Niels Stolt-Nielsen believes the time may now be right to re-examine his long-cherished aim of spinning off his company’s chemical tankers.
His Oslo-listed group Stolt-Nielsen has been talking about an initial public offering of Netherlands-based Stolt Tankers since 2017 — but the timing has never been right.
However, the company has just announced its best profit since 2007 in healthier tanker markets, and with asset values rising, the CEO faced inevitable questions about a listing from analysts on a conference call.
He said: “We have stated since 2017 that it is our intention at the right time to do an IPO [of] Stolt Tankers. But I felt that you need to have ... a recovering market before you do an IPO.”
VesselsValue rates the Stolt Tankers fleet as worth $1.1bn.
The CEO has previously said that returns have not been sustainable in chemical tanker shipping for two decades.
“I think that all the work that we’ve done even before the market recovered, and being more disciplined in what we build and what we buy and how we operate it ... we should be able to achieve a sustainable return based on what we control ourselves,” he told the call.
“But of course, with the improved market that we’re seeing now, I would think that the time will be right to again look at the potential IPO [of] Stolt Tankers.”
But he also said the group does not need to carry out a transaction.
“We are Stolt, basically. Our balance sheet is strong enough to support the growth and maintain our market position in all of our businesses,” he added.
Consolidation is the key
“But I’ve stated before that I think it will be healthy and good for Stolt Tankers to be a stand-alone publicly traded company.”
The main reason for this is to drive consolidation in a market he views as too fragmented.
“If you look at all the operators and all of the tonnage out there, we have a relatively small market share,” Stolt-Nielsen said.
“So there is room for consolidation. And the consolidation is so you can build and build scale. The only way we will be able to get our operating costs down and our utilisation up is to build scale.”
The group’s net profit in the three months to 31 May was $58.6m, compared with $7.8m a year earlier, as revenue grew from $526.9m to $689.1m.
It bought a 5% stake in chemical tanker rival Odfjell this year, prompting merger speculation.
