It is that booming Asia will in a decade push oil to $200/barrel and maybe $300/barrel.
The global financial crisis and Great Recession then sent oil crashing down to $40/barrel, saving them from facing up immediately to a future of scarce oil. But the global economy is now recovering, so that challenge must be faced.
The global recovery looks weak in Europe and North America, but is gathering steam in Asia. China, India and Indonesia look like powering ahead at 12%, 9% and 6% respectively in 2010-11. Other Asian countries are also buoyant. These developing countries are at a very energy-intensive stage of development. Booming Asia is sucking in commodity imports from Africa and Latin America, fuelling booms there too.
Slackness in rich countries has kept a lid on commodity prices, but the long-term trend is unambiguously upward. China has already overtaken the US as the world biggest consumer of cars and emitter of carbon. India is following in China’s footsteps, one decade removed. So, even if oil consumption is muted in the West, even if rich countries drastically reduce carbon emissions (which is doubtful), oil consumption will rise stridently in developing countries.
The world’s old oilfields are in steep decline, and large new oil discoveries offshore in Indonesia, Brazil, Mexico and Africa are in deep waters that will take time to exploit. Although Indonesia for example has started an ambitious project to increase its oil production from current mere 900k barrel per day to 1,000k barrel per day and has started offering offshore projects to oil majors, we still need to wait until such projects generate the much needed oil for consumption.
We now and will face another huge energy crunch, and need to adjust to that reality too.
There will be a shift to the usage of bio-related energy: biofuel, biodiesels, bioetahnol and other green products and this are imposed-driven usage by the relevant governments. There will be a growth in edible oil and vegetable oil markets. There will also be a move towards energy conservation e.g. farmers should switch from diesel pumps to electric ones. Cooking gas cylinders can be replaced by piped gas. Buses can switch to compressed natural gas. The poorest can get cash transfers through smart cards to reduce their fuel bills.
We must stop massive subsidies for a non-renewable and polluting resource. Instead, we must prepare for the coming reality of oil at $200/barrel.
Monday, 8 February 2010
Sunday, 7 February 2010
Indonesian shipping company brings $100 million CB
05 Feb 2010
Berlian Laju Tanker replenishes its coffers ahead of an expected convertible put in May and as it pursues the acquisition of a Norwegian liquid tanker company. Berlian Laju Tanker (BLT), a small-cap Indonesian shipping company, has raised $100 million from a five-year convertible bond that was well received by investors. The company is a true high-yield issuer -- it has a credit spread closer to 2,000bp than 1,000bp and a B rating from Standard & Poor's and Fitch -- and the shipping sector is still clouded by uncertainty, but the downside protection offered by the CB appeared to provide enough comfort to get investors to open their purse strings.
It would have helped, however, that the conversion premium was set at a modest 10% and there is a one-time reset after six months. The conversion premium and the coupon were both fixed at best terms for investors, in light of the fact that the orders were price sensitive.Even so, it is not a bad effort for a company with a market capitalisation of about $425 million to pull off a $100 million CB. According to a source, the deal was well oversubscribed at the original deal size of $75 million, allowing the bookrunners to exercise half of the available upsize option and increase the deal to $100 million.
Despite the upsize, the CB traded up to about 102 in late Asian trade yesterday and the share price also fared well, gaining 1.5% to Rs680.Slightly more than half of the demand came from Europe, with Asian investors contributing the rest. The split between outright and hedge fund investors was about 60:40, although with the CB being virtually unhedgeable, it is fair to assume that it was BLT's equity prospects that drove buyers' investment decisions, rather than the technical aspects of the bonds.Berlian Laju Tanker is in the process of trying to acquire Norwegian shipping company Camillo Eitzen & Co. If the transaction is successful, the deal would be transformational for BLT both in terms of size and improved business access. A liquid cargo specialist, BLT is already one of the largest chemical tanker operators in the world with a fleet that comprises 63 chemical tankers (plus 10 new-builds), 14 oil tankers and 13 gas tankers (plus four new-builds), according to an earlier filing by BLT. However, Camillo too is one of the largest owners of chemical ships in the world based on number of vessels, and also operates in other segments of the gas, bulk and tanker markets.Aside from this acquisition, BLT also has a need to raise fresh capital to cover the expected put in May of an outstanding $125 million CB, which is currently out-of-the-money.
