South Korea’s Polaris Shipping has recruited two banks to help with its initial public offering on the Oslo Stock Exchange.
A shipping source familiar with Polaris said the bulker owner has picked Pareto Securities and DNB as the global coordinators to carry out the listing aimed at raising as much as $1bn. The Seoul shipowner is said to have set its sights on the IPO taking place during the second half of this year.
“The fund raise will partially be used for the newbuildings it has on order,” the shipping source said.
Officials at Polaris declined to comment on the IPO.
News of Polaris planning to list in the Norwegian capital was first reported in TradeWinds earlier this month.
Polaris has been looking to list since 2013. Plans were foiled due to deteriorating financial markets and the sinking of the 266,100-dwt Stellar Daisy (built 1993) — a VLOC that was converted from a tanker, which went down off Uruguay on 31 March 2017 with the loss of 22 of its 24 crew.
Some market watchers have questioned whether Polaris’ listing plan will be affected by the weak dry bulk market, as well as capital markets that have proven all but closed to traditional shipping IPOs.
Some have said another complication is the recent discovery of the wreck of the Stellar Daisy.
A Houston-based subsea survey team, which had been searching for the ship on the request of the South Korean government and the families of the vessel's crew, was reported to have located the sunken ore carrier about 1,800 nautical miles (3,333 kilometres) due west of Cape Town, at a depth of 3,461 metres (11,355 feet). Human remains were also found during an inspection of the wreck.
However, the source familiar with Polaris said these factors would not impact the effort.
“Not at all,” the source said. “It should be given more attention to the fact that the company has shown relatively constant financial performance despite the sector downturn in recent years.”
The source said Polaris' 2018 revenue is expected to have hit the highest level in five years.
Meanwhile, there are also some concerns over Polaris' continued use of converted VLOCs built before 2000.
“Polaris has 17 newbuildings under construction and these vessels will replace some of the existing vessels,” the source said. “The newbuilding programme is crucial to the company as it will rejuvenate the fleet and it is the key to its growth.”
Polaris has a strong relationship with Vale. The company is said to have locked 18 VLOCs into long-term contracts of up to 25 years with the mining company in 2017.
The charter contracts are said to be behind the order for the same number of VLOC newbuildings that Polaris booked at Hyundai Heavy Industries between 2017 and 2018. Polaris has since taken delivery of four VLOCs and is slated to receive one more — to be named Sao Grace — in April. The remaining 13 units, which are “LNG ready”, are scheduled to roll out of dry dock between this year and 2021.
Besides the VLOC newbuildings at HHI, Polaris also has one 180,000-dwt capesize bulker under construction at China’s Shanghai Waigaoqiao Shipbuilding (SWS) and a pair of 210,000-dwt newcastlemaxes at New Times Shipbuilding. The three newbuildings are due for delivery in 2021.
Polaris was established in 2004 and its trading fleet of 35 bulkers is worth more than $1.2bn, with its 17 newbuildings priced at $1.41bn, according to VesselsValue.
