It has now been over three years since a shipowner has successfully completed an initial public offering (IPO) in New York. John Michael Radziwill’s dry bulk company GoodBulk is the latest to attempt to break the losing streak – and the latest to have failed.
The investor roadshow began on 18 June and was expected to conclude on 27 June. On the night of 27 June, the company issued a statement acknowledging, “As a result of adverse market conditions, it has ceased marketing of its proposed initial public offering of its common shares, which had been expected to be listed on the NASDAQ Global Select Market. The company will evaluate the timing for the proposed offering as market conditions develop.”
GoodBulk had sought to raise USD140 million through the sale of 8.5 million common shares priced at USD15.50-17.50/share. It had intended to use IPO proceeds to purchase five 2011- to 2014-built Capesizes for USD178.75 million. According to data from Sea-Web, the potential acquisition vessels are owned by JP Morgan Global Maritime.
During a roadshow presentation seen by Fairplay – which ultimately failed to sway enough investors to buy in at an acceptable price – Radziwill made an impassioned argument that now is the time to bet on a dry bulk recovery.
“I’ve grown up in shipping. I’ve seen the swings up and down and what I can tell you – hand on heart – is that right now, I have never seen a stronger inflection point in a bulk market,” he said. “I’ve never seen a period of time where you’ve gone through excess supply, where there’s been a big reaction to supply, and you have a clear line of sight on the demand over the next 18 months and you can’t put any more new ships into the market, so we think you’re going to have a real shortage going forward.
“We also think that IMO 2020 [the fuel sulphur cap] is the best thing that has ever happened to the bulk shipping market, because if you believe in a high fuel price, then you should believe in a high freight market, because with a high fuel price, ships slow down, and when ships slow down, supply comes out of the market, and when supply comes out of the market, rates go up – so we’re very positive.”
GoodBulk was one of two Oslo over-the-counter-listed companies that were seeking to make the jump to the New York public arena. The second is Navios Containers, backed by Angeliki Frangou, who already has four shipping companies listed in New York. Navios Containers has yet to set a target price or begin its roadshow.
The outcome of the GoodBulk and Navios Containers IPO attempts have been characterised as an important bellwether for shipping’s prospects in the US public markets. During a panel discussion on 20 June at the Marine Money Week conference in New York, Reed Smith partner Greg Chase noted, “There’s a clear litmus test in the market. We’ll have to see what happens.”
Commenting on broader prospects for 2018, UBS Investment Bank managing director Simon Smith pointed to the GoodBulk and Navios Containers outcomes. “I think it’s going to depend a lot of what happens in the next 10 days or two weeks,” he said on 20 June, referring to the upcoming roadshows and pricings. “I think that’s going to give us a good feel for how the year might shape up in the IPO market – because people are going to look at these two transactions very, very closely.”
Source: fairplay.ihs.com / By Greg Miller