Building a capital markets vehicle from scratch Marine Money conference November 2014

Transcription

1 Building a capital markets vehicle from scratch Marine Money conference November 2014 Christian Moxon Managing Director, Head of US offices [email protected]

2 What is the OTC market? A proven entry to the private equity/private placement market Unregulated market with access to trading/secondhand market Structure and pricing based on previous transactions and precedence An unlimited ability to pre-sound market All companies/industries can utilize market, but it is not for everyone Speed to market enables accuracy in pricing Pareto knows this market better than anyone 2

3 Pareto has raised close to USD 8bn in shipping capital this cycle Equity offerings amount to more than USD 7bn Pareto shipping transactions YTD Company Date Sector Size (USDm) Transaction DryShips Oct-14 Drybulk 350 Equity Golar LNG Sep-14 LNG 1,900 Equity Navig8 Chemical Tankers Inc Jul-14 Other 110 Equity Navig8 Product Tanker Inc Jul-14 Product 95 Equity Exmar Jun-14 LPG 115 High Yield Golar LNG Jun-14 LNG 683 Equity Aurora LPG Jun-14 LPG 45 Equity Aker Philadelphia Shipyard Jun-14 Product 115 Equity Avance Gas Holding Apr-14 LPG 275 Equity Global Ship Lease Mar-14 Other 420 High Yield Klaveness Ship Holding Mar-14 Other 67 High Yield Pioneer Marine Mar-14 Drybulk 75 Equity Navig8 Crude Tankers Mar-14 Crude 250 Equity Chemical Transportation Mar-14 Other 100 Equity Tanker Investments Inc Mar-14 Crude 193 Equity Ardmore Shipping Corp Mar-14 Product 109 Equity Aurora LPG Jan-14 LPG 150 Equity Tanker Investment Inc Jan-14 Crude 250 Equity Aker Philadelphia Shipyard Jan-14 Other 60 Equity Kistefoss Dec-13 Other 108 High Yield Navig8 Crude Tankers Dec-13 Crude 160 Equity American Shipping Company Dec-13 Product 120 Equity Nordic American Tankers Ltd Nov-13 Crude 65 Equity Hafnia Tankers Ltd Nov-13 Product 75 Equity Avance Gas Nov-13 LPG 100 Equity Dorian LPG Nov-13 LPG 250 Equity Greenship Bulk Trust Oct-13 Drybulk 23 Equity Navig8 Product Tanker Inc Oct-13 Product 150 Equity Hafnia Tankers Ltd Oct-13 Product 235 Equity Western Bulk ASA Oct-13 Drybulk 125 Equity Star Bulk Oct-13 Drybulk 70 Equity Frontline 2012 Sep-13 Drybulk 225 Equity Navig8 Product Tanker Inc Aug-13 Product 170 Equity Greenship Bulk Trust Aug-13 Drybulk 25 Equity Dorian LPG Jul-13 LPG 168 Equity Ocean Yield Jul-13 Other 166 Equity Greenship Bulk Trust Jun-13 Drybulk 62 Equity Klaveness Ship Holding May-13 Other 50 High Yield Western Bulk ASA Apr-13 Drybulk 50 High Yield Nordic American Tankers Ltd Apr-13 Crude 90 Equity Deal value Pareto shipping deals USDm 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 # of deals ,848 Total deal value (USDm) 9 9 1,740 Total sole deal value (USDm) 8 8 Drybulk LPG/LNG Product Various Crude 6 3

4 The N-OTC market can be deeper than Oslo Stock Exchange More capital raised since 2013 in the N-OTC market than on OSE Capital raised Norwegian OTC versus Oslo Stock Exchange NOKbn # of deals YTD Norwegian OTC Oslo Stock Exchange # of OTC deals (rhs) Since 2013, more capital has been raised in the N-OTC market than on Oslo Stock Exchange NOK 34bn of N-OTC equity raised compared to NOK 32bn on OSE The N-OTC market has become very popular for international unlisted companies wanting to raise equity capital without a cumbersome listing process Overweight of US companies among the larger issuers last couple of years Note: USD/NOK of 6.15 Source: Pareto Securities, Norwegian Securities Dealers Association 4

