Giant US private equity fund Oaktree Capital management is poised to take a big stake in Norwegian shipowner Golden Energy Offshore Services (GEOS).
The fund has been awarded warrants for shares that could see it build a 50% holding in the Oslo-listed platform supply vessel (PSV) operator in a further sign that the offshore vessel recovery is well under way.
The move is part of a long-term finance deal for two PSVs built in China.
Oaktree, a big shipping investor with stakes in Torm, OSM Maritime and Hafnia, is providing $45m to fund the 4,000-dwt Energy Empress and Energy Duchess (both built 2019).
The units were bought under hire-purchase bareboat agreements from Chinese shipbuilder Nantong Rainbow Offshore & Engineering Equipment (ROC).
Oaktree’s financing comes in the form of senior secured credit facilities worth $45m maturing over five years, and an uncommitted accordion tranche of up to $35m that would be available for “future growth opportunities”.
GEOS made a down-payment of $2m to ROC in June, with the balance of $14.75m per ship due on 15 July.
GEOS chief executive Per Ivar Fagervoll said in June he believed rebounding oil and gas support ship markets would help its vessel refinancing efforts.
The company added a secondary listing on the US over-the-counter OTCQB market in April to expand its shareholder base.
He had also revealed that the largest shareholder, which he did not name, was based in the US.
Ship values set to rise further
Fagervoll argues ship values are set to rise further as fleet supply remains limited.
The CEO said there are “long, long lead-in times” for new vessels, and increasing steel prices have made any new ships more expensive.
Fagervoll said owners used to wait 12 months to get their hands on an offshore newbuilding.
Now this is up to 30 months, he said. “It’s a huge difference,” the CEO added.
Fagervoll believes this will have a “significant impact” on the secondhand values of existing vessels.
From the start of the year to June, the value of the four-ship GEOS fleet increased at least 20%, according to the CEO.
