SHIPSINVEST AS COMPANY PRESENTATION. August High dividend, low operational risk

Transcription

1 SHIPSINVEST AS High dividend, low operational risk COMPANY PRESENTATION August 2015

2 i. Introduction to Shipsinvest AS ii. Investment strategy iii. Key financials iv. Appendix 1: Detailed project info v. Appendix 2: Market information 2

3 Shipsinvest - Introduction SHIPSINVEST invests in ownership positions in single purpose ship owning companies (minimum 25% ownership) SHIPSINVEST main focus is service vessels for the offshore oil industry and fish farming industry SHIPSINVEST pay quarterly dividends to the shareholders SHIPSINVEST has a historical average dividend level of approx. 10% p.a. SHIPSINVEST expects to deliver an IRR in the range of 20% p.p (incl sales proceeds) SHIPSINVEST invests in vessels with long term BB/TC contracts with solid counterparts SHIPSINVEST has an attractive and diversified portfolio of offshore service vessels and live fish carriers SHIPSINVEST strives for a listing within end

4 Shipsinvest - Who we are Shipsinvest AS was established in 2010 as a financial ship owning company Shipsinvest has invested approx. NOKm 300 in 7 vessels Target to raise minimum NOKm 300 to be invested in new vessels Listing of the company within end 2016 Sydvestor AS is adm. manager for Shipsinvest AS and for the ship owning companies based on management agreements on ordinary commercial terms Representatives of the adm. manager represents Shipsinvest AS in the BOD in the ship owning companies 4

5 The Shipsinvest structure Shipsinvest invests in single purpose companies (SPC`s) owning vessels with long term BB/TC contracts with solid counterparties and a minimum of 25% ownership 58 shareholders as per date (appendix 5 for details) No or limited operational risks secured with step-in arrangements on the TC-contracts and incentive based purchase options and/or sales triggers Shareholders 70% 30% 25% 42% 34% 100% Sydvestor Troll DIS Seacor Grant DIS Volstad Construction AS Inter Caledonia AS Volstad Construction II AS Shipsinvest LFC AS MV Havila Troll MV Seacor Grant MV Grand Canyon MV Inter Caledonia MV Grand Canyon II MV Christine MV Roy Kristian Stand-by/ Rescue vessel Anchor Handling Tug Supply Vessel (AHTS) Construction vessel Live fish Carrier Construction vessel Live Fish Carrier Live Fish Carrier Since June 2010 Since July 2010 Since October 2012 December 2015 Since April 2015 Since May 2015 Since May

6 Management and Board of Directors with extensive shipping and capital market experience Management Jostein Sætrenes, CEO Experienced executive as CFO and Director from companies within offshore shipping and finance, and CEO from ship owning/ship operation and banks Extensive international experience as s Director of Boards in shipping companies, shipyards, financing institutions Ottar Jan Mork, CFO Higher education in accounting, auditing, finance and tax Extensive experience in tax administration and auditing from major auditing companies and as CFO companies in the maritime industry as well as from offshore shipping companies Board of Directors Ole-Reinhart Notø Chairman of the Board Lawyer and investor with extensive experience from shipping industry, maritime industry, M & A etc Partner in the Norwegian law company Adviso Former partner in Schjødt Frede Uldbæk Managing Partner in Sydvestor AS Experienced director and executive as CFO from Danish and Norwegian maritime industry, ship owning companies and ship operation of deep sea fishing and offshore service vessels Partner in several investment companies Stian Erik Bjåstad Experienced investor in the maritime industry and ship owing companies CFO in Hareid Group Magnus Vaaler Vice President in Offshore Merhant Partners AS Broad experience from equity and debt financing projects, sale/leasebacks, asset sales/purchases and start-ups and restructurings of companies in the shipping industry Holds a Bachelor of Commerce (BComm) degree with specialization in banking and finance from University College Dublin, Ireland Palmar Gjerde Chairman and owner of Gjerde Invest AS Experienced investor in the maritime industry and ship owing companies Dag Ulstein Kristensen Chairman and owner of DUK Invest AS Experienced investor in the maritime industry and ship owing companies Directors and management are shareholders in Shipsinvest AS 6