5 Effective pricing achievable in the OTC market Share price development Dorian LPG NOK/share Dorian LPG completed 3x private placement in the N-OTC market prior to the US IPO in April USD 170m private placement in July 2013 at NOK 15.0/share 2. USD 250m private placement in November 2013 at NOK 18.5/share 3. USD 100m private placement in February 2014 at NOK 22.0/share Listing at NYSE in April 2014 done at a NOK equivalent price of 22.8/share 1) N-OTC transactions reflects fair market pricing Issue price Jul-13 Placement Issue price Nov-13 Placement Issue price Feb-14 Placement Issue price IPO Apr-14 Share price development Navig8 Crude Tankers USD/share Navig8 Crude Tankers completed 2x private placements in the N-OTC market USD 160m private placement in December 2013 at USD 10.0/share 2. USD 250m private placement in March 2014 at USD 12.50/share Last done in the market prior to the March placement of USD 12.5/share Private placement completed at a ~10% premium to last done in the market, as the USD 13.5/s price reflected fair NAV at time of issue Issue price Dec-13 Placement Last done prior to Mar-13 placement Mar-13 Private Placement price 1) Adjusted for 1:5 reverse share split 5

6 Case study - The Navig8 Group Successfully raised USD 1.2bn in equity last 12 months with Pareto as Sole Manager Navig8 Ltd, an integrated shipping management provider, and the world s largest independent pool and commercial manager, technical management firm and bunker trader/broker Manages 14 shipping pools in four shipping segments: crude, product, chemicals and dry bulk 211 vessels under management plus 74 committed to the pools Most diverse pool member base with 46 owners from 21 countries Established in Aug-13 OTC-registered under EIGHT Fleet of 30x newbuilds from STX, GSI, Sungdong and SPP 18 x LR2s 12 x LR1s Market s largest LR platform 3 private placements USD 170m in Aug-13 USD 150m in Oct-13 USD 95m in Jul Established in Dec-13 OTC-registered under BLUE Fleet of 14x VLCC newbuilds HHI: 6x SWS: 6x Hanjin: 2x Market s largest VLCC newbuild platform 2 private placements USD 160m in Dec-13 USD 250m in Mar Established in Sep-13 OTC-registered under CHEMS Fleet of 32x newbuilds 18 x 37k dwt IMO II 6 x 50k dwt IMO II 8 x 25k dwt SS Market s largest chemical newbuild platform Partnership with Oaktree USD 230m JV investments USD 110m private placement in 1.3 Aug Commercial platform extended with 3 separate asset vehicles established since August 2013 USD 4.3bn in total assets USD 1.2bn in equity raised 76 ECO newbuilds Equity raised (USDm) Assets (USDbn) Equity raised (USDm) Assets (USDbn) Equity raised (USDm) Assets (USDbn) 6

7 OTC timeline Navig8 Product Tankers 3x OTC private placements completed in approx. 3 5 weeks each USD 415 million raised in three stages USDm Establish newbuild program August-13 October-13 July-14 Total volume raised Timeline overview for 3x Navig8 Product Tankers transactions Structuring discussions & due dilligence After initial discussions and signing of mandate agreements, approximately two weeks were used to arrive at company- and transaction structure and to conduct the necessary diligence Exercise options Preparation of documentation Term sheet and application agreement are off the shelf material for most OTC private placements, and required minor adjustments to finalize for the Navig8 transactions Preparation of the investor presentation being the most time-consuming exercise Funding of process payments 95 Pre-sound & bookbuilding Pre-sound and bookbuilding was conducted in parallel, and ranged from 1 2 weeks 415 OTC registration & start of trading Approximately 1-2 weeks 1 2 weeks 1 2 weeks 2 days OTC registration is done by Pareto and was conducted in 1 day Shares started trading at the day following the registration Pareto raised USD 415 million on a sole basis for Navig8 Product Tankers, through 3 private placements The processes ranged from approximately 3 5 weeks, excluding initial discussions Preparation of documentation and pre-sound/bookbuilding typically the most time-consuming Soft listing commitments were given, indicating the company s approach towards a full public listing 7

