— New rights issue to fund 8-ship acquisition
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Ocean Tankers Holdings, the only public company quoted in the ‘Shipping’ sector of the Cyprus Stock Exchange, expects the current oil crisis to benefit the company and propel profits from a projected USD 3,5 mln in 2007 to USD 20 mln next year.
With sea-going vessels accounting for 92% of all commercial transport, yet 24 times cheaper than any other mode of transport, the prospects for any tanker fleet are extremely favourable.
And with only 20% of the world fleet conforming to double-hull regulations that come into force on January 1, 2008, companies such as Ocean Tankers will be in great demand, which is why it is planning a USD 45 mln rights issue to partly fund the acquisition of eight oil tankers from Palmali Shipping.
The addition of the eight ships with an average age of six years, will double the fleet to 16 vessels, with the new ships having a 15,000 to 20,000 tonnes capacity, more than double the capability of the present fleet.
The new ships, that will carry the Maltese flag, are committed to Lukoil for a ten-year charter. The purchase value is set at USD 284 mln, underwritten by ABN Amro.
Revenue and profits too are expected to multiply, from USD 17.8 mln to about 60mln and from USD 3,5 mln to 20 mln, respectively, according to company officers.
Chairman and CEO Michael Ioannides said that an investor road-show is underway for the issue, with a subscription period of December to January 2008.
This is the second time that Ioannides is appealing to the market after the successful IPO that raised USD 13.4 mln to float the company last December. Since then, the fleet has doubled from three to six tankers of 4,500 to 12,000 tonnes capacity, while two newbuildings are expected to be delivered in the second half of 2008.
“We have maintained our commitment and are ahead of target to expand our fleet to 20 ships in three years,†Ioannides said.
He told an investors and fund managers briefing that the IPO was the first since 2000 and that he had confidence in the
“Shipping will always prosper, especially our segment of oil and chemical tankers,†Ioannides said, expressing his disappointment that more shipping companies had not listed on the CSE, despite the problem he faced earlier.
“One of the biggest benefits we don’t advertise much is that
“We have the know-how and the biggest ship-management companies are based in
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— Reduce stake to 55%
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Ioannides said that in order to ensure the success of the rights issue, he is prepared to give up some of his control over the company, reducing his stake from 70% held by his family, down to 60%, “or even 55%†he told investment fund managers. He is reiterating his support with a personal cash injection of USD 12 mln in the form of a loan.
However, some concerns were raised regarding the Admibros ship-management company which is wholly-owned by Ioannides and has an exclusive deal with Ocean Tankers, with one analyst suggesting that in the past some hotel owners maintained ownership of the hotel buildings and land in private hands, while the loss-making operation was left on the Exchange.
He explained that costs charged by Admibros are steady, while the higher revenue should come from the increased capacity of the expanded fleet.
During further questioning, Ioannides was asked why he sought to raise more funds from the market exactly twelve months from the IPO that collected a further USD 13,4 mln from the public.
The chairman of Ocean Tankers and Admibros said that only about 5% of the IPO was taken up by individual investors in
The company’s vice president and secretary, George Ioannides, said that five of the new acquisitions from Palmali are expected to be delivered between November and December and the remaining three by April next year.
He said that 70% of the contracts with Lukoil are charter-negotiated, while only 30% is variable, producing a stable dividend and securing the loan.
After the acquisition of the 125,000 GRT Palmali fleet, the enlarged Ocean Tankers fleet should be about 200,000 gross tones.
