Newcastlemax owner Himalaya Shipping has joined Oslo's over-the-counter (OTC) market after completing a private placement of its shares.
The shipowner, which is backed by Tor Olav Troim, has confirmed its plans to target a public listing on the Oslo Stock Exchange by the end of this year.
The firm has issued 25m shares each with a par value of $1, which were listed in the OTC market on Tuesday under the ticker code HSHIP.
The shares were issued at a price of $3 each, giving Himalaya a market capitalisation of NOK 660.5m ($73.2m).
The company ordered 12 LNG dual-fuelled newcastlemax bulk carriers in January from China's New Times Shipbuilding for an average price of $68.8m each, including a dual-fuel system worth around $15m.
The newbuildings are scheduled for delivery from March 2023 until September 2024.
The 208,000-dwt ships are the same size as the eight units that Troim and co-investors ordered in 2017 at New Times for 2020 Bulkers.
Future with 2020 Bulkers
Troim confirmed that Himalaya aims to complete its debt and equity financing in the next few months and seek a listing on the Oslo Stock Exchange before the end of the year.
"Based on the current one-year forward rates and 75% debt financing, this is likely to create an equity yield of around 50% fully delivered," he commented in a press release.
He said that he sees "further potential for the company", based on the improved supply-demand outlook for newcastlemaxes in the coming years.
Himalaya has been set up in much the same way as newcastlemax owner 2020 Bulkers, which is also backed by Troim.
2020 Bulkers has signed an administrative services agreement with Himalaya and will provide technical supervision for the company.
It is thought that Himalaya and 2020 Bulkers are likely to have the same business model, with payments of monthly dividends.
Rising contract prices
Himalaya's investor presentation shows that contract prices have risen sharply since it ordered its vessels at the start of this year.
New Times is currently quoting a price of $77m for vessels of the same specification for delivery in late 2024, according to the document.
Tor Olav Troim, representing the company’s largest shareholder Magni Partners, said assets prices are moving up.
"Since we entered into the orders both newbuilding prices and yard availability has moved in our favour," he said.
"The strong increase in steel prices and the large amount of container orders have pushed newbuilding prices up by 10%-15% and pushed delivery slots out by 12-18 months."
"Our preliminary calculations show that the ship design should expect earnings of approximately 135%-140% of the capesize index and reduce bunker cost with more than $5,000 per day.
The issue price for Himalaya's shares gives an average implied price equivalent to $71.3m per ship.