8 The Navig8 Group Why were Navig8 successful? Navig8 fleet breakdown Navig8 Group is an integrated shipping management provider World s largest independent pool and commercial manager, technical management firm and bunker trader/broker Global network of 9 offices proximity to customers and regional markets V8, 24 VL8, 34 Supra8, 48 Pan-8, 3 Navig8 Group manages 14 shipping pools in four shipping segments: crude, product, chemicals and dry bulk 211 vessels under management plus 74 committed to the pools Most diverse pool member base with 46 owners from 21 countries ALPHA 8, Total Taras8, 6 Brizo8, 26 Unrivalled network of charterer relationships 40% of 2013 fixtures concluded with top 15 customers, including BP, ExxonMobil, Petrobras, Shell, Total, ST Shipping (Glencore), Trafigura and Vitol Formed three vessel-owning companies in 2013 to invest in newbuild crude, product and chemical tankers LR8, 26 MR, 14 Handy, 9 Bunker, 2 Chronos8, 14 Delta8, 35 ST8, 18 USD ~4.3bn of assets through 76 eco newbuild orders USD ~1.2bn of equity raised 3x different asset investment vehicles all listed on N-OTC Navig8 Group Divisions: 8

9 Why were Navig8 successful? (cont ed) Market timing. LR2 newbuild pricing USDm Monday Tuesday Wednesday Thursday Saturday Sunday Monday Tuesday Thursday Friday VLCC newbuild pricing 1) USDm Attractive market timing 0 Thursday Saturday Sunday Monday Tuesday Thursday Friday Saturday Sunday Tuesday 37k Dwt Interline-Coated Vessels newbuild prices USDm ) Inflation adjusted Source: Pareto Securities Research 9

10 Why were Navig8 successful? (cont ed) Experienced management team Investor friendly setup Responsive to feedback Treating the equity capital markets is a partnership and longer term undertaking not just a funding source Strong commercial platform Co-invested on equal terms Continuously in dialog with its investors 10

11 Why were Navig8 successful? (cont ed) Experienced management team Investor friendly setup Responsive to feedback Treating the equity capital markets is a partnership and longer term undertaking not just a funding source Strong commercial platform Co-invested on equal terms Continuously in dialog with its investors 11

12 Why were Navig8 successful? (cont ed) Experienced management team Investor friendly setup Responsive to feedback Treating the equity capital markets is a partnership and longer term undertaking not just a funding source Strong commercial platform Co-invested on equal terms Continuously in dialog with its investors 12

13 Why were Navig8 successful? (cont ed) Experienced management team Investor friendly setup Responsive to feedback Treating the equity capital markets is a partnership and longer term undertaking not just a funding source Strong commercial platform Co-invested on equal terms Continuously in dialog with its investors 13

14 Why were Navig8 successful? (cont ed) Experienced management team Investor friendly setup Responsive to feedback Treating the equity capital markets is a partnership and longer term undertaking not just a funding source Strong commercial platform Co-invested on equal terms Continuously in dialog with its investors 14

15 Why were Navig8 successful? (cont ed) Experienced management team Investor friendly setup Responsive to feedback Treating the equity capital markets is a partnership and longer term undertaking not just a funding source Strong commercial platform Co-invested on equal terms Continuously in dialog with its investors 15

