Hong Kong handysize and supramax owner Pacific Basin Shipping is looking forward to closer ties with old friends in Japan after a five-ship acquisition that made Imabari Shipbuilding and Tsuneishi Shipbuilding shareholders in the company.
But a further reported ultramax purchase is a mirage, says chief executive Mats Berglund.
This week brokers were reporting the sale of the Imabari-built, 61,200-dwt Seto Gloria (built 2016) to an unnamed Hong Kong owner for a reported $23.5m. However, this sale is part of the deal announced by Pacific Basin two weeks ago, in which vessel names were not disclosed.
The other ships in that package were the Tsuneishi Zhoushan-built, 58,000-dwt Kaya Manx and Catherine Manx (both built 2014); the Imabari Shimanami-built, 37,500-dwt Ipanema Beach (built 2014); and a 64,000-dwt resale at Tsuneishi Zhoushan Shipbuilding to be delivered in January.
Berglund declines to reveal the specific identities of the beneficial interests on the selling side but is authorised to describe them only as members of the Imabari group and "different ownership groups within the Kambara family", which controls Tsuneishi Shipbuilding. Both groups also have shipowning interests.
Reference sources had linked LT Ugland Bulk to two of the ships in the cash-plus-equity deal as well as the resale vessel, but TradeWinds now understands that the Norwegian company only acted as manager of the ships.
While the sales shrink the fleet Ugland has on the water, it has just taken delivery of the 63,800-dwt Mona Manx, the first in a series of five 63,000-dwt bulker newbuildings at Tsuneishi Zhoushan.
Buying the Ipanema Beach allows Pacific Basin to escape a relatively expensive time charter that would have run for four more years. The other four acquisitions allow it to improve its owned to chartered-in ratio in the supramax segment.
The $104.6m package cost Pacific Basin only $20.5m in cash and leaves the company with "dry powder" for further opportunistic purchases, but Berglund says the company is done for now with ambitious package deals.
"It would probably be one-off deals. We bought so much already that you should not expect anything massive from us," he told TradeWinds, pointing to three earlier purchases this year.
Berglund is pleased with the innovative structure of the deal, which he says strengthened rather than weakened the Pacific Basin balance sheet and gave the Japanese sellers much-needed motivation.
"They were probably hesitating to sell at these levels," he said. "But with the shares, they have exposure to the recovering charter market that the ships will trade in."
It also makes strategic partners out of two parties with whom Pacific Basin has had long-standing ties as shipbuilders and tonnage providers.
The selling interests had different levels of participation in the five ships, but in general the $104.5m deal price gave the new investors as a group $46.1m worth of Pacific Basin shares, or a 5.11% shareholding, plus $58.4m in cash. But most of the cash came from a $38m private placement with institutional investors, not from Pacific Basin funds or borrowings.
Although Berglund says Pacific Basin might pick up attractive secondhand candidates, he continues to rule out newbuildings. He remains hopeful that the segment below panamax, where the company trades, is currently protected from overbuilding by owners' uncertainty over which ship designs and equipment to invest in to satisfy environmental regulatory requirements.