The new CB was offered with a coupon between 10% and 12%, which was later fixed at 12%. The deal has a par-in, par-out structure, which means the coupon and then yield are the same. The premium was offered at 10% to 15%, and fixed at 10% over Tuesday's closing price of Rs670. Aside from the fact that it makes the deal more palatable to investors, the low premium was also a result of company wanting a deal that was as equity-like as possible. BLT had earlier indicated that it wanted to fund the Norwegian acquisition with an exchangeable that would be mandatorily converted into shares, but the regulators said no to that kind of structure
The bonds have a five-year maturity, but can be put back to the issuer after three years. There is also an issuer call after three years, subject to a 130% trigger.If the share price (specifically the volume-weighted average price) is trading below the conversion price six months after the closing of the deal, the conversion price will be reset to correspond to the market price, which is defined as the VWAP in the 20 days leading up to the six-month date. The reset cannot go below 80% of the conversion price at the time.
The CB was marketed with a credit spread of 1,600bp to 1,700bp, which was partly based on the spread of BLT's outstanding high-yield bond due 2014. Other assumptions included a 5% stock borrow cost and protection for dividend yields above 0.75%.According to the source, this gave a bond floor of about 85% and an implied volatility of 25%, numbers which were arrived at after taking the reset feature into account.J.P. Morgan was a joint bookrunner on the transaction together with RS Platou Markets. The latter firm is also acting as a financial adviser to BLT with respect to the acquisition of Camillo.
Source: Finance Asia
Berlian Laju Tanker replenishes its coffers ahead of an expected convertible put in May and as it pursues the acquisition of a Norwegian liquid tanker company. Berlian Laju Tanker (BLT), a small-cap Indonesian shipping company, has raised $100 million from a five-year convertible bond that was well received by investors. The company is a true high-yield issuer -- it has a credit spread closer to 2,000bp than 1,000bp and a B rating from Standard & Poor's and Fitch -- and the shipping sector is still clouded by uncertainty, but the downside protection offered by the CB appeared to provide enough comfort to get investors to open their purse strings.
It would have helped, however, that the conversion premium was set at a modest 10% and there is a one-time reset after six months. The conversion premium and the coupon were both fixed at best terms for investors, in light of the fact that the orders were price sensitive.Even so, it is not a bad effort for a company with a market capitalisation of about $425 million to pull off a $100 million CB. According to a source, the deal was well oversubscribed at the original deal size of $75 million, allowing the bookrunners to exercise half of the available upsize option and increase the deal to $100 million.
Despite the upsize, the CB traded up to about 102 in late Asian trade yesterday and the share price also fared well, gaining 1.5% to Rs680.Slightly more than half of the demand came from Europe, with Asian investors contributing the rest. The split between outright and hedge fund investors was about 60:40, although with the CB being virtually unhedgeable, it is fair to assume that it was BLT's equity prospects that drove buyers' investment decisions, rather than the technical aspects of the bonds.Berlian Laju Tanker is in the process of trying to acquire Norwegian shipping company Camillo Eitzen & Co. If the transaction is successful, the deal would be transformational for BLT both in terms of size and improved business access. A liquid cargo specialist, BLT is already one of the largest chemical tanker operators in the world with a fleet that comprises 63 chemical tankers (plus 10 new-builds), 14 oil tankers and 13 gas tankers (plus four new-builds), according to an earlier filing by BLT. However, Camillo too is one of the largest owners of chemical ships in the world based on number of vessels, and also operates in other segments of the gas, bulk and tanker markets.Aside from this acquisition, BLT also has a need to raise fresh capital to cover the expected put in May of an outstanding $125 million CB, which is currently out-of-the-money.
The new CB was offered with a coupon between 10% and 12%, which was later fixed at 12%. The deal has a par-in, par-out structure, which means the coupon and then yield are the same. The premium was offered at 10% to 15%, and fixed at 10% over Tuesday's closing price of Rs670. Aside from the fact that it makes the deal more palatable to investors, the low premium was also a result of company wanting a deal that was as equity-like as possible. BLT had earlier indicated that it wanted to fund the Norwegian acquisition with an exchangeable that would be mandatorily converted into shares, but the regulators said no to that kind of structure
The bonds have a five-year maturity, but can be put back to the issuer after three years. There is also an issuer call after three years, subject to a 130% trigger.If the share price (specifically the volume-weighted average price) is trading below the conversion price six months after the closing of the deal, the conversion price will be reset to correspond to the market price, which is defined as the VWAP in the 20 days leading up to the six-month date. The reset cannot go below 80% of the conversion price at the time.
The CB was marketed with a credit spread of 1,600bp to 1,700bp, which was partly based on the spread of BLT's outstanding high-yield bond due 2014. Other assumptions included a 5% stock borrow cost and protection for dividend yields above 0.75%.According to the source, this gave a bond floor of about 85% and an implied volatility of 25%, numbers which were arrived at after taking the reset feature into account.J.P. Morgan was a joint bookrunner on the transaction together with RS Platou Markets. The latter firm is also acting as a financial adviser to BLT with respect to the acquisition of Camillo.
