A planned US initial public offering by liner operator Zim Integrated Shipping Services could benefit another shipping company already listed in New York.
Danaos Corp, the Greek boxship owner, was listed in the IPO prospectus as the holder of nearly 10.2m shares in Zim.
That gives the John Coustas-led tonnage provider a 10.2% stake in Zim, an Israeli containership operator.
As TradeWinds has reported, Zim filed papers just before the year end to sell shares worth a potential $100m as it aims for a listing on the New York Stock Exchange.
The deal, if successful, would be the first shipping IPO in the US since 2018. According to some analysts, it could value the Israeli liner operator at some $1.5bn.
Danaos chief financial officer Evangelos Chatzis said the company welcomes the IPO move by Zim.
"We like this investment," he said of the company's stake, noting that Danaos believes the liner operator sector is expected to do well for the foreseeable future.
Chatzis said Danaos hasn't made any decision as to whether the shipowner will ultimately sell its Zim stake, but he noted that existing shareholders are locked in for six months after a successful IPO.
Value Investor's Edge lead researcher J Mintzmyer said preliminary estimates call for Danaos' stake in Zim to be worth $100m to $150m.
That could amount to $5 to $7.50 per Danaos share. Worth more than $22 apiece on the New York Stock Exchange on Monday, the company's shares could "easily hit the $30s" if the Zim IPO is successful and container markets remain strong, Mintzmyer said.
He does not believe much of the IPO is baked into Danaos' current share price, especially since the boxship owner's net asset value is estimated in the mid-$20 range without the Zim shares factored in and its earnings are expected to surge this year.
Danaos secured its stake in Zim, a charterer of its ships, through the Haifa-based operator's 2014 restructuring.
The Greek shipowner agreed to charter-rate reductions in exchange for what was then described as 7.4% of outstanding Zim shares, as well as $49.9m in unsecured notes.
"They have been patient holders since," Mintzmyer said.
In fact, Danaos has been a buyer. Chatzis noted that Danaos purchased more shares in Zim a few months ago,.
Zim's New York move, which is targeting the end of January, is the fourth IPO attempt by Zim since the Ofer family took it private in 2004, according to Norwegian investment bank Arctic Securities.
Idan Ofer's Kenon Holdings remains its largest shareholder.
Rare IPOs
The effort will be closely watched, as successful shipping IPOs have been rare over the last decade.
"The prospects of a shipping IPO may have seemed even more remote until Zim Integrated filed to go public on New Year's Eve," said Benjamin Nolan, an analyst at US investment bank Stifel.
"Still, the container market is strong, orderbooks are low for tankers and dry bulk, and with a little ray of demand optimism and probably a differentiated investment thesis, 2021 could be the year for open capital markets in shipping."
