Proposed Plan to Change Rights Issue Timetable

The regulators is going to change the timetable for the Rights Issue especially on the schedule to get the vote from shareholders (AGM). Previously there has been a lot of problems with the AGM process because the AGM is conducted only after the regulators have approved on the content of the prospectus and therefore if regulator delayed the process, then the AGM timetable will need to change. As such, there are cases where one company has to revise its AGM dates for time and time again as there has been some changes on the content of prospectus.

This new plan will allow the company to announce and to conduct AGM on their intention to do Rights Issue first before any submission of prospectus is done. This will eliminate the change of AGM dates and will create more certainty on the AGM process and more certainty that the Rights Issue will be conducted before any submission to Regulator.

Basically this proposed plan will align the practice that has been done in the US and Spore market.

Stock Price Effect
The market was worried about the information effect on the announcement of Rights issue to the price of the stock and so far the announcement on the price of rights is only done prior to the AGM or just before the execution of the Rights Issue.

Timeline
We are yet to see the certainty on how long the AGM can be conducted prior to the Prospectus submission. In Spore case, a company can have blanket approval from shareholders and execute it within 2 years and the same goes to the US market. However, I would see such blanket approval may not be that long in this market. Most likely it will be 1 year as Regulator may worry that overspeculation in the stock can happen if the blanket approval is given too long. Well, we'll see.

The bottomline is we have been waiting for this regulation to be passed as it will shorten the process of Rights Issue by A LOT!!!!

Have a nice day! 

Chemical Tanker Explodes Off Malaysia

 

Chemical Tanker Explodes Off Malaysia, Fire Now Threatens Nearby Methanol Silo [UPDATED]

By Rob Almeida On July 26, 2012

The Bunga Alpina ablaze in Labuan, Malaysia

UPDATE (7/27/12): Bunga Alpinia Death Toll Rises to Three

Original (7/26/12): An explosion and fire, reportedly the result of a lightning strike, engulfed the Malaysian International Shipping Company (MISC)-owned, 38,000 DWT IMO II chemical/palm oil tanker, Bunga Alpinia, while inport Labuan, Malaysia. The fire broke out at approximately 2.30am (local time) while the vessel was loading methanol at the PETRONAS Chemicals Methanol Sdn Bhd terminal in Labuan.

MISC reports that the ship had 29 crew members, made up of 23 Malaysians and 6 Filipinos.  MISC has confirmed that one crewmember has been killed and another 4 are still missing.

Fires raged throughout the night as offshore supply vessels doused the fires with their water cannons.

Sources from the Maritime Response Coordination Centre (MRCC) told a local newspaper that as of 11am local time, rescue personnel were still trying to put out the blaze on the tanker.  The MRRC spokesman also noted their main concern now is to prevent the tanker from hitting the nearby methanol silo, located a mere 150 meters from the now adrift, and burning vessel.

Authorities fear that if the flames from the tanker ignite the methanol silo, it could result in massive destruction of the surrounding area.

“That is our biggest fear at the concern at the moment. An outcome like that would be catastrophic, to say the least,” said the source.  As a precautionary measure, PETRONAS Chemicals Group (PCG) has shut down its 660,000 tonne/year methanol (PML) 1 unit.

Additional images via perkapalanmalaysia.com

The Bunga Alpina ablaze

Shipping crisis to extend into 2013, says Moody's

Defaults among ship firms set to gather pace with tighter financing
(LONDON) The global shipping slump is expected to last well into 2013 as a glut of vessels and a growing credit squeeze will challenge even the toughest companies in the seaborne sector, Moody's Investor Service said on Wednesday.

Hard times: For crude tanker operators, sanctions imposed by the West over Iran's disputed nuclear programme would hurt as the country faces growing hurdles to sell its oil
Shipping companies, especially in the oil tanker and dry bulk sectors, already hit by worsening economic turmoil, weak earnings and oversupply ordered in the good times now face tighter financing as banks cut their exposure to risky and dollar denominated assets such as ship finance to meet tougher capital rules.

'Oversupply in both sectors is quite sizeable and we think that it will take 12 to 15 months to see the light at the end of the tunnel,' said Marco Vetulli, senior credit officer with Moody's, a ratings agency. 'All shipping companies sooner or later will be impacted by the situation,' he told Reuters.

