Expanding Relationship with Stealth Owner

Seacor Holdings Inc. expanded their relationship with Banc of America Leasing (“BofA Leasing”) during the fourth quarter of last year having entered into the sale-leaseback of two 1999 built Double Eagle Tankers, the M/T Oregon Voyager and the M/T California Voyager. The vessels were sold for $181 million en bloc, exceeding the combined book value of $69.3 million. As dictated by accounting standards, the gain of $111.7 million will be deferred and amortized over the remaining minimum fixed charter periods of 158 months in the case of one vessel and 143 months in the case of the other. These periods take you close to the financeable life of 25 years and probably the end of the fixed charter period with Chevron Shipping. Clearly monetizing this assets was an excellent deal for Seacor and for the Bank, as well, which has a 12 year stream of payments backed by a major oil company.

Written by: marinemoney | Categories: Freshly Minted, The Week in Review | February 24th, 2011 | Add a Comment

Going Public

The expression going public does not only refer to companies. In this instance, our neighbor and good friend Oivind Lorentzen seeking greater challenges beyond those offered by his private interests in shipping has accepted the position of Chief Executive Officer of SEACOR Holdings Inc., where he will have the enviable position of working hand-in-hand with Executive Chairman Charles Fabrikant, his predecessor in that role and the founder of the company.

Written by: marinemoney | Categories: Freshly Minted, Market Commentary | September 30th, 2010 | Add a Comment

Mining the Gap

Last week, SEACOR Holdings Inc. and Tiger Group Investments, Inc. announced the formation of a joint venture, SeaTiger Capital, which intends to provide structured financings and make financial investments in markets where the partners have operating experience with a focus on assets and related operating risks. Strategic investments will remain at the shareholder level while SeaTiger will focus on financial opportunities.

Potential opportunities will be sought in traditional shipping, energy services, logistics/infrastructure, transportation, aviation and related businesses. Investments can cover the full gamut of the balance sheet from senior loans to preferred or common equity investments and may also include specialty financings such as mezzanine lending and bridge financing. Continue Reading

Written by: marinemoney | Categories: Freshly Minted, The Week in Review | June 10th, 2010 | Add a Comment

A Bellwether?

The bond market is getting better. As we saw with the Hornbeck bond last month, spreads and trends are improving. The economy seems to be bottoming out and with an improving economy and inflation fears increasing interest rates should follow. The timing for an offering seemed propitious then as it does now.

It was therefore no surprise that Seacor Holdings Inc. (“Seacor”) became one of the first NY-listed “shipping” companies to issue bonds this week when it priced and sold $250 million of 7.375% Senior Notes due in 2019. The issue was priced at 99.239% to yield 7.471%, reflective of the current market and at a much better rate then would have been achievable 6 months ago. This equates to 400 bps spread over like term Treasuries. The issue was well received and several times oversubscribed and despite requests to upsize the deal, Seacor was satisfied at the current level.

Written by: carisk | Categories: Freshly Minted, The Week in Review | September 24th, 2009 | Add a Comment

Just Another Day in the Life of the Jones Act

When we began our career in ship finance many years ago, the business manager determined that we would avoid financing US Flag vessels because decision-making there was politically motivated, capricious and generally had nothing to do with economics. The one exception, and we are dating ourselves, was the financing of the Alaskan North Slope tanker fleet since they were bareboat chartered to the major oil companies which assumed the “political risk.”

Written by: carisk | Categories: Freshly Minted, Market Commentary | May 1st, 2008 | Add a Comment

Seacor Finds Value in Seabulk

After being in play for more than a year, Seacor Holdings Inc. announced on Wednesday night that they had signed a definitive agreement to acquire tanker/offshore services company Seabulk International, and the transaction has been unanimously approved by the board of directors at each of the companies. According to the agreement, holders of Seabulk stock will for each share receive approximately 0.2694 shares of Seacor common stock and $4.00 in cash. This represents a premium of approximately 29% to where the shares of the companies were trading at market close on March 16; CKH closed at $65.28 while SBLK closed at $16.73. As of press time, Seabulk’s stock has jumped to $21.01, while Seacor’s has fallen marginally to $64.15, which is a typical market reaction to an acquisition.

Private equity funds Carlyle/Riverstone Global Energy and Power Fund I, LP and CSFB-affiliated DLJ Merchant Banking Partners III, LP own approximately 75% of Seabulk’s common shares. Unlike hedge fund Wexford, which sold stock into the open market for many months, Carlyle and CSFB have been patiently waiting to sell for more than a year.. The transaction itself will be worth a total of approximately $1.003 billion, comprised of $532 million in aggregate equity value and $471 million in net debt obligations, comprised of Title XI bonds on the tankers, a high yield bond and a revolving credit facility from Fortis.

When Riverstone bought Seabulk, the investment thesis was that they paid for the company’s modern double hull U.S. flag product tankers and got the offshore business for free. We suspect Seacor’s rationale is probably very similar. Seacor is hardly a stranger to Seabulk as the former bought many of the latter’s more modern assets when Seabulk when into financial distress in 1999.

The last time we valued Seabulk, we arrived at about $14/share, so advisor Jefferies must be feeling very good about the valuation it achieved. UBS Securities acted as financial advisor to Seacor on the transaction. Credit Suisse First Boston advised on behalf of its DLJ Merchant Banking fund. The merger is expected to close by the end of the second quarter of 2005, subject to approval by shareholders of Seacor and Seabulk.

Seacor Chairman and CEO Charles Fabrikant commented in a press release that: “The merger of Seacor and Seabulk fits the goal of diversification we have outlined for several years in annual letters to shareholders. Both Seacor and Seabulk have achieved leadership positions in different asset-based transportation service businesses. The combination will create a balanced portfolio of assets, focused on five different business niches. Seabulk’s position in the U.S. tanker business, with its business template of multi-year contracts, and the harbor tug business are a good balance to the offshore vessel sector, the helicopter business, and the inland river barge business.”

Seabulk’s Chairman and CEO Gerhard Kurz expressed similar sentiments, and it the new company will certainly go to a privileged position as one of only two companies providing complete global service in their specific industry. It will be interesting to see how this affects the valuation, though we do suspect there may be further shake-up to come after the transaction is finalized. OSG had in the past expressed interest in Seabulk’s tanker fleet, and with tanker values at a substantial premium to historical prices, it would not be too surprising to see Seacor opt to cash out on the value of Seabulk’s fleet rather than getting involved in a whole new industry that would not add much value to its other operations.

Written by: carisk | Categories: Freshly Minted, Mergers & Acquisitions | March 17th, 2005 | Add a Comment