Odfjell has secured new loans and may turn to bonds again for future finance — but only if the price is right.
Chief financial officer Terje Iversen said Wednesday that the Norwegian chemical tanker owner is "following the bond market".
"We may issue a new bond at some stage. We may also tap on existing bonds, if we find the price to be right for Odfjell," he said during the firm's second-quarter webcast to investors.
"But there's no need for us to be in any rush," he added.
Rising spot rates in the chemical tanker market helped Odfjell narrow its loss during the second quarter, as TradeWinds reported earlier today.
New loans
Oslo-listed Odfjell has secured what it described as "attractive financing" from three new facilities, which will provide $61m in liquidity.
This fresh cash will be used to pay down its $61m bond, which is due next month.
The company did not disclose its funding sources or provide more information but said the new financing has been secured at a much lower cost.
The $61m bond has a margin of 550 basis points above Libor, but the new financing's margin ranges from 250 to 320 basis points, Iversen noted.
The new funding will reduce Odfjell's total refinancing needs by $118m to around $62m for the three-year period from 2019 to 2021.
It will also lower the daily break-even rate for nine vessels being financed by $990 per day, which is due to improved amortisation profiles, Odfjell said.
Terminal sale proceeds
Cash from the lucrative sale of its stake in a bulk liquids terminal in China will also help buoy Odfjell's balance sheet in the near future, the company said.
Odfjell expects to book $21m in liquidity and a $14m capital gain during the third quarter, following the sale of its 55% stake in the Jiangyin terminal for $46m in July.
The group has raised a total of $365m in cash proceeds from selling its interests in terminals since 2016, chief executive Kristian Morch said during the webcast.
"That has helped us rebuild the balance sheet, refinance the bond and stand on a much stronger platform going forward," he said.
"The Jiangyin terminal was sold at 23 times Ebitda, which for any business is astonishing," he added.
The terminal's jetty system made the facility particularly desirable to the buyer, which is building an LNG export terminal adjacent to the site, Morch explained.
Private equity player Lindsay Goldberg, Odfjell's longstanding partner in its terminals business, is expected to have completed its exit from the joint venture by the end of 2019 on in early 2020.
As part of the restructuring of Odfjell's terminals business, its offices in Rotterdam and in Asia will close and a team will be established at the group's head office in Bergen, Norway.
New delivery
In the meantime, Odfjell is expecting delivery of the world's largest stainless steel chemical tanker on Monday, rather than today.
The six-day delay is "to make sure she is squeaky clean and nice when we get her," Kristian Morch, Odfjell's chief executive, said during the webcast today.
The vessel will be followed this year and next by five more stainless steel chemical carriers, which are under construction at Hudong-Zhonghua Shipbuilding in China.
