In contrast to the Oceanut transaction, Seanergy Maritime Corp. can rightfully say, “been there done that” as shareholders finally approved its transaction to acquire 6 bulk carriers from the Restis family this week. It has not been an easy road for the company as we have previously documented. The shareholder vote was deferred three times necessitating the Restis family to increase its investment twice. Ultimately, Restis affiliates owned beneficially 10,114,761 shares, representing 35.4% of the company’s outstanding shares, which amount excludes 2,750,000 shares with respect to which affiliates of the Restis family have shared voting power but do not have dispositive power. Their position was solidified by George Koutsolioutsos, Seanergy’s Chairman, who increased his beneficial ownership to 8.4% of the outstanding shares exclusive of an additional 3,190,000 shares over which Mr. Koutsolioutsos has shared voting power.
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Freshly Minted,
The Week in Review | August 28th, 2008 |
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While there are rumors of a number of IPOs in the works, volatility and uncertainty has all but brought the US equity markets to a stop, and we don’t expect to see much more done over the summer. Bank debt has not proved as much of a problem for shipping. Most recently this week Deutsche Bank and HSH Nordbank acted as MLAs on a $753.1 million loan for E. R. Schiffhart GmbH & Cie KG to finance ten capesize bulkers currently under construction in Korea by the Hyundai Group with delivery expected throughout 2010. BNP Paribas, Commerzbank and Dresdner Kleinwort joined DB and HSH as arrangers while Deutsche Schiffsbank came in as a co-arranger for the deal, which finances 71% of the $1,056 million project cost and covers both pre and post-delivery financing. Notably Ralph Bedranowsky of Deutsche Bank and Harald Kuznik of HSH both hailed the deal as an example of “the global shipping market…returning to reasonable, market-consistent valuations…”
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With Trøim at Carnivale in Rio, Shipping Deals Slow Down
Navios Selling, Selling Navios
There’s been a lot of buzz in the ship finance world this week about Lazard’s auction of Connecticut-based Navios Corporation. For those that missed it, Navios major shareholders, which are comprised of the company’s management, the Leventis Group of Greece and Saltchuk of Seattle, together hired investment bank Lazard Freres to sell the asset-light dry bulk owner operator a few months ago, and as bids came in late last week the market was aflutter with speculation and excitement.
Many of the shipping investment banks were representing bidders on the deal, which saw valuations range from $450 million to over $550 million. The deal also piqued the interest of many of the dominant consolidators and traders like OMI, Restis and Fredriksen, along with Goldman Sachs and George Economou‘s recent, oversubscribed and cash-laden DryShips. As we go to press tonight, blank check company International Shipping Enterprises announced that, “following a competitive bidding process, it executed an agreement providing for an exclusive period to negotiate definitive documentation to acquire all of the shares of Navios.”
For those who don’t know the company, Navios was founded 50 years ago as the shipping subsidiary of United States Steel Corporation, and today the fleet is comprised of 28 panamax and handymax vessels. We don’t have the offering memo on this deal, so we won’t even play around with a valuation because it’s impossible to do with any accuracy. Here’s why: of the company’s 28 vessels, the 6 ultra handymaxes are owned, and of the 22 long-term time chartered vessels, 15 are currently in operation and the remaining seven are scheduled for delivery at various times over the next two years. Moreover, Navios has options to acquire 13 of the time-chartered vessels. Further, we suspect that the owned vessels have a substantial net asset value and historically the vessels controlled under the largely Japanese charters-in have low daily rates and cheap purchase options. If that weren’t enough of a rat’s nest for valuation, Navios generates loads of money trading ships and FFAs and owns and operates a bulk terminal in Uruguay to boot. That’s why we won’t touch it.
We will say, however, that we always find it fascinating when asset-light shipping companies, whether they are traders or non-owning pools, solicit a valuation for their businesses. We say fascinating because historically shipping companies have had a hard time proving worth beyond steel irrespective of the talents of their management or sophistication of their software. That said, there have been some success stories, the best of which is Noble Group, which has a $3 billion market capitalization on the Singapore Stock Exchange. PacBasin also got some credit for its management. Noble, like Navios, owns few ships but instead make their money trading commodities.
Until we have more information, all we will say is this: if any asset-light shipping company could break ground in gaining a high valuation, it is Navios and it is now. The company has an incredibly good reputation and has developed what we understand to be highly efficient freight forecasting models – which begs another question: why are they selling?
Navios Selling, Selling Navios
There’s been a lot of buzz in the ship finance world this week about Lazard’s auction of Connecticut-based Navios Corporation. For those that missed it, Navios major shareholders, which are comprised of the company’s management, the Leventis Group of Greece and Saltchuk of Seattle, together hired investment bank Lazard Freres to sell the asset-light dry bulk owner operator a few months ago, and as bids came in late last week the market was aflutter with speculation and excitement.
Many of the shipping investment banks were representing bidders on the deal, which saw valuations range from $450 million to over $550 million. The deal also piqued the interest of many of the dominant consolidators and traders like OMI, Restis and Fredriksen, along with Goldman Sachs and George Economou‘s recent, oversubscribed and cash-laden DryShips. As we go to press tonight, blank check company International Shipping Enterprises announced that, “following a competitive bidding process, it executed an agreement providing for an exclusive period to negotiate definitive documentation to acquire all of the shares of Navios.”
For those who don’t know the company, Navios was founded 50 years ago as the shipping subsidiary of United States Steel Corporation, and today the fleet is comprised of 28 panamax and handymax vessels. We don’t have the offering memo on this deal, so we won’t even play around with a valuation because it’s impossible to do with any accuracy. Here’s why: of the company’s 28 vessels, the 6 ultra handymaxes are owned, and of the 22 long-term time chartered vessels, 15 are currently in operation and the remaining seven are scheduled for delivery at various times over the next two years. Moreover, Navios has options to acquire 13 of the time-chartered vessels. Further, we suspect that the owned vessels have a substantial net asset value and historically the vessels controlled under the largely Japanese charters-in have low daily rates and cheap purchase options. If that weren’t enough of a rat’s nest for valuation, Navios generates loads of money trading ships and FFAs and owns and operates a bulk terminal in Uruguay to boot. That’s why we won’t touch it.
We will say, however, that we always find it fascinating when asset-light shipping companies, whether they are traders or non-owning pools, solicit a valuation for their businesses. We say fascinating because historically shipping companies have had a hard time proving worth beyond steel irrespective of the talents of their management or sophistication of their software. That said, there have been some success stories, the best of which is Noble Group, which has a $3 billion market capitalization on the Singapore Stock Exchange. PacBasin also got some credit for its management. Noble, like Navios, owns few ships but instead make their money trading commodities.
Until we have more information, all we will say is this: if any asset-light shipping company could break ground in gaining a high valuation, it is Navios and it is now. The company has an incredibly good reputation and has developed what we understand to be highly efficient freight forecasting models – which begs another question: why are they selling?
