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ICON Builds Relationship with MISC
Even as the tanker market outlook remains soft, the market for financial deals in this segment continues on. MISC, the largest tanker operator in Asia Pacific, has just closed on four tanker sale leaseback transactions worth a total USD 167 million with New York based ICON Capital. AET, a subsidiary of MISC, sold two 2002 built VLCCs, Eagle Vermont and Eagle Virginia, to ICON Capital and took the vessels back on bareboat charter for 7 years at an undisclosed rate. Two other 1994 built aframax tankers “Eagle Otome” and “Eagle Subaru” were also sold to ICON on a similar arrangement. In total, the sale and leaseback transaction allowed MISC to book a disposal gain of USD 33 million, which forms a part of the company’s medium and long term fleet rejuvenation strategy through the phasing out of older vessels.
ICON has participated in numerous maritime transactions with shipping companies that include ZIM, Wilh. Wilhelmsen, Teekay and TOP Tankers and this is not its first foray in Asia. Way back in 2008, ICON Leasing Fund Ten and Fund Twelve purchased four double hulled aframax product tankers – Eagle Auriga, Eagle Centaurus, Eagle Carina and Eagle Corona from affiliates of the maritime investment fund Global Skipholding 1 for USD 162.8 million. These vessels were funded with USD 52.8 million in cash and USD 111 million with loan facilities provided by Fortis and DVB Bank. These vessels were “Hell or High Water” bareboat chartered to AET for a term of seven years and will have approximately 5 years of remaining useful life when they come off charter. In 2009, ICON Leasing Fund Twelve purchased a 51% stake in a
300-man accommodation and work barge from Singapore listed offshore marine services provider Swiber Holdings for USD 19.1 million.
Sound Bites
The Hellenic/Norwegian-American Chambers of Commerce 17th Annual Joint Shipping Conference was held on Tuesday. It began with Morgan Stanley’s Fotis Giannakoulis telling us everything we need to know about everything to make a decision in these uncertain markets. But for us it is all about finance, so we provide below some sound bites from the conference:
Swiber Seals Joint Ownership
Singapore based Swiber Holdings (“Swiber”) has demonstrated that with the right asset and out of the box thinking, pockets of liquidity still exist even in the heart of the global financial crisis. On 24 March 2009, US based ICON Capital Corporation (“ICON”) – one of the largest independent, privately held equipment leasing and specialty finance companies in the United States paid Swiber USD 19.125 million for a 51% interest in Victorious LLC, a Marshall Islands incorporated wholly owned subsidiary of Swiber whose sole asset is a 300 men dive support accommodation work barge. R.S. Platou Finans Singapore Pte. Ltd. And LS Finans A.S., Oslo were the advisers to this transaction.
The consideration is calculated based on the unaudited net tangible asset value of Victorious LLC at the time of subscription, being USD 37.5 million. ICON will acquire a senior, controlling equity interest in and all management rights with respect to Victoria while Swiber will provide the barge in exchange for a subordinate non-controlling 49% interest in Victorious. Victorious will also assume USD 5 million of subordinated indebtedness in favour of Swiber that bears interest at the rate of 3.5% per annum. Continue Reading
Sentiment Turns
In a welcome turn of events, the market was resoundingly upbeat this week. The pace of transactions picked up notably across sectors, and we can’t help but view this as a positive sign for the financing market going forward.
On the M&A front Excel and Quintana successfully closed their merger. Each issued and outstanding share of Quintana common stock was converted into the right to receive $13.00 in cash and 0.3979 Excel Class A common shares. The merger creates a combined company that operates a fleet of 47 vessels with a total carrying capacity of approximately 3.7 million DWT and an average age of approximately eight years. Stamatis Molaris stepped into the role of CEO of the combined company, while Hans Mende, Corbin Robertson III and Paul Cornell joined its board of directors. We were happy to hear that the deal was executed smoothly. Moreover, Nordea and the underwriting team were successful in syndicating the debt levels required to make the deal possible – without needing to bring market flex provisions into play.
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