Source: Finance Asia
Friday, 5 February 2010
New chief of Malaysia Petronas faces test of mettle
CAPITALS: The chief of Malaysia''s national energy giant Petronas is under pressure to prove he is more than an interim replacement for the respected and fiercely independent Hassan Marican who built it into a Fortune 100 company.
New Chief Executive Officer (CEO) Shamsul Azhar Abbas faces increasing government demands on the company''s coffers and from Malaysia''s oilـrich states for a share of revenues, but must also bolster global investments to fill declining domestic output, analysts say.The 57ـyearـold Britainـtrained former oil trader, who retired in 2009 after five years as Managing Director of shipping arm Malaysia International Shipping Corporation (MISC), will be chief executive and acting chairman of the board.
Malaysian media said the contract could be a brief one, while sources said it is normally on a threeـyear renewable basis, although Hassan held office since 1995.Other industry sources said the governmentـdriven succession planning process will continue, even as the company''s global business strategy stays intact.
"What we still have not heard about is how long his contract is going to be, which will be important as an indication of whether he will pursue his own strategy or will simply be a placeholder for the next man," said David Kiu, analyst at Eurasia Group.Petronas is the top contributor to the government''s budget, accounting for around half the country''s revenues.
"The company may be under intense pressure to give more as the government aims to trim its deficit, the deepest in more than 20 years in 2009 after dishing out significant fiscal stimulus packages," said Victor Shum from Purvin and Gertz."Indeed, Shamsul looks a safe choice ـ a Petronas man having had a long career with the company and having been in leadership positions in all key operating segments," said Shum.
"Considering Shamsul''s age, he certainly won''t be CEO for 15 years like Hassan. It looks like succession planning for a CEO will remain in high gear."Hassan in recent years had successfully campaigned for the government to cut fuel subsidies that have strained the company. He had also fretted over the need to invest more in technology, staff and global acquisitions to vie with equally ambitious countries such as China, South Korea, Japan and India.
"The key question is about the tension between running Petronas as a profitable company and using Petronas as an instrument for state policy," Kiu said.Question of independenceLeading up to the replacement of Hassan, who had run Petronas without much state encroachment in its decisionـmaking strategy in his 15 years as CEO, was the board''s move to block the appointment of one of the Prime Minister''s advisers as director.
One industry source familiar with Petronas said even if Premier Najib Razak were seen to be grooming the adviser, Oxfordـtrained Omar Mustapha, for the top job, this would take years since he is only 38 years old, though Hassan was 42 when he became CEO in 1995.Omar was appointed an independent, nonـexecutive director of Petronas last year.In the immediate future, the source said, there are concerns that Hassan''s top management team could also see some changes, including the post of chief financial officer.
Despite the issues of transition, industry sources said they did not think that Petronas debt, rated as a standalone entity by Standard and Poor''s, would be lowered from "AAـminus"."On the one hand, there will be changes to senior management who are more in line with the current climate while on the other, Petronas will also have to satisfy its bondholders that the new people are as capable as the previous ones, which are highly regarded," the source said.
Some analysts said while the issue of Omar''s appointment to the board could have soured ties between Hassan and Najib, Kiu said he did not see the Westernـoriented Shamsul, "bending over backwards for the government either".Analysts also pointed to his vast experience within Petronas since 1974, on a fastـtrack career which has carried him to several senior posts since his early 30s.
These included vice president of the international oil business, Vice President Petrochemicals, Vice President Exploration Upstream and Vice President Maritime and Logistics."The global strategy is crucial for Petronas in tackling the many challenges it faces," said Shum."These include reserves replacement in a very competitive climate, with major national oil companies and international oil firms competing for resources, refining and petrochemical profitability in a struggling economy and recruiting, training as well as retaining vast human resources," he added.
Analysts said Shamsul may also have to decide the role that Malaysia, the world''s 14th biggest gas producer, must play if it were invited to the Gas Exporters Forum, a group of 11 gas producers controlling nearly 70 percent of the world''s reserves.The loose group of pipeline gas and Liquefied natural gas (LNG) exporting countries is facing the first global drop in demand at a time when new production plants are coming onـstream to serve a US market that has lost interest.ـ
Reuters
New Chief Executive Officer (CEO) Shamsul Azhar Abbas faces increasing government demands on the company''s coffers and from Malaysia''s oilـrich states for a share of revenues, but must also bolster global investments to fill declining domestic output, analysts say.The 57ـyearـold Britainـtrained former oil trader, who retired in 2009 after five years as Managing Director of shipping arm Malaysia International Shipping Corporation (MISC), will be chief executive and acting chairman of the board.
Malaysian media said the contract could be a brief one, while sources said it is normally on a threeـyear renewable basis, although Hassan held office since 1995.Other industry sources said the governmentـdriven succession planning process will continue, even as the company''s global business strategy stays intact.
