German tonnage supplier F Laeisz is set to become a substantial shareholder in Oslo-based Gram Car Carriers.
The transaction will see two Laeisz car carriers join the Gram fleet in a cash-and-shares deal.
The Laeisz vessels, the 5,000-ceu Passama and Passero (both built 2012), are changing hands in a deal that prices them at $61m together.
The transaction comes as Gram retools and postpones its plans for a stalled initial public offering, and cuts the valuation of its fleet, according to a report by Norway's daily business newspaper Finansavisen.
Hamburg-based F Laeisz did not immediately respond to a request for comment. An official at Gram confirmed to TradeWinds that a Finansavisen report of the transaction was "well informed".
A Norwegian financial source told TradeWinds there have been merger discussions for some time among Gram, Laeisz and other tonnage providers in the car carrier market towards consolidation, but the current deal represents an opportunity that emerged after the failure of Gram's IPO.
In November, the privately owned Norwegian company had to retreat from a planned $100m offering after investors proved lukewarm. Now the plan is to raise $60m in an IPO set for January at the earliest and scaled down to cover just the price of the two Laeisz ships.
In the new IPO, Finansavisen reported that Gram will cut the valuation of its 16-ship owned fleet from around $500m to $430m.
Gram's willingness to accept a steeper discount to net asset value from investors comes despite bullish news in the car carrier chartering market.
In October, in describing the prospects for the niche market, Gram chief executive Georg Whist presented a bullish take on supply and demand and told TradeWinds that the fleet of PCTCs will be unable to keep up with demand for some time to come.
Recent news in the niche trade has tended to confirm Whist's view, with Idan Ofer's Eastern Pacific Shipping recently extending the charter of the 6,302-ceu Lake Fuxian (built 2009) to Hyundai Glovis for three years at $38,000 per day. Eastern Pacific's 6,178-ceu Lake Geneva (built 2015) also fetched $40,000 per day in a six-month contract to the South Korean operator.
Laeisz too is accepting a discount to the market valuation in swapping its ships for Gram shares. VesselsValue estimates the Passama is worth $34.5m and the Passero $35.07m respectively, some $8.5m more than Laeisz gets in the deal.
Because the two Laeisz ships are debt-free and Gram's present fleet is substantially leveraged, the deal will give the German tonnage supplier something between a quarter and a third of shares in Gram, depending on how much of the deal is settled in cash.
Gram has a 70% financing lined up for the Passama and Passero but will seek to raise $60m to cover it in the new scaled-down version of the IPO, now planned for the first quarter of 2022.
