Monday, April 2, 2012

"Wilbur Ross Plans Shipping Expansion as Industry Distress Grows"

From Bloomberg, March 30:
The chairman and founder of WL Ross & Co., who manages about $10 billion, is evaluating further purchases of oil- product tankers after last year participating in the acquisition of 30 of the vessels through Greenwich, Connecticut-based Diamond S Shipping. He’s also considering liquefied natural gas and liquefied petroleum gas carriers, he said by e-mail yesterday.

“The number of distressed shipping deals grows daily, mostly from individual owners of small numbers of ships,” Ross said. “We do expect further opportunities over the next 12 months. You never know where the exact bottom is until after the recovery has begun, but it is clear that we are already much closer to the bottom than the top.”

The combined market value of the world’s 80 biggest publicly traded shipping companies plunged by $101.7 billion in the four years to March 23, figures compiled by Bloomberg show. A glut of vessels cut earnings below levels that cover operating costs, triggering bankruptcies and loan breaches.

Ross and six investors who spent $900 million to buy the product carriers last year may deploy about $300 million more, Diamond S Chief Executive Officer Craig Stevenson Jr. said in interviews over the past 10 days. China Investment Corp., the nation’s sovereign-wealth fund, also backed that transaction.

Only Forced Sales
“The only sales around at the moment are forced sales,” said Stevenson, who headed OMI Corp. when the oil-tanker operator was bought for $2.2 billion including debt by Teekay Corp. and Torm A/S (TORM) in 2007. Banks that financed vessels are selling them at lower prices to get rid of them because owners are unable to pay, Stevenson said.

Any purchase of oil tankers would exclude the biggest, known as very large crude carriers, and the company isn’t seeking to buy ships that haul dry-bulk raw materials, according to Stevenson.

Vessels that haul liquefied gases may be attractive because fewer have been built, said Ross. Day rates for shorter-duration LNG-carrier (VSMVVLAN) charters rose above $150,000 this year, contrasting with slumps for oil tankers and dry-bulk carriers....MORE 
Mar. 27
Climateer Investing: Shipping: Wilbur Ross Buying Gasoline Tankers
Mar. 21
Climateer Investing: Watching Wilbur Ross Get a Spanking (AGO)
Mar. 7
Climateer Investing: Shipping: Wilbur Ross Buyiing Gasoline Tankers
Mar. 5
Natural Gas: Exco Resources Names Wilbur Ross to Its Board (XCO)

Mar. 14
Shipping: Pandora's Box Research Hatin' on Golar LNG Ltd. (GLNG ...
Feb. 27
Blackstone Takes a Flyer on Liquified Natural Gas (BX; CQP; LNG) 
Feb. 21
Climateer Investing: Shipping: Liquified Natural Gas Freight Rates ...