16 Why were Navig8 successful? (cont ed) Experienced management team Investor friendly setup Responsive to feedback Treating the equity capital markets as a partnership and longer term undertaking not just a funding source Strong commercial platform Co-invested on equal terms Continuously in dialog with its investors 16

17 Current market pricing US players at 1.02x GAV Norwegian players at 0.95x Markets are tough, but no crash 1) Pareto Research estimates 17

18 18

19 Contact details and disclaimer Oslo (Norway) Pareto Securities AS Dronning Mauds gate 3 PO Box 1411 Vika N-0115 Oslo NORWAY Stavanger (Norway) Pareto Securities AS Haakon VIIs gate 8 PO Box 163 N-4001 Stavanger NORWAY Bergen (Norway) Pareto Securities AS Olav Kyrres gate 22 PO Box 933 N-5808 Bergen NORWAY Kristiansand (Norway) Pareto Securities AS Dronningensgate 3 N-4611 Kristiansand NORWAY Trondheim (Norway) Pareto Securities AS Nordre gate 11 PO Box 971 Sentrum N-7410 Trondheim NORWAY Pareto Shipping AS Dronning Mauds gate 3 PO Box 1411 Vika N-0115 Oslo NORWAY Pareto Offshore AS Dronning Mauds gate 3 PO Box 1411 Vika N-0115 Oslo NORWAY Copenhagen (Denmark) Pareto Securities AS Copenhagen Branch Langebrogade 5 DK-1411 Copenhagen K DENMARK Tel: Fax: Tel: Fax: Tel: Fax: Tel: Fax: Tel: Fax: Tel: Fax: Tel: Fax: Tel: Fax: Stockholm (Sweden) Pareto Securities AB Berzelii Park 9 PO Box 7415 S Stockholm SWEDEN Tel: Fax: Malmö (Sweden) Pareto Securities AB Stortorget 13 S Malmö SWEDEN Tel: Fax: Helsinki (Finland) Pareto Securities Oy Aleksanterinkatu 44, 6 th floor FI Helsinki FINLAND Tel: Fax: London (UK) Pareto Securities AS, London Branch 1 Berkeley Street London W1J 8DJ UNITED KINGDOM Tel: New York (US) Pareto Securities Inc 150 East 52 nd Street, 29 th floor New York NY USA Tel: Fax: Houston (US) Pareto Securities Inc One Riverway, Suite 1704 Houston TX USA Tel: Fax: Singapore Pareto Securities Pte Ltd 16 Collyer Quay #27-02 Hitachi Tower Singapore SINGAPORE Tel: Fax: Rio de Janeiro (Brazil) Pareto Securities Ltda Av. Presidente Wilson 231, 9 andar Rio de Janeiro, RJ BRAZIL Tel: Fax: Bloomberg: PASE (go) Reuters: PARETO Disclaimer These materials have been prepared by Pareto Securities AS and/or its affiliates (together Pareto ) exclusively for the benefit and internal use of the client named on the cover in order to indicate, on 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 third party without the prior written consent of Pareto. The materials contain information which has been sourced from third parties, without independent verification. The information reflects prevailing conditions and Pareto s views as of the date of hereof, and may be subject to corrections and change at any time without notice. Pareto does not intend to, and the delivery of these materials shall not create any implication that Pareto assumes any obligation to, update or correct the materials. Pareto, its directors and employees or clients may have or have had positions in securities or other financial instruments referred to herein, and may at any time make purchases/sales of such securities or other financial instruments without notice. Pareto may have or have had or assume relationship(s) with or engagement(s) for or related to the relevant companies or matters referred to herein. The materials are not intended to be and should not replace or be construed as legal, tax, accounting or investment advice or a recommendation. No investment, divestment or other financial decisions or actions should be based solely on the material, and no representations or warranties are made as to the accuracy, correctness, reliability or completeness of the material or its contents. Neither Pareto, nor any of its affiliates, directors and employees accept any liability relating to or resulting from the reliance upon or the use of all or parts of the materials. 19