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Container ships: MPC making the difference in the equity chaos

In contrast to the worst stock market slump for nearly a decade, an owner of container ships managed to produce rather positive news. The private placement of MPC Container Ships has been successfully launched, even if the equity markets around the world suffered losses earlier this week.

Last Tuesday, MPC announced a securities sale, through which the company raised USD 75 Mn. This had been the most recent of a series of securities and debt issues. The company was launched last spring, having raised an initial USD100m capital in April. While going public, the company finalised an initial deal for eight vessels, with plans to take that number to 20 units. The rapid expansion has been rather impressive, with several vessels added to its fleet since then with a combination of single ship, en bloc and fleet deals. Executives publicly expressed their wish to reach 100 vessels while sighting a full listing in New York.

For the initial USD 100 Mn placement in the Norwegian capital markets that launched MPC, DNB Markets and Fearnley Securities supported the Oslo Stock Exchange-listed shipowner, acting as joint lead managers. Funds were provided from both Norwegian and international investors. The successful sale of the bond provided enough cash to allow the company to proceed towards buying more boxships to add to its expanding fleet. The debt is added to its existing USD 100 Mn senior bond due in 2022, carrying a floating interest rate of three-months’ LIBOR plus 4.75 per cent.

The company offered stock at USD 6.39 (NOK 50) per share, close to the levels for which MPC shares currently trade. After several second-hand vessel acquisitions during the last few months, the new capital could be put towards past or future deals. This has been a rather busy period for the company, with very high activity in capital markets going to fixed-income investors for a recent raising of USD 100 Mn. The company’s share capital of NOK 770 Mn was split into 77 Mn shares.

In connection with the placement, the board has set aside the pre-emptive rights of the existing shareholders, commenting, “The board of directors considers this to be in the best interests of the company and the shareholders since it will allow the company to raise capital more efficiently than a rights offering would allow.” The new shares will be issued on a separate registration number on the Merkur Market and will not be tradable on Oslo Axess stock exchange until the approval of a listing prospectus by the Financial Supervisory Authority of Norway, expected by around April 2018. For shipping experts, the current global sell-down has been considered a buying opportunity, since shipping has already been an undervalued industry for interested investors.

Focussing on recent SnP transactions, we once again have news about MPC continuing its acquisitions. This week, the company acquired the “DAHLIA” together with her sistership, the “CAMELLIA”, both of 2.8 k Teu and built in 2006. The price for the en bloc sale was USD 21.8 Mn. The Oslo-listed owner also purchased the “VIOLET” of similar size and delivery year, at a price of USD 10.5 Mn. MPC now owns a fleet of 44 vessels, including the latest additions. Physical delivery of the “VIOLET” will take place in the present quarter.

Greek owner Costamare is understood to have been behind the purchase of the 2005-built “CMA CGM L’ETOILE” of 2.6 k Teu for an undisclosed price. The vessel is geared with four 45T cranes.

Its compatriot, Merman Maritime, acquired a feeder, the 2002-built “DOROTHY TRADER” of 1.1 k Teu, which is geared with two 40 T cranes. No price has been disclosed so far.
Source: Affinity Research LLP (Fotios Katsoulas)

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