Bank of China in Action Again, What’s New

Bank of China has extended a USD 179.55 million buyer’s credit facility to STX Pan Ocean recently in relation to the South Korean shipper’s acquisition of three 17,600 DWT bulkers ordered at Jiangsu New Century Shipyard. Jiangsu New Century Shipyard is one of the largest private shipbuilding groups in China who has built over 100 ships for owners in Denmark, United Kingdom, Germany and Italy. This successful transaction was initiated by Bank of China’s branch in Jiangsu province, upon news of STX Pan Ocean’s difficulty in securing finance for the ships. This year, STX Pan Ocean has earmarked USD 203 million to invest in 6 vessels. Continue Reading

A Better Idea

Last week we described how BW Gas’ decision to withdraw from the Norwegian tax system and today’s declining asset values had stressed its balance sheet requiring a substantial equity infusion in order to avoid breaching its covenants.

To add some cushion to today’s equity value in order to prevent the potential breach of its equity covenants as well as to deal with the continued turbulence in the financial and shipping markets, BW Gas has entered into an agreement to purchase Bergesen LNG from the company’s main shareholder, World Nordic SE. The total consideration to be paid for the shares of Bergesen LNG, which owns four LNG vessels, is $720 million, which will be paid through the issuance of 273.6 million new shares to the seller at a price of NOK 18.5 per share. The four modern vessels, built between 2006 and 2008, are on time charters for a remaining term of 20.5 years to Nigeria LNG. The vessels will be transferred debt free further bolstering the company’s balance sheet.
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Defensive Acquisition with Upside

On Tuesday, just a week after Quintana‘s press release announcing the termination of the sale process, Excel and Quintana jointly announced that Excel had, over the weekend, agreed to acquire Quintana pursuant to a definitive merger agreement whereby Quintana would become a wholly owned subsidiary of Excel. The purchase price will be approximately $2.2 billion (based upon Excel’s closing price of $33.00), including net debt of Quintana and other costs.

Under the terms of the agreement, Quintana shareholders will receive a combination of cash and stock. Each Quintana share will receive $13.00 in cash and 0.4084 shares of Class A common stock in Excel. Based upon Monday’s closing price, the offer represents a total value of $26.48 per share, representing a 57% premium to Quintana’s closing price on that day of $16.89 and a 34% premium to Quintana’s 30-day average price. The agreement provides for a cap of $31.38 based upon an Excel share price of $45.00 as well as price adjustments for dividend payments. Continue Reading