7 Shareholders as per Ordinary shares No A-shares Represented by Sun Equity AS ,65 % Jostein Sætrenes, CEO Imagine Capital AS ,96 % Sydvestor AS ,32 % Frede Uldbæk, board member DUK Invest AS ,17 % Dag Kristensen, board member Hareid Elektriske AS ,89 % Stian Erik Bjåstad, board member Gjerde Invest AS ,48 % Palmar Gjerde, board member Pyrofabrikken AS ,45 % Inger M. Kristensen AS ,13 % Jasimo AS ,79 % Stig Ulstein AS ,79 % Drome AS ,78 % EMAR Invest AS ,66 % Soltun Invest AS ,78 % Nordvestor Aktiv AS 798 2,22 % Frede Uldbæk, board member Huk Invest AS 658 1,83 % Ulstein Kulen AS 650 1,81 % Palmar Gjerde 619 1,72 % Palmar Gjerde, board member OZO Invest AS 600 1,67 % Harald Invest AS 600 1,67 % Evo Holding AS 600 1,67 % Others ,54 % Ole Reinhart Notø, chairman (0,84%), Ottar Jan Mork, CFO (0,33%) Total A-shares ,0 % Preferance shares No (not entitled to vote) B-shares Represented by Offshore Merchant Partners GP AS ,0 % Magnus Vaaler, board member Total B-shares ,0 % Preferance shares No (not entitled to vote) C-shares Represented by Offshore Merchant Partners GP AS 1 100,0 % Magnus Vaaler, board member Total C-shares 1 100,0 % 58 shareholders as per

8 i. Introduction to Shipsinvest AS ii. Investment strategy iii. Key financials iv. Appendix 1: Detailed project info v. Appendix 2: Market information 8

9 Investment and Financial strategy Investment Strategy Mission To build a company with long-term employment, risk diversification and stable dividend capacity Target segments Supply vessels (AHTS and PSV) Offshore installations/subsea vessels Live Fish Carriers (LFC) Support vessels for the fish farming industry Minimum return on investment Minimum of 7,5% annual repayment of invested capital (target 10%) Minimum IRR of 15% over the investments lifetime (target 20%) Ordinary and preference capital structure to increase IRR Exit Put/call options, sales triggers or other exit mechanism Financial Strategy Sound financial profile Equity ratio of 25-35% at startup of project Long-term fixed contracts provide stable earnings through market cycles Stable dividend profile Secure financing ahead of committing to new transactions Diversify debt sources Bank debt Export Credit Agencies Bonds Strong existing bank relationship Established lending relationships with several banks IPO Shipsinvest AS strives for a listing within end 2016 conditional to minimum market cap of approx NOKm 500 9

10 Attractive portfolio of vessels M/V Havila Troll M/V Seacor Grant M/V Grand Canyon M/V Grand Canyon II M/V Roy Kristian Stand-by Rescue Vessel Anchor Handling Tug Supply Vessel (AHTS) Construction vessel Construction vessel Live Fish Carrier Since June 2010 Since July 2010 Since October 2012 Since April 2015 Since May 2015 Owner share: 70% Owner share: 30% Owner share: 25% Owner share: 34% Owner share: 100% M/V Christine M/V Inter Caledonia Live Fish Carrier Live Fish Carrier Since May 2015 Delivery December 2015 Owner share: 100% Owner share: 42,12% 10

