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Norwegian OTC Finding Paths to Liquidity for Stranded Investors - - PowerPoint PPT Presentation
Norwegian OTC Finding Paths to Liquidity for Stranded Investors - - PowerPoint PPT Presentation
Norwegian OTC Finding Paths to Liquidity for Stranded Investors Marine Money conference June 2015 Christian Moxon Managing Director, Head of US offices Christian.moxon@paretosec.com What is the OTC market? A proven entry to the private
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USD 4.5bn raised in shipping equity in this cycle on the N-OTC list
N-OTC Transaction 2012 – To date
2012
2,717 1,830 4,547 USDm raised
Pareto Securities transactions Other
21 8 29 # of transactions
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Where are the companies now?
2012
listed listed Still N-OTC registered – considering options
N-OTC Transaction 2012 – To date
1) Assuming completion of contemplated Gener8 IPO 1)
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How did they perform while being N-OTC registered listed
62 % 52 % 22 %
Return from initial N-OTC placement until pricing at IPO1)
1) Assuming completion of contemplated Gener8 IPO at mid-point pricing Source: Factset, Pareto Securities Research
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How did they perform while being N-OTC registered listed
Return from initial N-OTC placement until pricing at IPO
62 % 28 % 5 %
Source: Factset, Pareto Securities Research
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How have the ones that remain N-OTC registered performed compared to its listed peers?
- 84 %
- 80 %
- 75 %
- 69 %
- 69 %
- 42 %
- 90 %
- 80 %
- 70 %
- 60 %
- 50 %
- 40 %
- 30 %
- 20 %
- 10 %
0 % SALT-US SBLK-US GOGL-US PIONEER SB-US DSX-US
Share price performance dry bulk Share price performance since April 2014 to date1)
1) Pioneer share price based on return from initial N-OTC raise to last done transaction price 2) EIGHT share price based on return from the first N-OTC raise to the 3rd N-OTC raise Source: Factset, Pareto Securities Research
Share price performance product tankers Share price performance since September 2013 to date2)
22.5 % 6.5 % 1.5 % 1.5 % 1.3 % 0 % 5 % 10 % 15 % 20 % 25 % 30 % 35 % 40 % 45 % 50 % EIGHT-NO STNG-US DIS-IT ASC-US NNA-US
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Private equity still constitute a small part of the total capital structure
USDbn 1 2 4 3 8 3 21 2009 2010 2011 2012 2013 2014 Total
Gross amount of PE shipping investments
Source: Marine Money, Tufton Oceanic, Watson Farley & Williams
World’s shipping fleet (incl. newbuild orders)
250 300 140 70 760 Dry Wet Container General cargo Total USDbn 97 % 3 % Government, bank debt, bonds, public equity and unfuned orderbook "Newly invested" private equity
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Paths to liquidity
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Alternatives to the holy grail
Oslo IPO
Source: Pareto Securities
Liquidity post listing
- ften more
important to investors than the listing venue itself Norwegian (shipping) companies priced on par with US companies Quick and document light process
Case examples: Tankers Investments January 2014
- N-OTC
placement of USD 250m
- Acquisition of 8x
2nd hand afra- and suezmaxes
- Oslo-listed 2
months after initial N-OTC raise
March 2014
Further vessel acquisitions and growth of company
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Alternatives to the holy grail
Source: Pareto Securities
M&A
Larger (listed) players are looking for growth – smaller platforms looking for liquidity Consolidation will continue to be the theme of the shipping market
1) USD 16.2 per BLUE share is based on a Genmar/BLUE exchange rate of 0.89x and assumes completion of the contemplated Gener8 IPO at mid-point pricing Source: Pareto Securities
Case examples: Navig8 Crude Tankers
10.0 13.5 16.2 Dec-13 March-14 Jun-15
USD 160m N-OTC placement in Dec-13 @ USD 10.0/share USD 250m N-OTC placement in March- 14 @ USD 13.5/share IPO in June-151) 62% unleveraged return USD/share
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Alternatives to the holy grail
Source: Pareto Securities
Recapitalization
Recapitalization through the bond market provides investors with a (partial) exit The bond product with flexibility on use
- f proceeds,
covenants and tenor making it a viable
- ption for all asset
classes and age profiles
Illustrative re-leverage example
60 60 40 30 60 50 Vessel value today Vessel appreciation Vessel value tomorrow 60% leverage 40% equity Bond debt Bank debt Equity value
Exit through re-leveraging of asset values
USDm
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Alternatives to the holy grail
Source: Pareto Securities
Asset sale
Staggered asset sales an effective alternative to reduce transaction risk compared to an en- bloc sale of the entire fleet
Case examples: Navig8 Product Tankers
48 60 Sept-13 May-15 Entered into newbuilding contract at USD 48m per vessel following completion of N-OTC raise in September 2013 Sold 3x newbuilding contracts at USD 60m per vessel in May 2015
USDm
25% unleveraged return
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Contact details and disclaimer
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- n a preliminary basis, the feasibility of one or more potential transactions. The materials may not be used for any other purpose and may not be copied or disclosed, in whole or in part, to any
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