Following quickly on the heels of Seanergy’s proposed special meeting to vote on its acquisition, Energy Infrastructure Acquisition Corp. (“EII”), another blank check company, set July 17 for its special shareholder meeting. As was done last week in the case of Seanergy, we will take a close look at what the shareholders are being asked to approve.
In July 2006, EII consummated its initial public offering of 20.25 million units, each unit consisting of one share of common stock and one warrant, raising $209.25 million in net proceeds (including a portion of the green shoe). Prior to the offering, George Sagredos, the President and COO, purchased through Energy Corporation 825,398 units at the offering price resulting in gross proceeds of approximately $8.25 million.
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While shipping bankers in Norway at Marine Money’s Oslo event were expressing concern that bank funds should not automatically be counted upon in the current environment, Kiran Holding held a Gala Dinner celebration in Istanbul on Tuesday, 27 May 2008. Some 70 people attended. Guests enjoyed a cruise along the Bosphorus up to the trendy waterfront A’jia Restaurant on the Asia side, where banking support of shipping was very much in evidence. As we reported in FM last week, Kiran Holding signed one of the biggest syndicated loan deals in the history of the Turkish maritime sector, securing a $440 million facility with a most impressive syndicate of banks including: Bank of Tokyo-Mitsubishi UFJ, Calyon, Emirates Bank, HSBC, ING, Lloyds TSB, MashreqBank, Royal Bank of Scotland, Deutsche Shiffsbank Dekabank Deutsche Girozentrale, and Fortis Bank. Eurofin also acted as advisor to Kiran Holding.
According to Kiran Holding Vice President Tamer Kıran, the loan will be used to re-finance the Kiran Asya, a 2005 built 66,000-dwt vessel, and the 29,000-dwt Zeynep Kiran, which was built in 2001. The remainder of the loan will be used to cover the expenses of six newbuildings the Group has ordered from shipyards in China. The loan also provides $100 million in performance guarantees.
Commenting to the gathering of bankers and friends, Kiran Holding Vice President Mr. Tamer Kiran, “I would like to thank [our banks], which have all trusted both in us and our project and participated in this magnificent deal. A deal which proves that even under the current difficult credit conditions of the industry, good projects of good companies can still be financed by committed shipping banks.”
Mr. Lambros Varnavides, Managing Director, The Royal Bank of Scotland Plc, who could have been speaking for all the banks, stated, ” Kiran Holdings is set to be one of the biggest Turkish shipping powerhouses”
Marine Money notes with fondness the age-old story of the company’s origins, a story that can be seen in the best shipping companies all over the world, and that even at a moment of corporate achievement need not be forgotten.
Turgut Kiran, Honorary Chairman, told the audience, “My father was a much loved and highly esteemed mariner. Having lost him at a young age, I grew up listening to stories about him. Perhaps, this is why I was drawn to the marine world. Our children have learned the business well. We started in 1959 with 2-3 people and today we have 1,500 employed”
The theme is important to shipping worldwide as it evolves for the future. Mr. Kiran added, “Kiran Holding has always been committed to modern corporate values; with its strong determination of moving forward and achieving the best at all times and under all circumstances. Our foremost purpose is to create a more institutional, professional and higher level grounds for future generations as one of the leading brands in the Turkish marine sector.”
Fortis Bank analyst Dan Barrett, for one, is still interested in tanker equities. He issued a report this week initiating Arlington Tankers with a Buy rating and a $25 price target. He believes that the tanker market will ease from current levels but remain strong throughout 2005, not returning to mid-cycle levels until 2006. As for Arlington in particular, the report is confident in the company’s modern fleet and long-term contracts, while Mr. Barrett is positive on the company’s estimated 2005 yield of 10.8%.
Jefferies analysts Magnus Fyhr and Douglas Mavrinac this week raised their price target on Nordic American Tanker Shipping to $46, but are maintaining a rating of Hold. The analysts believe tanker demand is firming on increasing OPEC production, but are also lowering 2005 EPS estimates for NATS due to 1Q05 results that were below expectations on non-cash G&A expenses.
