Rickmers Holding GmbH & Cie. KG, the parent of the Rickmers Group of shipping companies, intends to issue corporate bonds of up to 200 million euros ($258 million).
The Hamburg-based shipping company is looking to expand its containership
chartering business in the face of declining interest by many
traditional banks in the shipping industry and the collapse of the "KG"
system of limited partnerships in Germany that were used to finance many ships in the past.
Rickmers said net proceeds from the issue are to be used to finance growth and investments, and to refinance bank liabilities and refinancing costs.
"Rickmers Holding is a diversified shipping enterprise that has managed to secure profit in the face of the difficult market environment in the past few years. We have over the last two years built new capabilities, strengthened our management team and begun to position the group to take advantage of the opportunities that will come as the shipping industry begins to move towards recovery," said Ronald D. Widdows, chief executive officer of Rickmers.
He added "a structural change is taking place in the way shipping companies will
be able to finance their businesses. The traditional sources of equity
and debt financing that existed for many years, particularly in the
German ship owning community that built a large percentage of the world
container fleet, are no longer available, so positioning to attract new
investors, and access new sources of financing is critical."
"The shipping industry is in a phase of consolidation, and we are looking to play an active role in this market consolidation," said Bertram R. C. Rickmers, founder and sole shareholder of the Rickmers Group.
"Access to the capital market is one of the key factors for the future market position of a shipping company. In the past few years, we have aligned our internal structures to be fit for the capital market and now, with the bond, we're taking the next step in corporate financing," added Ignace Van Meenen, deputy CEO and chief financial officer of the Rickmers Group.
In 2012, the Rickmers Group achieved consolidated revenue of 618.3 million euros compared to 574.3 million euros in 2011. The company had earnings before interest and taxes (EBIT) of 114.7 million euros in 2012 compared to 90.5 million euros in 2011, and net earnings of 22.5 million euros in 2012 compared to 13.8 million euros in 2011.
Rickmers said the five-year bonds would be traded on the Frankfurt Stock Exchange and have a coupon rate between 8.5 and 9.125 percent.
In an article printed earlier this week in its Container Insight Weekly
newsletter, the London-based consultants Drewry said "collapse of the German KG ship financing system has left a hole in the small container vessel market which still needs to be filled, particularly as much of the fleet needs to be made more fuel efficient and environmentally friendly."
It noted "only 4 percent of the existing fleet of ships below 3,000 TEUs is on order. Though small, the vessels are the workhorses of intra-regional services, so the issue is concerning. They account for approximately 25 percent of the total cellular fleet capacity but, in terms of cargo carried, their share is far greater due to the shorter transit times of the shuttle services they provide.
"The sector remains dominated by German tramp vessel owners/charterers, but market conditions are no longer attractive enough for private investors, such as doctors and dentists, wishing to take advantage of the German KG tax incentives attached to vessel ownership," Drewry said.
"The implication is that alternative sources of finance need to be found to fill the gap, providing an opportunity for new players to step in whilst the market remains down," the firm explained. "It will be interesting to see who steps in apart from the Greeks, because few have an appetite for speculative trading these days." - Chris Dupin