11 Vessel contract coverage Vessel name Counterparty Contract Exit End of firm period Avg. annual dividend Expected IRR T/C security M/V Havila Troll Havila Shipping ASA Bareboat Purchase option June ,7 % 20,0 % Statoil * M/V Seacor Grant Chevron Cabinda Time Charter Sales trigger Sep ,1 % 20,0 % Chevron M/V Grand Canyon Canyon Offshore Ltd Time Charter Purchase option and sales trigger Oct ,7 % 17,5 % Canyon Offshore M/V Inter Caledonia Intership AS Bareboat Purchase option and sales trigger Dec ,4 % 20,0 % Marine Harvest M/V Grand Canyon II Canyon Offshore Ltd Time Charter Purchase option and sales trigger Apr ,7 % 18,5 % Canyon Offshore M/V Christine Intership Norge AS Bareboat Aug ,6 % 22,0 % Grieg Seafood M/V Roy Kristian Intership BC Corp Bareboat Dec ,7 % 22,0 % Marine Harvest * BB charterer have yearly purchase options June 16/17/18 = Contract period = Option period = Construction period 11

12 i. Introduction to Shipsinvest AS ii. Investment strategy iii. Key financials iv. Appendix 1: Detailed project info v. Appendix 2: Market information 12

13 Net repayments from investments Dividend IRR Vessel name Ownership 2011 (actual) 2012 (actual) 2013 (actual) 2014 (actual) 2015 (per Q2) Average for B/B chart period Expected (all shares) M/V Havila Troll 70 % 12,6 % 9,8 % 12,9 % 15,7 % 9,8 % 12,7 % 20,0 % M/V Seacor Grant 30 % 18,1 % 20,0 % 14,9 % 7,4 % 3,5 % 15,1 % 20,0 % M/V Grand Canyon 25 % 8,6 % 12,9 % 10,7 % 17,5 % M/V Inter Caledonia (from Q1 2016) 42 % 13,4 % 20,0 % M/V Grand Canyon II (from Q2 2015) 34 % 14,7 % 18,5 % M/V Christine (from Q2 2015) 100 % 13,6 % 22,0 % M/V Roy Kristian (from Q2 2015) 100 % 18,7 % 22,0 % Weighted average repayments from investments 14,2 % 12,8 % 11,6 % 13,1 % NA 14,1 % 19,5 % * * * * Net dividend to shareholders in Shipsinvest 9,6 % 11,1 % 11,4 % 10,0 % NA 14,1 % 19,5 % ** * Estimated annual average dividend throughout the firm contract period ** Higher expected relative IRR (25,1%) for ordinary capital due to a 14% IRR «cap» for preference capital (based on sale of all vessels after 8 years). 13

14 Key financials All figures in NOK Q (e) (after private placement) EBITDA Profit after tax Fixed assets (investments in SPC's) Current assets Total assets Equity Debt Total equity and debt Total cash payments recieved from investments Total cash payments to shareholders Dividend to shareholders in % of paid in equity 10,00 % 11,45 % 11,07 % 14

15 Company capitalization Capitalization per Q (estimate) Incl comitted investments Breakdown per asset NOK Book equity Net debt Cash Total capitalization Remaining investments Incl new investments M/V Troll M/V Seacor Grant M/V Grand Canyon M/V Inter Caledonia M/V Grand Canyon II M/V Christine M/V Roy Kristian Current assets Preliminary figures. To be updated. 15

16 Debt overview attractive long term financing in place Single Purpose Company Vessel name Original facility amount Outstanding amount Q Profile Interest rate Shipsinvest AS uncalled capital Sydvestor Troll AS/DIS M/V Havila Troll USDm 44,0 USDm 25,7 11 year LIBOR + 2,65% NA Seacor Grant DIS M/V Seacor Grant USDm 24,5 USDm 10,7 12 year LIBOR + 3,35% NA Volstad Construction AS M/V Grand Canyon NOKm 575 NOKm /15 year Approx. 6,0% fixed NOKm 14,1 Inter Caledonia AS M/V Inter Caledonia NOKm 150 NA 12 year NIBOR + 3,50% NA Volstad Construction II AS/KS M/V Grand Canyon II NOKm 585 NOKm /15 year Approx. 5,25% fixed NOKm 19,9 Christine AS M/V Christine NOKm 42,0 NOKm 42,0 12 year NIBOR + 3,25% NA Roy Kristian AS M/V Roy Kristian NOKm 48,7 NOKm 48,7 12 year NIBOR + 3,25% NA 16