Fortis Reports on Offshore Sector,
Initiates Seacor and Hornbeck with BUY Rating
If you’ve ever wanted to know more about the offshore supply boat sector but didn’t know how to look, we highly recommend Fortis Bank’s newly issued reports, which give an overview of the sector and initiate coverage on Seacor Holdings and Hornbeck Offshore Services. Despite noting the sector’s history of being “plagued by over-capacity, low barriers to entry, and commoditized pricing,” analyst Dan Barrett is bullish on the short-term prospects for the sector, expecting to see a number of supply boat companies exceed consensus expectations over the next few quarters.
Mr. Barrett expects that supply will outstrip demand in the sector over the next 12-18 months, but is not shy about his belief that a rising tide will not lift all boats. He expects the market for new generation and deep-water capable boats to be quite strong, with utilization rates likely climbing from the 85-90% range to the mid 90s and day rates hitting record levels. Meanwhile, utilization rates for older boats with more limited capabilities will rise only along the margin.
In the Sector Note issued by Fortis, Mr. Barrett first discusses in detail the primary types of boats involved in the sector – Anchor Handling Towing Supply, Offshore Supply Vessels, Crew Boats and Standby/Rescue Vessels, among others – and the key global offshore basins – the Gulf of Mexico, the North Sea, West Africa, Asia – Pacific, the Middle East, Brazil, and the rest of Latin America. He gives an overview of the rate tendencies and contract types that prevail in the various vessel-types and regions that gives substance to his discussions of company strengths and weaknesses and supply/demand forecasts later in the report. Additionally, he notes that the Jones Act that protects the US market is, in the opinion of Fortis, not material to the industry due to the state of decline of oilfield activity in the Gulf of Mexico.
In the demand arena, Mr. Barrett identifies four key issues: the number of manned platforms/production facilities that need fuel, food, or drilling supplies (the floating vs. fixed factor is also important here), the number of active offshore drilling rigs, day rates for drilling rigs, and the level of offshore construction activity. Based on these, he anticipates a combined incremental increase in demand of 180 AHTS and OSVs in 2005 and 146 of these vessels in 2006. A t the same time, he expects delivery of only 155 AHTS and OSVs in 2005, which certainly indicates improving fundamentals, not even accounting for the scrapping variable.
A Rising Tide May Not Lift All Boats
Mr. Barrett, however, does not believe that this improving market will bring egalitarian benefit to all, but rather result in definite winners and losers. He looks for companies with a strong balance sheet, geographic diversity and, most importantly, large numbers and percentages of next generation and deep-water capable vessels in their fleets. As support for this stance, he points to the difference in utilization rates between Hornbeck’s largely new generation, deep-water capable Gulf of Mexico fleet and Trico Marine’s older less capable fleet in the same area from 1999 to 2004. Hornbeck’s vessels enjoyed utilization rates that were on average 34% higher than Trico’s and commanded dayrates that were more than $5,000 higher. Further emphasizing this statement is the report’s assertion that “each new boat built should win work at the expense of an older boat.” While these differences to vary based on location and particular employment, the overall message is pronounced.
So who will bear the brunt of the market upturn? Fortis Bank initiated coverage with a BUY rating on both Seacor Holdings and Hornbeck Offshore Services. Target prices are set at $71.00 for Seacor and $33.00 for Hornbeck, as against closing prices of $59.30 and $23.98, respectively, on February 16. Dan Barrett explained that Seacor merits its rating by being a leading supply boat company that is also growing its aviation and barge businesses while Hornbeck demonstrates superior margins, growth and returns. Nevertheless, both companies are currently valued well below the peer average. Mr. Barrett’s price target for both companies is based on 11.5x EV/EBITDA, still an 11% discount to drilling peers.
If you’ve ever wanted to know more about the offshore supply boat sector but didn’t know how to look, we highly recommend Fortis Bank’s newly issued reports, which give an overview of the sector and initiate coverage on Seacor Holdings and Hornbeck Offshore Services. Despite noting the sector’s history of being “plagued by over-capacity, low barriers to entry, and commoditized pricing,” analyst Dan Barrett is bullish on the short-term prospects for the sector, expecting to see a number of supply boat companies exceed consensus expectations over the next few quarters.