"What we still have not heard about is how long his contract is going to be, which will be important as an indication of whether he will pursue his own strategy or will simply be a placeholder for the next man," said David Kiu, analyst at Eurasia Group.Petronas is the top contributor to the government''s budget, accounting for around half the country''s revenues.
"The company may be under intense pressure to give more as the government aims to trim its deficit, the deepest in more than 20 years in 2009 after dishing out significant fiscal stimulus packages," said Victor Shum from Purvin and Gertz."Indeed, Shamsul looks a safe choice ـ a Petronas man having had a long career with the company and having been in leadership positions in all key operating segments," said Shum.
"Considering Shamsul''s age, he certainly won''t be CEO for 15 years like Hassan. It looks like succession planning for a CEO will remain in high gear."Hassan in recent years had successfully campaigned for the government to cut fuel subsidies that have strained the company. He had also fretted over the need to invest more in technology, staff and global acquisitions to vie with equally ambitious countries such as China, South Korea, Japan and India.
"The key question is about the tension between running Petronas as a profitable company and using Petronas as an instrument for state policy," Kiu said.Question of independenceLeading up to the replacement of Hassan, who had run Petronas without much state encroachment in its decisionـmaking strategy in his 15 years as CEO, was the board''s move to block the appointment of one of the Prime Minister''s advisers as director.
One industry source familiar with Petronas said even if Premier Najib Razak were seen to be grooming the adviser, Oxfordـtrained Omar Mustapha, for the top job, this would take years since he is only 38 years old, though Hassan was 42 when he became CEO in 1995.Omar was appointed an independent, nonـexecutive director of Petronas last year.In the immediate future, the source said, there are concerns that Hassan''s top management team could also see some changes, including the post of chief financial officer.
Despite the issues of transition, industry sources said they did not think that Petronas debt, rated as a standalone entity by Standard and Poor''s, would be lowered from "AAـminus"."On the one hand, there will be changes to senior management who are more in line with the current climate while on the other, Petronas will also have to satisfy its bondholders that the new people are as capable as the previous ones, which are highly regarded," the source said.
Some analysts said while the issue of Omar''s appointment to the board could have soured ties between Hassan and Najib, Kiu said he did not see the Westernـoriented Shamsul, "bending over backwards for the government either".Analysts also pointed to his vast experience within Petronas since 1974, on a fastـtrack career which has carried him to several senior posts since his early 30s.
These included vice president of the international oil business, Vice President Petrochemicals, Vice President Exploration Upstream and Vice President Maritime and Logistics."The global strategy is crucial for Petronas in tackling the many challenges it faces," said Shum."These include reserves replacement in a very competitive climate, with major national oil companies and international oil firms competing for resources, refining and petrochemical profitability in a struggling economy and recruiting, training as well as retaining vast human resources," he added.
Analysts said Shamsul may also have to decide the role that Malaysia, the world''s 14th biggest gas producer, must play if it were invited to the Gas Exporters Forum, a group of 11 gas producers controlling nearly 70 percent of the world''s reserves.The loose group of pipeline gas and Liquefied natural gas (LNG) exporting countries is facing the first global drop in demand at a time when new production plants are coming onـstream to serve a US market that has lost interest.ـ
Reuters
Thursday, 4 February 2010
Berlian Tanker plan to issue US$100 million convertible bonds
PT Berlian Laju Tanker Tbk offered convertible bonds with US$100 million guarantee with 5 years tenure and 12 percent yield per year to finance investment along the enactment of cabotage tenets in Indonesia.Berlian Laju has assigned J.P. Morgan and RS Platou Markets AS to execute direct private placement of the US$100 million convertible bonds maturing in 2015.
Finance Director of Berlian Laju Kevin Wong said the convertible bonds here will be issued at 100 percent value of the outstanding value and the close bookbuilding on February 10, 2010."The bond holders will have put option executable after three years on the closing bookbuilding," he said yesterday.
The early conversion price of the convertible bonds was IDR737 (assuming US$1=IDR9,362) and conversion premium of 10 percent above the reference share price or at IDR670.If the arithmetic average of the volume average above the ordinary stock price of the corporate within 20 days of trade prior to the six months after reset reference price is lower than the conversion price, the conversion price will be adjusted down to the reset reference price."But the adjustment is on any condition not under 80 percent of the conversion price."
The corporate official statement said the convertible bonds is convertible at any time after 41 days of the closing date up through to 10 days prior to due date and will be converted into ordinary stocks listed at the IDX as corporate equity.The fund from private placement will be allotted, among the other things, for investment for the more expansive implementation of cabotage tenet in Indonesia.
