Jovo Energy has won approval from the Chinese securities regulator for its initial public offering in Shanghai to fund an LNG carrier order.
The Guangdong-based gas trader secured the green light in late December after first submitting the IPO proposal in 2018, according to filings with the China Securities Regulatory Commission.
Jovo plans to issue up to 120m new shares on the Shanghai Stock Exchange to raise CNY 2.68bn ($415m), a filing said. The shares will be equivalent to 25% of the company’s enlarged capital.
China International Capital is the lead underwriter of the IPO.
“The money will be mainly used to fund our newbuilding investments in two LNG carriers and built our own fleet,” Jovo said. “The ships can enhance the shipping efficiency of our LNG business across the supply chain and meet Chinese demand for clean energy.”
In 2018, Jovo signed up for two 80,000-cbm newbuildings from compatriot Jiangnan Shipyard for CNY 2.11bn.
The LNG carriers will have a membrane-type cargo tank fitted with a GTT Mark III flex cargo-containment system.
TradeWinds understands that their construction is contingent on the IPO.
“Some money will also be used to replenish out working capital and improve our balance sheet,” Jovo said.
“We have limited ways of financing currently and have to rely on our own cash and borrowing.”
Jovo, one of the largest gas suppliers in South China, has been securing long-term supply from overseas producers in recent years.
Aside from importing LPG from various suppliers, the company sealed multi-year deals to procure LNG from Eni and MISC Berhad.
Jovo recorded a net profit of CNY 167m on revenue of CNY 5.42m during the first half of 2019. As of 30 June 2019, the company had total assets of CNY 3.58bn and liabilities of CNY 1.58bn.
Financial information for later periods is not available.
“It will be important for us to have deepsea shipping capacity to secure our cargo sources and supply downstream clients,” Jovo said.
“Our cargoes are sourced from Southeast Asia, the Middle East and Africa and we need to ship them to Lisha Island in Dongguan.
“For now we can only charter in vessels. But the international shipping markets are volatile and we urgently need our own fleet for logistics operations.”
Chinese media reported Jovo currently has four LNG carriers and one LPG vessel on period charters, including the 46,400-cbm Saga Dawn (built 2019), the 65,000-cbm LNG Lerici (built 1998), the 138,000-cbm Singapore Energy (built 2002) and the 145,000-cbm Methane Shirley Elisabeth (built 2007).