17 Shipsinvest - Summary Attractive quarterly dividend and attractive IRR for ordinary capital due to a 14% IRR «cap» for preference capital Substantial contract backlog provides stability and visibility in future earnings and dividend capacity Significant deal flow underpins strong growth Management and BoD with extensive experience in sourcing and executing transactions 17

18 Ordinary capital (A shares) and preference capital (B and C shares) Share classes: o 63,19% of the company shares are ordinary shares («A» shares) o 36,81% of the company shares are preference shares (B and C shares) B and C shares are not entitled to sales proceeds on MV Havila Troll The preference capital: 1. Preferred dividend 10% annual 2. No right to vote 3. IRR cap 14% 4. Preference capital will be redeemed: o Listing (IPO) o After 4 years o Sales proceeds from vessel sales o Exit mechanism ( put/call) Preference capital gives a substantial upside for ordinary capital The existing investments have an IRR in the range of 17 22% B and C shares have a 14% IRR cap Based on this the A shares will get a average of approx 25% IRR on the existing portfolio based on 8 years project lifetime 18

19 i. Introduction to Shipsinvest AS ii. Investment strategy iii. Key financials iv. Appendix 1: Detailed project info v. Appendix 2: Market information 19

20 Sydvestor Troll AS Vessel and charter Vessel: M/V Havila Troll Type: Multi Field Standby Vessel (UT 527) Built: Yard: Havyard Leirvik, Norway Charterer: Havila Shipping ASA Charter: Bareboat charter Charter ends: June 2018 Purchase Options: 2016: USDm 43,1 + 30% * 2017: USDm 40,7 + 30% * 2018: USDm 38,3 + 30% * * 30% of difference between market value and option price Key figures Paid dividend: Annual average of 12,7% 2011: 12,6%, 2012: 9,8%, 2013: 12,9%, 2014: 15,7%, 2015: 9,8% pr Q2 Expected IRR: 20% Ownership: 70% Financing Lenders: DvB Bank Facility: USDm 25,7 Maturity: 2015 (2017) Repayment: 11 year profile 20

21 Seacor Grant AS/DIS Vessel and charter Vessel: M/V Seacor Grant Type: AHTS Built: Yard: Bender Shipbuilding & Repair Co., USA Charter: Chevron Cabinda Charter ends: Sep x1 year option Key figures Paid dividend: Annual average of 15,1% (2011: 18,1%, 2012: 20,0%, 2013: 14,9%, 2014: 7,4%, 2015: 3,5% per Q2) Expected IRR: 20% Ownership: 30% Financing Lenders: DvB Bank Facility: USDm 10,7 Maturity: 2016 Repayment: 12 year profile 21

22 Volstad Construction AS Vessel and charter Vessel: M/V Grand Canyon Type: Offshore Construction Vessel (ST 259 CD) Built: Yard: Bergen Group Fosen, Norway Charterer: Canyon Offshore Charter: Time charter Charter ends: Oct years option Key figures Paid dividend: Annual average of 10,7% (2013: 8,6%, 2014: 12,9%) Expected IRR: 17,5% Ownership: 25,0% Financing Lenders: Sparebank1 SMN and GIEK/Eksportkreditt Facility: NOKm 468 Maturity: 2024 Repayment: 12/15 year profile 22

23 Volstad Construction II AS/KS Vessel and charter Vessel: M/V Grand Canyon II Type: Offshore Construction Vessel (ST 259 CD) Built: Yard: Myklebust Verft AS, Norway Charterer: Canyon Offshore Charter: Time charter Charter ends: April years option Key figures Dividend: Annual average of 14,7% Expected IRR: 18,5% Ownership: 34,0% Financing Lenders: Sparebank1 SMN and GIEK/Eksportkreditt Facility: NOKm 585 Maturity: 2030 Repayment: 12/15 year profile 23