Cabotage tenet is the obligation for the transportation ship owner to use Indonesian flagged ship starting from January 1, 2010."Berlian Laju is on position to get profit from long term relation involving the company and Pertamina and other oil and gas operators to get contractual additional business," said Kevin.The fund could serve as the payment or debt buyback including the floating convertible bonds which are guaranteed by the company.
Head of Debt Capital Market of PT BNI Securities Sukartono said the bond coupon of Berlian Laju is very high and thus the corporate bonds should be sold out."However, on the other hand market players questioned the very high bond coupon up to 12 percent. what is behind the very high bond coupon?" he said.
Yesterday, the BLTA stock price rose 1.49 percent into IDR680.
Finance Director of Berlian Laju Kevin Wong said the convertible bonds here will be issued at 100 percent value of the outstanding value and the close bookbuilding on February 10, 2010."The bond holders will have put option executable after three years on the closing bookbuilding," he said yesterday.
The early conversion price of the convertible bonds was IDR737 (assuming US$1=IDR9,362) and conversion premium of 10 percent above the reference share price or at IDR670.If the arithmetic average of the volume average above the ordinary stock price of the corporate within 20 days of trade prior to the six months after reset reference price is lower than the conversion price, the conversion price will be adjusted down to the reset reference price."But the adjustment is on any condition not under 80 percent of the conversion price."
The corporate official statement said the convertible bonds is convertible at any time after 41 days of the closing date up through to 10 days prior to due date and will be converted into ordinary stocks listed at the IDX as corporate equity.The fund from private placement will be allotted, among the other things, for investment for the more expansive implementation of cabotage tenet in Indonesia.
Cabotage tenet is the obligation for the transportation ship owner to use Indonesian flagged ship starting from January 1, 2010."Berlian Laju is on position to get profit from long term relation involving the company and Pertamina and other oil and gas operators to get contractual additional business," said Kevin.The fund could serve as the payment or debt buyback including the floating convertible bonds which are guaranteed by the company.
Head of Debt Capital Market of PT BNI Securities Sukartono said the bond coupon of Berlian Laju is very high and thus the corporate bonds should be sold out."However, on the other hand market players questioned the very high bond coupon up to 12 percent. what is behind the very high bond coupon?" he said.
Yesterday, the BLTA stock price rose 1.49 percent into IDR680.
BLT Launches and Prices CBs Offering
BLT LAUNCHES AND PRICES OFFERING OF
US$100,000,000 12% GUARANTEED CONVERTIBLE BONDS DUE 2015
NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
PT Berlian Laju Tanker Tbk (“Company”) announces that it intends to issue, and has priced its private placement of, US$100 million 12% guaranteed convertible bonds due 2015 (“Convertible Bonds”). The Convertible Bonds will be placed with international professional and institutional investors outside of the United States (the “Private Placement”). The Joint Placement Agents for the Private Placement are J.P. Morgan Securities Ltd and RS Platou Markets AS.
The Convertible Bonds will be issued at 100 per cent of the principal amount and closing is expected to be on or around 10 February 2010 (“Closing Date”). The Convertible Bonds will have a maturity of five years and the holders will have the right to put on a date that falls three years after the Closing Date. The yield to put/maturity will be 12 per cent.
The initial Conversion Price of the Convertible Bonds is IDR 737 (with a fixed IDR/USD exchange rate of IDR 9,362/USD 1.00) and the conversion premium is 10 per cent above Reference Share Price (being the closing price on 02 February 2010 on the Indonesia Stock Exchange) at IDR 670. If the arithmetic average of the volume weighted average price of the Company’s shares for the period of 20 consecutive trading days preceding the date 6 months after the Closing date (“Reset Reference Price”) is less than the Conversion Price then in effect, the Conversion Price will be adjusted downwards to the Reset Reference Price, but in no event below 80% of the Conversion Price then in effect.
The Convertible Bonds will be exercisable at the option of the holders at any time from 41 days after the Closing Date until 10 days before maturity, and shall be convertible into ordinary shares listed on the Indonesia Stock Exchange in the capital of the Company.
The gross proceeds from the Private Placement will be used for, among others, investments in the expanding cabotage trade in Indonesia. BLT is positioned to benefit from the Company’s longstanding relationships with Pertamina and other oil and gas operators in Indonesia to capture additional contract business. The gross proceeds may also be used to repay or redeem existing debt, including outstanding convertible bonds guaranteed by the Company as well as general working capital purposes.
The securities have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the `U.S. Securities Act`), or any state securities laws, and will not be offered to any person investing from or in the United States or to any person acting on behalf of or for the account of such persons. The securities are offered outside the United States in reliance on Regulation S under the U.S. Securities Act. This press release shall not constitute a public offer as defined in Indonesian Capital Market Law, Law No. 8 of 1995 or as an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisidiction in which such offer, solicitation or sale would be unlawful.
