Stolt-Nielsen chief executive Niels Stolt-Nielsen has insisted a potentially costly US court ruling will not derail its tanker IPO.
The Oslo-listed group has been tipped to spin off its Stolt Tankers chemical carrier division in the second half of this year.
But the CEO fielded a heap of questions from analysts on the company’s conference call after the shipowner made a $155m provision following a US appeals court decision that confirmed it was partially responsible for the fatal fire on the 6,732-teu MSC Flaminia (built 2001) in 2012. Stolt-Nielsen had containers of chemicals on board the vessel.
Stolt-Nielsen was asked whether the ruling would affect the IPO in terms of investor sentiment.
He told the call: “This was an event that happened in 2012. The most important part for us is, of course, to learn from it.
“I don’t think that the Flaminia ruling will affect IPO. We will do an IPO at the right time and we will advise the market when we are at that time,” he added.
The spin-off of Oslo-listed Stolt-Nielsen’s chemical tanker fleet has been in the works since 2017.
Clarksons Securities has calculated an enterprise value of $2.5bn for Stolt Tankers.
VesselsValue has a valuation of $1.58bn on the 57 owned ships it lists for the company, although a total of more than 160 are operated through various other ventures.
The CEO was also asked if the provision would “destroy” the fourth-quarter dividend.
“I don’t decide the dividend, but I would think that if the company performs…we have made year-to-date net profit of $108m and I do expect that we will continue to make healthy profits in the third quarter and the fourth quarter,” he replied.
No reason not to pay dividend
“So I don’t see a reason why the company is not in a position to continue to pay dividends. Again, the level I don’t want to comment upon, but I think we have the liquidity, we have the balance sheet and we have the earnings to justify dividends,” he added.
Analysts also wanted to know about the timing of the provision.
“There is quite a bit of a limit on what I am in a position to say,” the CEO responded. “We took the provision this quarter, based on the advice that we get from our advisors.”
Stolt-Nielsen said he hoped the $155m figure was “a conservative number”.
“It might be less, but it might be also slightly higher. We don’t know yet. It’s too many moving parts. There are limits to what I can say. But needless to say, we will do everything possible to reduce and mitigate that number,” he added.
The CEO also stressed the ruling does not change the group's growth ambition.
“It’s horrible, this ruling. I think I don’t understand it, but we are working on it. But it kind of shows our strength that we’ve been able to take a hit like that and still be able to pursue our original strategy,” he concluded.