24 Roy Kristian AS Vessel and charter Financing Vessel: M/V Roy Kristian Type: Live Fish Carrier (LFC) Built: Charter: 5 year bareboat charter + 2x1 year option Yard: Sletta Båtbyggeri AS, Norway Charterer: Intership BC Corp Charter ends: Aug 2019 Key figures Dividend: 5 year estimated average of 18,7% Expected IRR: 22% Ownership: 100% Lenders: Sparebanken Søre Sunnmøre Facility: NOKm 48,65 Maturity: 2020 Repayment: 12 year profile 24

25 Christine AS Vessel and charter Vessel: M/V Christine Type: Live Fish Carrier (LFC) Built: Charter: 4 year bareboat charter Yard: Sletta Båtbyggeri AS, Norway Charterer: Intership Norge AS Charter ends: Dec 2018 Key figures Dividend: 4 year estimated average of 13,6% Expected IRR: 22% Ownership: 100% Financing Lenders: Sparebanken Søre Sunnmøre Facility: NOKm 42 Maturity: 2020 Repayment: 12 year profile 25

26 Inter Caledonia AS Vessel and charter Vessel: M/V Inter Caledonia (Hull 44) Type: Live Fish Carrier (LFC) Built: (newbuild) Charter: 7 year bareboat charter Yard: Besiktas Shipyard, Turkey Charterer: Intership AS Charter ends: Dec 2022 Options: Year 3 (MNOK 212,5), Year 4 (MNOK 210,0), Year 5 (MNOK 208,0), Year 6 (MNOK 208,0), Year 7 (MNOK 208,0) Key figures Dividend: 7 year estimated average of 13,4% Expected IRR: 20% Ownership: 42,12% Financing Lenders: Sparebank1 SMN/Sparebank1 Søre Sunnmøre Facility: NOKm 150 Maturity: 2020 Repayment: 12 year profile 26

27 i. Introduction to Shipsinvest AS ii. Investment strategy iii. Key financials iv. Appendix 1: Detailed project info v. Appendix 2: Market information 27

28 The Offshore Service Vessel Market Vessel services Platform Supply Vessels (PSV) Transport of cargo to and from offshore oil installations Supply of dry bulk, mud and other drilling fluids, food, containers, chemicals, etc. Cargo on deck in containers and under deck in tanks Some PSV`s are also designed for transport of pipes to Pipe Lay Vessels and Barges Vessels size is typically measured in square meter deck area and DWT PSV`s are needed during the entire lifetime of a offshore oil field exploration-, installation-, production- and decommissioning phase) The new MODU`s (mobile offshore drilling units) normal requirements of PSV`s service: Shallow water operation 1 x PSV (Small/mid sized) Deep water operation 2 x PSV (Medium to large) Deep water operation 2 x PSV (Medium to large) 28

29 The Offshore Service Vessel Market Vessel services Anchor Handler Tug Supply Vessels (AHTS) Rig moves - Tow rigs, platforms and barges that is not self propelled Anchor handling anchoring platforms at new spots when moved Supply of dry bulk, mud and other drilling fluids, food, containers, water, chemicals, etc. Cargo on deck in containers and under deck in tanks Vessels capacity is typically measured in bollard pull, Break Horse Power (BHP) and winch capabilities AHTS`s are needed during the entire lifetime of a offshore oil field (exploration-, installation-, production- and decommissioning phase) Rig move Moving an iceberg Anchor handling 29

30 The Offshore Service Vessel Market Vessel services Subsea Construction Vessels (SSCV) The services is performed by advanced, dynamically-positioned vessels designed and equipped for deepwater construction. The services are monitored by ROV and includes: o o o o o o o Pipeline construction and maintenance incl. lay of rigid and flexible pipes Flexible riser installation Bottom trenching Package lifts and deployment Reeled flowline installations Salvage and decommissioning Umbilical, jumper, flying lead and manifold installation Large vessels DP3 Large Deck Area Moon pool - ROV Hangar Big Crane Lifting Tower Pipelay equipment 30