Mr. Barrett expects that supply will outstrip demand in the sector over the next 12-18 months, but is not shy about his belief that a rising tide will not lift all boats. He expects the market for new generation and deep-water capable boats to be quite strong, with utilization rates likely climbing from the 85-90% range to the mid 90s and day rates hitting record levels. Meanwhile, utilization rates for older boats with more limited capabilities will rise only along the margin.
In the Sector Note issued by Fortis, Mr. Barrett first discusses in detail the primary types of boats involved in the sector – Anchor Handling Towing Supply, Offshore Supply Vessels, Crew Boats and Standby/Rescue Vessels, among others – and the key global offshore basins – the Gulf of Mexico, the North Sea, West Africa, Asia – Pacific, the Middle East, Brazil, and the rest of Latin America. He gives an overview of the rate tendencies and contract types that prevail in the various vessel-types and regions that gives substance to his discussions of company strengths and weaknesses and supply/demand forecasts later in the report. Additionally, he notes that the Jones Act that protects the US market is, in the opinion of Fortis, not material to the industry due to the state of decline of oilfield activity in the Gulf of Mexico.
In the demand arena, Mr. Barrett identifies four key issues: the number of manned platforms/production facilities that need fuel, food, or drilling supplies (the floating vs. fixed factor is also important here), the number of active offshore drilling rigs, day rates for drilling rigs, and the level of offshore construction activity. Based on these, he anticipates a combined incremental increase in demand of 180 AHTS and OSVs in 2005 and 146 of these vessels in 2006. A t the same time, he expects delivery of only 155 AHTS and OSVs in 2005, which certainly indicates improving fundamentals, not even accounting for the scrapping variable.
A Rising Tide May Not Lift All Boats
Mr. Barrett, however, does not believe that this improving market will bring egalitarian benefit to all, but rather result in definite winners and losers. He looks for companies with a strong balance sheet, geographic diversity and, most importantly, large numbers and percentages of next generation and deep-water capable vessels in their fleets. As support for this stance, he points to the difference in utilization rates between Hornbeck’s largely new generation, deep-water capable Gulf of Mexico fleet and Trico Marine’s older less capable fleet in the same area from 1999 to 2004. Hornbeck’s vessels enjoyed utilization rates that were on average 34% higher than Trico’s and commanded dayrates that were more than $5,000 higher. Further emphasizing this statement is the report’s assertion that “each new boat built should win work at the expense of an older boat.” While these differences to vary based on location and particular employment, the overall message is pronounced.
So who will bear the brunt of the market upturn? Fortis Bank initiated coverage with a BUY rating on both Seacor Holdings and Hornbeck Offshore Services. Target prices are set at $71.00 for Seacor and $33.00 for Hornbeck, as against closing prices of $59.30 and $23.98, respectively, on February 16. Dan Barrett explained that Seacor merits its rating by being a leading supply boat company that is also growing its aviation and barge businesses while Hornbeck demonstrates superior margins, growth and returns. Nevertheless, both companies are currently valued well below the peer average. Mr. Barrett’s price target for both companies is based on 11.5x EV/EBITDA, still an 11% discount to drilling peers.
Written by:
carisk | Categories:
Freshly Minted,
Market Commentary | February 17th, 2005 |
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Ship Finance Launches New $1.2B Refinance Facility at 70 Points
Ship Finance International launched its $1.2 billion refinancing facility last Thursday afternoon at a favorable 70 points over Libor. DnB NOR, which has been negotiating with the company since the summer, was mandated the facility agent. Calyon, Fortis Bank and Nordea are the lead arrangers and we expect the same banks in the original facility to take a piece of the new one that should close pretty soon given the interest in the deal.
Ship Finance International launched its $1.2 billion refinancing facility last Thursday afternoon at a favorable 70 points over Libor. DnB NOR, which has been negotiating with the company since the summer, was mandated the facility agent. Calyon, Fortis Bank and Nordea are the lead arrangers and we expect the same banks in the original facility to take a piece of the new one that should close pretty soon given the interest in the deal.
Written by:
carisk | Categories:
Debt,
Freshly Minted | January 13th, 2005 |
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