Ship owners went on an ordering spree between 2007 and 2009 bolstered by earnings which saw rates in the bulk sector for larger capesize vessels, transporting iron ore and coal cargoes, reaching a peak of over US$230,000 a day in 2008 and over US$180,000 a day for crude oil supertankers.

Average capesize earnings reached just under US$6,000 a day this week and below operating costs, while supertankers have hit just over US$13,000 a day, slightly above operating costs.
'Companies were able to save liquidity thanks to very good years they had. But now, especially marginal players, will start to suffer and I am expecting an increasing number of defaults especially in dry bulk among marginal players,' Mr Vetulli said.

Mr Vetulli said despite reasonable iron ore and coal demand in China, one of the main drivers of dry bulk activity in recent years, fleet growth would continue to take its toll.
The Baltic Exchange's main index, which tracks rates to ship dry commodities, reached just over 780 points this week, off its peak in May 2008 of 11,793 points before financial turmoil battered the sector. 'I don't see the possibility for the main index to be above 1,500 points on average (this year),' Mr Vetulli said.

The ratings agency downgraded the shipping sector to negative from stable in July last year.
The crisis has already claimed casualties including Malaysia's Swee Joo Bhd, which went into bankruptcy last year.

PT Berlian Laju Tanker, Indonesia's largest oil and gas shipping group, last month defaulted on its US$2 billion debt.

Separately, General Maritime, which had filed for Chapter 11 bankruptcy protection in November, said in February that private equity firm Oaktree Capital Management will provide it with US$175 million in new capital under a restructuring plan.
Mr Vetulli said a sector recovery was more likely to take 15 months. 'It will be a painful process,' he said in an interview.

Soaring fuel costs and the eurozone crisis have also added to pressures faced by ship owners.
Mr Vetulli said ship scrapping had helped soak up some of the excess vessel availability in the dry bulk sector and the tanker market. Slow steaming, a method where ships slow their speed to cut fuel consumption, had also saved costs.

'Generally my perception is that tanker operators tend to be a little stronger from a (financial) liquidity point of view than dry bulk players but the level of problems in the market is very similar,' he said. 'For products tankers the fundamentals of the industry are a bit better and in 2013 it will be the first of the sectors to emerge from the crisis.'

For crude tanker operators, sanctions imposed by the West over Iran's disputed nuclear programme would also hurt as the country faces growing hurdles to sell its oil.
'It will change the normal trades globally. I think it may have a negative effect on the sector because this kind of geopolitical crisis is not, especially in that region of the world, a good scenario for this market,' Mr Vetulli said. 'Maybe some players will be able to make money out of it. But in general it will be negative for the industry.'

Danish shipping company Torm said last week its banks had agreed to extend until March 15 a suspension of repayments on its US$1.87 billion of debt to allow more time for talks aimed at finding a way out of its funding crisis.

Banks are expected to tighten credit lines to the sector.

'A lot of problems are related to covenants and liquidity. So things are getting more and more difficult,' Mr Vetulli said. -- Reuters

Sinochem Saves Dorval

Bankrupt Japanese chemical tanker owner operator Dorval Shipping hasbeen offered a lifeline from Chinese petrochemical trader Sinochem.

According to Japanese financial reports, under a plan tabled this week Sinochem will take a majority 51% shareholding in a new joint venture company to be named Dorval Sinochem Tankers.

Dorval will hold the remaining 49% stake. The deal includes Dorval’s in-house shipmanagement company.

Dorval applied for court protection in December last year after collapsing with some JPY 15bn ($192m) in debt. Its failure was blamed on overinvestment in new tonnage amid a moribund chemical tanker market, rising fuel costs and an appreciating domestic currency.

It has been attempting to rebuild its business under the Tokyo district court. The new planned joint venture remains subject to the court and creditor approval. A creditors meeting is due to be held in Tokyo next week.

Dorval was building four 19,800-dwt newbuildings at the Fukuoka and Usuki shipyards in Japan for delivery in 2011 and 2012. However it is understood the company has disposed of all its assets as part of the administration process and that the new joint venture will act initially as a pure operator rather than tanker owner.

The move will give Shanghai listed Sinochem the chance to expand in the chemical logistics business through Dorval’s expertise in the Asian Pacific market.