Further details of the transaction will be announced in due course when the offering closes.
By Order of the Board
Kevin Wong
Director
Singapore, 2 February 2010
*****
PT Berlian Laju Tanker Tbk
BLT was established in 1981 and is a leading worldwide seaborne liquid cargo transportation specialist and one of the largest chemical tanker operators in the world. The BLT fleet comprises chemical tankers (63 vessels + 10 newbuilds), oil tankers (14 vessels), gas tankers (13 vessels +4 newbuilds) and 1 FPSO. In 2008, BLT had total revenues of USDm 723, an operating profit of USDm 182 and assets totaling USDbn 2.4. BLT is listed on the Indonesian and Singapore Stock Exchange (IDX ticker: BLTA.JK and SGX ticker: PTBL.SI) The company is headquartered in Jakarta (Indonesia) with operational offices in Westport (USA), Singapore, Hong Kong and Glasgow (UK) supported by marketing offices globally.
US$100,000,000 12% GUARANTEED CONVERTIBLE BONDS DUE 2015
NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
PT Berlian Laju Tanker Tbk (“Company”) announces that it intends to issue, and has priced its private placement of, US$100 million 12% guaranteed convertible bonds due 2015 (“Convertible Bonds”). The Convertible Bonds will be placed with international professional and institutional investors outside of the United States (the “Private Placement”). The Joint Placement Agents for the Private Placement are J.P. Morgan Securities Ltd and RS Platou Markets AS.
The Convertible Bonds will be issued at 100 per cent of the principal amount and closing is expected to be on or around 10 February 2010 (“Closing Date”). The Convertible Bonds will have a maturity of five years and the holders will have the right to put on a date that falls three years after the Closing Date. The yield to put/maturity will be 12 per cent.
The initial Conversion Price of the Convertible Bonds is IDR 737 (with a fixed IDR/USD exchange rate of IDR 9,362/USD 1.00) and the conversion premium is 10 per cent above Reference Share Price (being the closing price on 02 February 2010 on the Indonesia Stock Exchange) at IDR 670. If the arithmetic average of the volume weighted average price of the Company’s shares for the period of 20 consecutive trading days preceding the date 6 months after the Closing date (“Reset Reference Price”) is less than the Conversion Price then in effect, the Conversion Price will be adjusted downwards to the Reset Reference Price, but in no event below 80% of the Conversion Price then in effect.
The Convertible Bonds will be exercisable at the option of the holders at any time from 41 days after the Closing Date until 10 days before maturity, and shall be convertible into ordinary shares listed on the Indonesia Stock Exchange in the capital of the Company.
The gross proceeds from the Private Placement will be used for, among others, investments in the expanding cabotage trade in Indonesia. BLT is positioned to benefit from the Company’s longstanding relationships with Pertamina and other oil and gas operators in Indonesia to capture additional contract business. The gross proceeds may also be used to repay or redeem existing debt, including outstanding convertible bonds guaranteed by the Company as well as general working capital purposes.
The securities have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the `U.S. Securities Act`), or any state securities laws, and will not be offered to any person investing from or in the United States or to any person acting on behalf of or for the account of such persons. The securities are offered outside the United States in reliance on Regulation S under the U.S. Securities Act. This press release shall not constitute a public offer as defined in Indonesian Capital Market Law, Law No. 8 of 1995 or as an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisidiction in which such offer, solicitation or sale would be unlawful.
Further details of the transaction will be announced in due course when the offering closes.
By Order of the Board
Kevin Wong
Director
Singapore, 2 February 2010
*****
PT Berlian Laju Tanker Tbk
BLT was established in 1981 and is a leading worldwide seaborne liquid cargo transportation specialist and one of the largest chemical tanker operators in the world. The BLT fleet comprises chemical tankers (63 vessels + 10 newbuilds), oil tankers (14 vessels), gas tankers (13 vessels +4 newbuilds) and 1 FPSO. In 2008, BLT had total revenues of USDm 723, an operating profit of USDm 182 and assets totaling USDbn 2.4. BLT is listed on the Indonesian and Singapore Stock Exchange (IDX ticker: BLTA.JK and SGX ticker: PTBL.SI) The company is headquartered in Jakarta (Indonesia) with operational offices in Westport (USA), Singapore, Hong Kong and Glasgow (UK) supported by marketing offices globally.
Wednesday, 3 February 2010
Ships scrapping activity to double in 2010 says Clarkson
Wednesday, 03 February 2010
In a positive note for the overcapacity problems of the global fleet, leading research house Clarkson said that total scrapping activity is expected to more than double during 2010, surpassing the 60 million tons mark. During 2009, which also recorded one of the fastest pick up of demolition activity, a total of 29.88 million tons of vessels was scrapped. Lower freight rates and a huge orderbook in most ship types across the industry led many ship owners to scrap their older vessels, in an effort to pave the way for their expected new buildings.