31 Other Specialized Ship Markets Vessel services Live Fish Carriers (LFC) Live fish transport in closed valves combined with both refrigerated seawater system and UV technology Fully equipped/close valve vessels represent a unique transportation concept where the fish is transported directly from the net cages to the processing facilities in a closed environment Sea lice treatment technology Unique fish handling system Environmentally friendly ship concept; low fuel consumption, reduced use of chemicals The market for LFC s is growing along with the global fish farming industry. The salmon farming industry has increased focus on biosecurity, fish welfare and fish quality. This, combined with new and stricter regulations will require renewal and modernization of the global LFC fleet There is a total of 68 LFC s in the North Sea with a combined capacity of ~65 thousand m3 31

32 Summary of risk factors Risk relating to the business The Company depends on the performance of the charterers of its vessels for its operating cash flows The Company is exposed to operating, technical and certain other risks relating to the operation The Company may not be able to charter out its vessels at favorable terms following expiry or termination of the existing charter contracts Certain of the Company's vessels are subject to purchase options held by the charterer of the vessel, which, if exercised, could reduce the size of the Company's fleet and its future revenues The market value of the Company's vessels may decrease, which could limit the amount of funds which the Company can borrow, trigger financial covenants under the Company's borrowing arrangements, and lead to losses in the event of a vessel sale following a decline in market value The Company will need to refinance same or all of its financial indebtedness in the future, which it may not be able to do on favorable terms or at all A significant portion of the Company's borrowing arrangements have floating interest rates, and as a result interest rate fluctuations could negatively affect the financial performance of the Company Fluctuation in exchange rates could result in financial loss for the Company Certain of the lssuer's subsidiaries operate within the favorable Norwegian tonnage tax regime, which may be changed in the future The Company will from time to time be subject to commercial disagreements, contractual disputes and litigation with its counterparties and others which may not be resolved in its favor Certain of the Company's charter contracts, borrowing agreements and other instruments are subject to change of control provisions Risk relating to the industry As a substantial portion of the Company's fleet consists of oil-service vessels, the Company is exposed to the offshore oil industry, which is significantly affected by, among other things, volatile oil prices Uncertainty relating to the development of the world economy may reduce the demand for the Company' vessels, result in non-performance of contracts by its counterparties, limit the Company's ability to obtain additional capita! to finance new investments, or have other unforeseen negative effects Governmental laws and regulations, including environmental laws and safety regulations, may limit the activities of the Company's charterers and affect their ability to make charter-hire payments to the Company, reduce the vessel values and require capital expenditures for upgrades or modifications to the vessels, and expose the Company to liability Development and construction of new sophisticated, high-specification vessels could cause the Company's vessels to become less desirable to charterers The Company's vessels may be damaged or lost due to events such as marine disasters, environmental accidents, war, terrorism, piracy and other events Operating internationally subjects the Company to risks inherent in operating in foreign countries Maritime claimants could arrest one or more of the Company's vessels Risk relating to the shares The price of the Shares may fluctuate significantly There is no existing market for the Shares, and a trading market that provides adequate liquidity may not develop Future issuances of shares or other securities in the Company may dilute the holdings of shareholders and could materially affect the price of the Shares Investors in the United States may have difficulty enforcing any judgment obtained in the United States against the Company or its directors or executive officers in Norway The transfer of the Shares is subject to restrictions under the securities laws of the United States and other jurisdictions Shareholders outside of Norway are subject to exchange rate risk 32

33 Disclaimer This document is intended for general information purposes only and does not constitute solicitation of or an offer to participate in any investment. This document does not, nor does it purport to, constitute any form of investment advice, recommendation or independent analysis. Consequently it has not been prepared in accordance with the rules and regulations governing such publications. The information in this document is not, and does not purport to be, complete. No assurance can be given that the stated investment objectives will be achieved and the value of investments may fall as well as rise. Past performance is no guarantee for future returns. Shipsinvest AS, its directors, employees and consultants, do not accept any form of liability (whether arising in contract, tort or negligence or otherwise) for any error, omission or similar misrepresentation in this general information or for any loss or damage (whether direct, indirect, consequential or otherwise) suffered by the recipient of this information or any other person. The information is strictly confidential and should not be copied or circulated to anyone but the addressed recipients. 33