The Dorval Sinochem Tanker board will have two representatives from Sinochem and three from Dorval. The company will be headed by Dorval’s current president Tomohiro Yanagi.

Eitzen Chemical Losses Grow

Norwegian tanker owner Eitzen Chemical has posted a bigger loss for 2011, but sees a slight improvement in the first quarter of this year.

The Oslo-listed company said the net deficit was $154m last year, up from$113.8m in 2010.

Revenue climbed to $426.03m from$374.16m, but costs rose in line with this.

It performed an impairment test at year-end relating to its fleet and booked a $62.5m charge as a result.

The owner is still evaluating alternatives to ensure "adequate longer term financial strength and liquidity" ahead of a debt moratorium expiring in December.

It said that in the short term it expects a continued challenging chemical tanker market, but the first quarter of 2012 is expected to be moderately above the previous quarters.

The closure of its Team Tankers and City Class pools for vessels controlled by third parties should be completed during the first half of 2012 and is expected to improve cash flow.

The total book value of the company’s vessels was $995.1m as at 31 December, down from $1.08bn in the third quarter, while interest-bearing debt including finance lease obligations was $973.3m, down from $1bn in the previous three months.

Eitzen Chemical has 53 vessels, of which 49 are owned or on financial lease and four are on operational lease.

Chemical-tanker Trades Hit as Sanctions Halt Iran Veg Oil Imports

Chemical-tanker players are about to take another hit as the once lucrative trade in edible palm and soya oils into Iran dries up because of sanctions being imposed on the country.

Reports from Singapore and Malaysia this week indicate that vegetable-oil traders have stopped supplying Iran with palm oil over fears that sanctions against its banking sector will hinder importers’ ability to pay for the product.

Local press says traders in Singapore, where most deals involving Indonesian palm oil take place, have stopped taking Iranian letters of credit since the beginning of the year. Similar reports are emerging from Malaysia.

The two countries are the largest suppliers of palm oil to Iran, which in 2011 imported 650,000 metric tonnes of the commodity, according to statistics released by the US Department of Agriculture (DoA).

Traders in Asia give a higher volume, claiming Indonesian exports average 50,000 metric tonnes per month to Iran, with Malaysia supplying about 30,000 metric tonnes per month, giving a total of 960,000 metric tonnes per year.

This large volume of palm oil is mostly shipped in handysize chemical tankers, brokers tell TradeWinds.

Fears of non-payment are also taking its toll on Iran’s soya-oil imports as banks and traders in Canada, Argentina and Brazil are also said to be reluctant to accept Iranian letters of credit.

Iran is the world’s sixth-largest importer of soya oil, with the DoA reporting that the country imported 400,000 metric tonnes in 2011, a 43% drop from the 2010 figure of 704,000 metric tonnes.

Iran, with its population of 74 million, is heavily dependent on agricultural imports as its arable land and farming industry is not capable of meeting domestic food needs.

Sanctions are already affecting the country’s ability to import other agricultural products. Last week, it defaulted on payments for 200,000 tonnes of Indian rice, which prompted the All India Rice Exporters’ Association to call on members to stop exports to Iran based on credit.

Indian news sources said Iranian rice importers had defaulted on payments worth about $144m for the shipments, which were loaded at Indian ports in October and November.

Some of the Iranian rice was diverted but most remains on bulkers said to be sitting off the Iranian coast waiting for the payment problems to be sorted out.

Some vegoil traders believe Iran may resort to securing some of its palm and vegoil needs through third-party countries. It has done so in the past, mainly through traders based in the United Arab Emirates (UAE), who transhipped the cargoes at UAE ports.

Tanker brokers caution that while Iran might indeed be able secure supplies through third parties, it will still have trouble getting the oil into Iranian ports as most tanker operators nowadays are specifying no calls in charter contracts.

They also point out that the Iranian tanker fleet is geared toward crude-oil exports and therefore does not have the necessary IMO-II type chemical/products tankers required to carry vegoil cargoes by the International Bulk Chemicals Code.

The predicted growth in global demand for vegetable oils this year will help cushion the Iranian blow somewhat but brokers say the sudden loss of the country’s large volume of imports will still be hard for the chemical-tanker market to digest.

Clean & Chemical Tanker Market