Based on Clarkson figures the 2009 scrapping figures were the highest in a decade as 246 dry bulk carriers were scrapped, together with 188 tankers and 180 container ships. Their average age stood at 29 years old. Just for comparison 2008 saw the scrapping of just 377 ships with a capacity of 13.2 million tons, with an average age of 30.5 years old, a bit higher than those scrapped last year. In fact, most of them leaving the world’s fleet during the last quarter of the year, when the economic crisis broke out, leaving the shipping industry stunned. Scrapping figures from other sources vary, but it seems that approximately 30-35 million tons of shipping capacity left the fleet last year.
According to shipbroker consultants N. Cotzias Ltd., 34.6 million tons of carrying capacity were removed from the market. During the whole of 2009, India got the lion’s share in terms of units acquired with 473 ships, China came in second place with 271 units, Bangladesh was third with 211 units and Turkey finished in fourth place with 105 units. Average prices for the whole year were around the $270 per ton mark and that number includes the price offered by Turkey.It is worth noting that over the last 12 months (and despite the huge increase in ships sold for recycling) prices in all markets have recorded substantial increases: India +43%, Bangladesh +38%, Pakistan +29% and China +43%.
These prices could prompt even more owners around the world to move forward into 2010 with new deals, as many analysts have feared a potential oversupply of tonnage. As Hellenic Shipping News Worldwide earlier reported, the trend set last year in terms of scrapping deals, should be maintained, in order for the market to recapture its balance and together with an increase of trade activity set its sights at higher levels of freight rates and thus earnings for ship owners.
This prediction coming from reputed analysts seems to be verified. Estimates from Cotzias indicate that a rather hefty 1,812 dry bulk carriers are expected for delivery from shipyards during 2010, versus a mere 593 vessels last year, when many owners delayed their deliveries. Newbuilding deliveries are expected to drop back at 1,255 in 2011, before returning at healthier levels with 476 scheduled deliveries in 2012 and 101 in 2013, although there’s still plenty of room for these numbers to increase, as owners could return to placing orders by the second half of 2010. But, at the same time, Clarkson estimated that 2010 could very well be the year when iron ore trade will surpass the 1 billion ton mark, an unprecedented record.
In a positive note for the overcapacity problems of the global fleet, leading research house Clarkson said that total scrapping activity is expected to more than double during 2010, surpassing the 60 million tons mark. During 2009, which also recorded one of the fastest pick up of demolition activity, a total of 29.88 million tons of vessels was scrapped. Lower freight rates and a huge orderbook in most ship types across the industry led many ship owners to scrap their older vessels, in an effort to pave the way for their expected new buildings.
Based on Clarkson figures the 2009 scrapping figures were the highest in a decade as 246 dry bulk carriers were scrapped, together with 188 tankers and 180 container ships. Their average age stood at 29 years old. Just for comparison 2008 saw the scrapping of just 377 ships with a capacity of 13.2 million tons, with an average age of 30.5 years old, a bit higher than those scrapped last year. In fact, most of them leaving the world’s fleet during the last quarter of the year, when the economic crisis broke out, leaving the shipping industry stunned. Scrapping figures from other sources vary, but it seems that approximately 30-35 million tons of shipping capacity left the fleet last year.
According to shipbroker consultants N. Cotzias Ltd., 34.6 million tons of carrying capacity were removed from the market. During the whole of 2009, India got the lion’s share in terms of units acquired with 473 ships, China came in second place with 271 units, Bangladesh was third with 211 units and Turkey finished in fourth place with 105 units. Average prices for the whole year were around the $270 per ton mark and that number includes the price offered by Turkey.It is worth noting that over the last 12 months (and despite the huge increase in ships sold for recycling) prices in all markets have recorded substantial increases: India +43%, Bangladesh +38%, Pakistan +29% and China +43%.
These prices could prompt even more owners around the world to move forward into 2010 with new deals, as many analysts have feared a potential oversupply of tonnage. As Hellenic Shipping News Worldwide earlier reported, the trend set last year in terms of scrapping deals, should be maintained, in order for the market to recapture its balance and together with an increase of trade activity set its sights at higher levels of freight rates and thus earnings for ship owners.
This prediction coming from reputed analysts seems to be verified. Estimates from Cotzias indicate that a rather hefty 1,812 dry bulk carriers are expected for delivery from shipyards during 2010, versus a mere 593 vessels last year, when many owners delayed their deliveries. Newbuilding deliveries are expected to drop back at 1,255 in 2011, before returning at healthier levels with 476 scheduled deliveries in 2012 and 101 in 2013, although there’s still plenty of room for these numbers to increase, as owners could return to placing orders by the second half of 2010. But, at the same time, Clarkson estimated that 2010 could very well be the year when iron ore trade will surpass the 1 billion ton mark, an unprecedented record.
