New chemical carrier company Stainless Tankers intends to sell its newly acquired fleet “in a few years”, according to Clarksons Securities.
The Norwegian investment bank, together with Fearnley Securities, oversaw the private placement of shares that saw the Tufton-backed operation list on Oslo’s over-the-counter market on Wednesday.
Stainless Tankers is buying a fleet of seven J19 chemical tankers of around 20,000 dwt.
Clarksons Securities said the company has been founded “as an opportunistic play in the chemical tanker market”.
“The fleet is expected to be sold in a few years,” analysts Frode Morkedal and Even Kolsgaard said.
They added that dividends are seen as crucial for the company and all excess cash will be handed out to investors.
Morkedal and Kolsgaard said new debt of $65m from Macquarie Group gives “significant financial leverage”.
The vessels were acquired at a price near newbuilding parity, and the analysts believe the fleet’s value could increase given the current chemical tanker market conditions.
They peg cash break-even for the ships at $14,000 per day.
Although dividend growth in 2023 may be constrained by the need to accumulate cash reserves, Clarksons Securities is projecting a 19% yield in 2024, assuming average earnings of $21,000 per day for open days.
Each $1,000-per-day increase in spot rates ups the dividend yield by 3.5%, it calculates.
‘Compelling’ investment
“Overall, Stainless Tankers presents a compelling investment opportunity within the chemical tanker market as the first listed pure chemical tanker play,” the analysts said.
The investment bank has a “buy” rating on the stock and a target price of NOK 70 ($6.64).
UK investment manager Tufton has put in $10m of the $67m initial public offering cash, market sources said.
The vessels have not been identified, but they will be managed by Tufton.
The London group is listed with seven chemical tankers of between 19,000 dwt and 21,000 dwt, built from 2005 to 2009.
The IPO was carried out through a placement of 13.4m shares priced at $5.
