixis, Nordea and RBS. If you don’t see your bank’s name on the list, think it belongs there, and haven’t been in touch with us this weekend, please send an email to nhuvane@marinemoney.com ASAP to ensure you are included. Both survey and portfolio data will be released in the upcoming May issue of Marine Money.

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TORM: “ON DAQ”

In Freshly Minted (FM), our weekly online executive summary, of March 7th, our team, lead b y Nicolai Heidenreich, took a look at the board approved listing by D/S Torm (the Danish product tanker and bulk liner owner/operator) of American Depository Receipts (ADRs) to be listed on the NASDAQ in New York at some point in late March or early April.

A road show to follow immediately post-listing in the US to trump-up interest in the shares is to be led by Jefferies. The US listing is designed to attract US and institutional investors, improve the volume trade of the shares and therefore their liquidity and, in doing so, improve the valuation of the company so that it is more on a par with other US listed public shipping equities, notably tanker shares, which, while still cheap by traditional valuation standards – even for “deep cyclicals” – re c e i ve a better valuation in the US than equivalent companies on foreign listings, especially a Copenhagen small-cap. The purpose of this article is to give our readers a reasonable valuation of the company and to discuss the relativ e merits and/or disadvantages of such an ADR listing. Continue Reading