Tuesday, 2 February 2010
Supertanker rates may jump 75%: broker
Tuesday, 02 February 2010
The cost to move crude oil from the Arabian Gulf to the U.S. Gulf Coast using supertankers may jump 75 percent this year as the fleet declines, according to shipbroker Charles R. Weber Co. Rates on the voyage for very-large crude carriers, or VLCCs, will rise to an average US$21,000 a day from last year's US$12,000, according to Weber, based in Greenwich, Connecticut.The broker said 71 new VLCCs are scheduled to be delivered this year and 75 older ships will be scrapped. There are currently 540 VLCCs in service, according to Weber."The lower level of fleet growth seen on VLCCs will likely help to support rates this year," said George Los, an analyst at Weber. An expanding fleet of medium-sized tankers "is undoubtedly going to cap any gains" in rates for those ships.The number of medium-range tankers, which are used to ship gasoline to the U.S. from the Caribbean and Europe, is projected to rise 11 percent to 1,379 this year from 1,246 in 2009, according to Weber.Rates to use the smaller tankers in the Caribbean market may average US$6,750 a day this year, up 8 percent from US$6,250 a day in 2009, according to Weber.VLCCs, which are primarily used to move crude oil, can carry more than 1.46 million barrels of oil. Medium-range tankers can carry 340,000 to 467,500 barrels of gasoline.Rate increaseVLCC rates for shipments to the U.S. Gulf Coast from the Arabian Gulf stood at Worldscale 70 yesterday, or about US$44,000 a day after fuel costs, according to data from New York-based shipbroker Poten & Partners. The rate fell 69 percent last year from 2008 to an average WS 29.41 as oil demand dropped during the worst global recession since World War II.Worldscale points are a percentage of a nominal rate, or flat rate, published by the Worldscale Association in London.Tanker rates got a boost earlier this month as cold weather delayed shipments and raised demand for heating oil. The rally was "just a seasonal strengthening," Jonathan Chappell, an analyst at JPMorgan Chase & Co., said in a report Jan. 22. Prices are "expected to ease substantially through the spring and summer."Weber estimates a 9.6 percent increase in the fleet of Suezmax tankers, which can carry 876,000 to 1.46 million barrels of crude. The broker said 54 new Suezmax tankers are expected to be delivered this year and 16 may be scrapped.
Source: Bloomberg
The cost to move crude oil from the Arabian Gulf to the U.S. Gulf Coast using supertankers may jump 75 percent this year as the fleet declines, according to shipbroker Charles R. Weber Co. Rates on the voyage for very-large crude carriers, or VLCCs, will rise to an average US$21,000 a day from last year's US$12,000, according to Weber, based in Greenwich, Connecticut.The broker said 71 new VLCCs are scheduled to be delivered this year and 75 older ships will be scrapped. There are currently 540 VLCCs in service, according to Weber."The lower level of fleet growth seen on VLCCs will likely help to support rates this year," said George Los, an analyst at Weber. An expanding fleet of medium-sized tankers "is undoubtedly going to cap any gains" in rates for those ships.The number of medium-range tankers, which are used to ship gasoline to the U.S. from the Caribbean and Europe, is projected to rise 11 percent to 1,379 this year from 1,246 in 2009, according to Weber.Rates to use the smaller tankers in the Caribbean market may average US$6,750 a day this year, up 8 percent from US$6,250 a day in 2009, according to Weber.VLCCs, which are primarily used to move crude oil, can carry more than 1.46 million barrels of oil. Medium-range tankers can carry 340,000 to 467,500 barrels of gasoline.Rate increaseVLCC rates for shipments to the U.S. Gulf Coast from the Arabian Gulf stood at Worldscale 70 yesterday, or about US$44,000 a day after fuel costs, according to data from New York-based shipbroker Poten & Partners. The rate fell 69 percent last year from 2008 to an average WS 29.41 as oil demand dropped during the worst global recession since World War II.Worldscale points are a percentage of a nominal rate, or flat rate, published by the Worldscale Association in London.Tanker rates got a boost earlier this month as cold weather delayed shipments and raised demand for heating oil. The rally was "just a seasonal strengthening," Jonathan Chappell, an analyst at JPMorgan Chase & Co., said in a report Jan. 22. Prices are "expected to ease substantially through the spring and summer."Weber estimates a 9.6 percent increase in the fleet of Suezmax tankers, which can carry 876,000 to 1.46 million barrels of crude. The broker said 54 new Suezmax tankers are expected to be delivered this year and 16 may be scrapped.
Source: Bloomberg
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