In a $1.65bn deal Capital Product Partners LP and Diamond S Shipping are merging in a major consolidation in the product tanker space. The latest deal creates a platform for existing shareholders of Diamond S, which also include First Reserve a backer of shipping company IPOs in the 2005- 2007 boom period, to create liquidity.
It was bound to happen, sooner or later. Exactly a year ago, the day after 2016’s Election Day, at the Marine Money Forum in New York, someone asked Wilbur Ross, the keynote speaker whether he might join the Trump administration. Ross, a noted investor and Trump pal around the New York social scene, had advised Trump on various economic matters previously.
The maritime event season is in full swing, as the cold weather brought shipping people indoors. Marine Money’s 15th Annual Ship Finance Forum did not disappoint. A new organisation, the New York Maritime Consortium, which includes arbitrators, shipbrokers, financiers and a slew of lawyers, held a session, one day later, comparing and contrasting New York versus London and delving into how perceptions may not skew with actual realities.
Private equity investors continued their moves towards creating liquidity, the prelude to an exit transaction. Diamond S Shipping Group, put together by Wilbur Ross, best known as a distress investor, First Reserve, known for its forays into energy, and more recently, joined by Cargill, which swapped three product tankers for a piece of the company in late 2013, has filed a prospectus for an IPO in the product tanker sector.
The North American “Energy Renaissance” has propelled the future exports of LNG, not starting until 2016, to the front pages. Less well known among investors, but squarely on the map, is the LPG sector. The map is about to grow in a big way; with the Wilbur Ross- controlled Navigator Gas now set to launch an IPO, raising up to $200m in a deal led by Jefferies and Morgan Stanley.
Another week brought another announcement of a financial investor coming together with shipping veterans. This time it was WL Ross & Company getting together with a group of investors, including German shipowner Conti Group to form Nautical Bulk Holdings Ltd.
Where the overall shipping markets play a large role in the fortunes of individual shipping companies, for some the smartest guys in the room are quite often equity analysts. These brainy people work for capital providers who put together transactions that are then sold to institutional and/or retail investors.