December 2, 1999

LAZARD SHUFFLE

Veteran shipping investment banker Hamish Norton left Lazard Freres, and indeed the shipping industry, yesterday to join the technology group at investment bank Bear Sterns. Lawyer and presidential confidante Vernon Jorden joined Lazards this week, though it is unclear whether even Mr. Jorden is diplomatic enough to work with shipping investors. Mr. Norton told us that the technology group at Bear Stearns has particular expertise in the areas of software and aerospace. While there is very little capital markets deal flow for shipping at the moment, in our view the field of maritime investment banking will be a bit less crowded when shipping deals start getting done again.

HIGH YIELD

HVIDE

After successfully rebutting a few criticisms of its plan of reorganization, Hvide Marine now has just one more date with the bankruptcy judge, on December 9th, and looks set to emerge from bankruptcy just in time for Y2K to erase all reams of documentation. We understand that Deutsche Bank is arranging the exit financing. The structure of the reorganization has been well covered in Freshly Minted, so search the FM Archive for details.

Those with sharp pencils and a penchant for penny stocks might want to take a look at Hvide common stock. The shares presently trade on the OTC Bulletin Board at around $0.13. Under the plan of reorganization, holders of common shares will receive a warrant for 1 new share of Hvide for every 124 old shares of Hvide held (about 8:1000). Old shares will be cancelled and warrants will have a strike price of $38 and expiration date 4 years from date of issue. Give us a call if you would like to take a look at Hvide’s pro forma 12.3 1.99 balance sheet which uses “Fresh Start Accounting” (i.e vessels have been written down from book to current market value). Continue Reading

Written by: carisk | Categories: Uncategorized | July 8th, 2008 | Add a Comment

Temasek Accumulating Stock in Royal P&O Nedlloyd

Fresh on the heels of last week’s announcement that AP Moller would tender to acquire Royal P&O Nedlloyd, there were this week reports in the Daily Telegraph this week that the Singapore government investment vehicle, Temasek, which owns a 70% stake in rival Neptune Orient Lines, is speculated to be building a stake in P&O (which owns 25% of Royal P&O Nedlloyd). Although such reports have not been confirmed, analysts at Citigroup think it might make sense from a timing and strategic point of view, but not because Temasek is interested in outbidding the mighty Moller. Here’s their reasoning:

* Temasek owns the second largest port company in the world, Ports of Singapore

* Citi believes P&O Ports would be an attractive addition to the PSA, as it would further dilute the dominance of the transhipment port in Singapore, which currently accounts for over 60% of volumes

* It would also make PSA a more attractive company if Temasek looked to IPO it in the future

* NOL has long been mooted in the press as an attractive merger partner for P&O Nedlloyd (PONL) due to complementary route networks

* The recent announcement by AP Moller that it intends to make a cash offer at EUR 57 for PONL may have forced Temasek’s hand

* Given the strong financial backing of AP Moller, entering into a bidding war for PONL would not appear to be an attractive option; however, acquiring P&O would give Temasek a 25% stake in PONL, which could be enough to defend or discourage a bid from AP Moller

* This would give Temasek the option in the future to initiate a merger between PONL and NOL

* Recent bid premiums have been in the range of 20-40%, which would imply an offer of 340-390p would be needed to secure P&O

* There is no tangible evidence at the present time, but Citi believe this is a plausible scenario

* Citi maintains their Buy/ Medium risk (1M) recommendation for P&O and 315p share price target, rates P&O Nedlloyd Hold/ High Risk, price target EUR 57, and rates AP Moller Sell/ High Risk, target price Dkr40,000

Written by: carisk | Categories: Freshly Minted, Market Commentary | May 19th, 2005 | Add a Comment

N O L FINALLY SELLS AET

By Urs M Dür

[The following is an updated version of what appeared in Freshly Minted May 1st 2003. The conclusions are similar, but new numbers were provided and added to shed even more light on this substantial deal. – ED]

Singapore listed Neptune Orient Lines (NOL) finally, after years of trying to divest itself of its profitable Atlantic basin tanker arm, sold American Eagle Tankers (AET) to Malaysia International Shipping Corp. (MISC) for a total of $1 ,02 billion in equity ($445m), dividend funding $75m) and assumption of debt ($500m according to sources at NOL). NOL, losing over $220m last year and levered 84% debt to book at the end of ’02 (far worse, needless to say, debt/NAV), needed to do something and by our estimation got a big premium for the AET assets even if one includes the goodwill and franchise value associated with AET, about 202% of NAV. We go over our estimates below.

JPMorgan, specifically Michael Borch, was financial advisor to NOL and Citibank to MISC. Both banks, while it appears at this stage that NOL got the better of the deal just as the Aframax market is going to get blasted with a 9% supply increase in a falling market, deserve a huge amount of credit for getting a deal, which many said was politically unfeasible especially as the Malaysian government, via Petronas, and the Singaporean authorities, Temasec, respectively controlling owners of MISC and NOL, are known political rivals not usually willing to cut each other some slack. Really, bravo to both banks.