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Safe Bulkers Files for IPO
It’s been awhile since we have seen a Greek dry bulk company file for an IPO in the United States. To us the IPO filing by Safe Bulkers is a comment not only on the robust state of the dry bulk market, but also the perception that the US equity markets are returning to life as a meaningful source of capital for global business.
Very briefly, Safe Bulkers is a dry bulk shipping company owned by Vorini Holdings, which in turn is controlled by Polys and Nicolaos Hajioannou. The company currently owns a fleet of 11 Japanese-built bulk carriers with an aggregate carrying capacity of 887,900 dwt and average age of 2.6 years. The fleet comprises panamax, kamsarmax and post-panamax class vessels. Safe Bulkers has also contracted for eight newbuildings to be delivered between 2008 and 2010, which include four post-panamax vessels, two capesize vessels and two kamsarmax vessels. The vessels are operated on a mix of spot and time charters. Management services will be provided by related party Safety Management.
Merrill Lynch and Credit Suisse are working as bookrunners on the offering, while Jefferies, Dahlman Rose, DnB NOR and Poten Capital will join as underwriters. Safe Bulkers is looking to raise as much as $253 million through the sale of 10,000,000 shares with a 1,500,000 share over-allotment option at a price of $20-$22 per share. The 10,000,000 shares represent a stake of approximately 20% in the company and all proceeds will go to the selling shareholder, Vorini Holdings. Potential IPO buyers are being enticed with a dividend yield of 9-10%.
Safe Bulkers has a wide range of credit facilities in place, but most recently between January and April of 2008, the company took out loans from DnB NOR, HVB and RBS totaling $120 million. All were swapped to fix rates that range from 2.73% to 3.95%.
The Wall Street Journal’s Shipping Analysts Of the Year
For a Wall Street analyst the annual Wall Street Journal Best on the Street rankings is like an AcademyAward, only worth more, certainlyto those investors who bought basis the winning analysts picks.
This year Scott Burk at JPMorgan, but Bear Stearns when his picks were made (JPM acquired Bear Stearns in a sub-prime fire sale last March) came out number one in the Industrial Transportation classification. Doug Mavrinac of Jefferies & Co came in second and Omar Nokta with Dahlman Rose grabbed the third spot.
Double Hull Tankers Follows On
April was certainly the month the shipping equity markets sprang back to life – at least for follow-on offerings. Seaspan (SSW) was out first on April 10 with an offering that raised nearly $240 million, followed by Teekay LNG (TGP) on April 17 with a $165 million offering. Then this week Double Hull Tankers (DHT) saw the positive trend and took the opportunity to position themselves for future acquisitions by raising $84 million with the offering of 8,000,000 shares at $10.50 per share in a deal led by Merrill Lynch and UBS with Dahlman Rose also acting as an underwriter. The offering was upsized by 1,000,000 shares on the back of strong institutional demand, though it priced at a relatively steep discount of 12% to where the shares were trading when the transaction was announced just one day before. The accompanying graph shows how the price performance of SSW, TGP and DHT post offering announcement compare. Continue Reading
Counterpoint!
At times, it is extremely difficult to portray the various perspectives of a transaction, particularly when it is in a public deal for obvious reasons. In light of our article last week, Seaspan’s management wanted to set the record straight and provide their insights into the process and in particular the timing and the rationale for being the first shipping public offering of the year despite the credit crunch.
Spring Awakening (with apologies to the Broadway show)
After being in hibernation or at least in the doldrums, the finance markets are showing signs of activity this week. First out of the blocks, Seaspan gave a double barrel blast. Last Friday, Seaspan announced it had entered into a new term loan facility in the amount of $235.3 million to finance the acquisition of two of its previously acquired 13,100 TEU vessels. The facility was fully underwritten by Sumitomo Mitsui Banking Corporation at a weighted average rate of 0.70% over LIBOR. It is important to emphasize the fact that it was fully underwritten and that the rate, albeit low, was above their historic average weighted cost of below 0.60%. Moreover, Seaspan notes that they now have sufficient credit agreements, with locked-in attractive rates, to fully fund the company’s debt requirements for the entire contracted fleet of 68 vessels while leaving an incremental $550 million in immediate liquidity to capitalize on acquisition opportunities.
CMA-CGM Finds Public Buyers in Marathon
Private equity funds have long had a glamorous reputation as the real movers and shakers in the financial world, buying and selling companies at will and making tremendous returns for their partners and investors. While they are under some pressure now as the easy access to capital they rely upon has been hampered, this was not so in 2006. And it is the 2006 crop of SPACs that is just now coming to maturity, driving the volume of acquisitions by SPACs to $3.9 billion so far this year, more than six times the comparable period in 2007, according to Dealogic.
It was in just this time period, in August 2006 to be precise, that Marathon Acquisition Corp came to the public markets, backed by Michael Gross, a founding partner of private equity powerhouse Apollo. Fast forward to February 2008, however, and Mr. Gross’s SPAC was quickly closing in on its deadline to announce an acquisition target or risk being liquidated. Continue Reading
Following on Quintana’s Success?
Using current phraseology, Aries Maritime Transport Limited (“Aries”) announced last Friday that its Board of directors has retained Merrill Lynch to assist the company in a review to evaluate strategic alternatives to enhance shareholder value. “These alternatives may include, but are not limited to the sale or merger of the company, other strategic transactions, potential capital raises and the continued execution of the company’s operating plan.” Continue Reading
Certainly Not Built of Sand
According to Wikipedia, “a castle is a defensive structure seen as one of the main symbols of the Middle Ages. The term has a history of scholarly debate surrounding its exact meaning, but it is usually regarded as being distinct from the general terms fort or fortress in that it describes a building which serves as a residence of a monarch or noble and commands a specific territory.”
Investors will soon have the opportunity to invest alongside Fortress Investment Group in their commanding intermodal leasing business, as Seacastle Inc. readies itself for its initial public offering. With the assistance of joint bookrunning managers, Citi, Bear Stearns, Deutsche Bank and Merrill Lynch, the company is preparing to sell 20 million shares at a price between $15 and $17 per share. See our Guts of the Deal table (Figure 1) for the main parameters of the transaction.
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