No Title AMA Capital Partners by alicejenny

VIEWS: 2 PAGES: 34

									The Maritime Merchant Banking Firm

           www.amausa.com
                    Index

   Our View of the Market

   A Brief Overview of AMA

   Current Assignments and Representative
    Completed Transactions

    Appendix
    - Detailed AMA Structure
    - Staff Biographies
Our View of the
    Market
    We recognize shipping to be an extremely
    volatile business, where timing can be everything
                                                                                                Comparison of Historic Shipowner Costs and
                       Shipping Cycles                                                             Freight Rates for a Capesize Vessel

                                                                                                                    1990 Built
                                                                                                                                                                    1995 Built
                         Economic & Regulatory Shocks                                       $20,000                  vessel
                                                                                                                                                                     vessel


                                                                                            $18,000
                               Market Comes                                                                                                                                                               Cost Curves
                               Back in Balance                                                                                                                                                               based
 VALUE
                                                                                            $16,000                                                                                                      on year of build
CREATION                                                 Economic
                                                         Pain -                             $14,000
                                                         Older Ships




                                                                              $US Per Day
                                                         Scrapped or
                                                         Layed-up                           $12,000
       Freight Rates
       Adequate to
       Support                                                                              $10,000
       Capital
       Investments                                            Oversupply                    $8,000
                                                              of Capacity                                                                                                   1986 Built
                                                              Leads to                                                                                                       vessel
                                                              Decline in                    $6,000                      Freight Rates –
                                                              Freight Rates                                              1 yr Capesize
                                                                                                                               TC
                                                                                            $4,000
                                                                                                                                                               Costs (Operating, Capital, and Profit)
                                                                                            $2,000                                                             Revenues
                   Shipowners                    Surplus
                   Aquire                        Capacity         VALUE
                   Secondhand or                 Introduced    DESTRUCTION                      $0
                                                                                                      1986
                                                                                                             1987
                                                                                                                      1988
                                                                                                                                 1989
                                                                                                                                        1990
                                                                                                                                               1991
                                                                                                                                                      1992
                                                                                                                                                             1993
                                                                                                                                                                     1994
                                                                                                                                                                            1995
                                                                                                                                                                                    1996
                                                                                                                                                                                           1997
                                                                                                                                                                                                  1998
                   Newbuilding                   into the
                   Tonnage                       Market



                                                                                             Source: Clarksons Shipping Review, Booz·Allen, AMA
                              Shipbuilding Shocks
    Shipping markets enjoyed a broad revival in
    2000 but weakened in 2001…
                            Tanker One Year Time Charter Rates                                                                                                        Dry Bulk One Year Time Charter Rates


$60,000                                                                                                                                            $25,000


$50,000                                                                                                                                            $20,000

$40,000
                                                                                                                                                   $15,000

$30,000
                                                                                                                                                   $10,000
$20,000

                                                                                                                                                    $5,000
$10,000


    $0                                                                                                                                                 $0




                                                                                                                                                             Jan-95


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                            VLCC                                          Aframax                                       Product                                                Capesize                                      Panamax                                       Handymax


     Note: Rates are for modern tonnage
     Source: Clarkson Research Studies


    …along with a weak global economy, persistent industry
    problems remain
  While the picture is improving, low barriers to
  entry means fragmentation remains the rule
                                                                            Due to low barriers to entry, shipowning
Capacity Share of Top Vessel Operators
                                                                             is an exceptionally fragmented business
100%



90%
                                                                               –   The percent of owners owning 20 or more
                                                                                   tankers went recently went from 5 to 10
80%                                                                                percent – but owners with just 1 to 2 ships
                                                                                   comprise nearly half the market
70%
                Other                      Other                               –   Similar fragmentation can be found across
60%                                                                                shipping markets
50%



40%
                                                                            The net effect is a unstable market,
                                                                             where marginal players can have
30%
              COSCO                                                          significant impact
              APL
20%           MSC
            Evergreen                                  Teekay
                                                       Bergesen
                                                                            The situation, however, is improving
10%
           P&O Nedlloyd                                Chevron
                                                       Mitsui OSK
               Maersk                                  Saudi Aramco
 0%
                                                       Frontline               –   Mergers and pools/alliances are consolidating
            Container                Crude Tanker                                  assets
                                                                               –   The supply of easy finance is shrinking,
  Note: Includes long term chartered vessels
  Source: Drewry, Intertanko, Containerisation International and Lloyd’s           helping restrain marginal owners
  Register data
Companies are consequently subscale with few
very large or “corporate” players

 With only a handful of vessels, most shipowners have not been
  able to take advantage of the benefits of scale

   –   Lower operating costs
   –   Lower capital costs
   –   More commercial flexibility
   –   Less in a position of price taker
   –   More ways to create or extract value

 While shipping is extremely capital intensive, few companies
  have matured to the point of having continuous access to equity
  markets

 Few business have evolved beyond being able to provide a
  small portion of a customers needs – serving as one-off service
  providers rather than entrenched partners
                         Overcapacity is a continuing threat in this highly
                         cyclical business
                                   Tanker Orderbook Relative to Fleet Size                                                   Dry Bulk Orderbook Relative to Fleet Size
                                      The tanker orderbook was
                      30%                                                                                              30%
                                      restrained in the mid 90s –
                                    helping set up the 2000/1 boom
                      25%                                                                                              25%
% of Fleet on Order




                                                                                                 % of Fleet on Order
                      20%                                                                                              20%

                      15%                                                                                              15%

                      10%                                                                                              10%

                       5%                                                                                              5%

                       0%                                                                                              0%




                                                                                                                         90

                                                                                                                         91

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                        90

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                        00

                        01




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                                     Products               Aframax                VLCC                                          Handysize                Handymax
                                                                                                                                 Panamax                  Capesize
                                          Long term sustainable orderbook

                            The world’s yards can still produce more ships than are needed – and are often
                             given incentives to do so
                            The real threat is independent ordering from a number of owners all reading the
                             same markets signs – which can quickly overwhelm supply
                      Note: Assumes average vessel life of 25 years, 2-3 percent demand growth
                      Source: Clarkson Research Studies
 …All leading to inadequate long term returns
                         Crude Shipping                                                                  Petrochemicals
               Average Returns On Capital Employed                                             Average Returns On Capital Employed
                           (1982-1998)                                                                     (1982-1998)


80%
              Industry WACC = 7%                                                                                       Cycle ROCE (USA) =16%
                                                                                 80%

60%                                                                                                                         Cycle ROCE (EUR) =12%
                                           Cycle ROCE (Aframax) =6%
                                                                                 60%
                                                                                               Industry WACC = 9%
40%
                                               Cycle ROCE (VLCC) =6%
                                                                                 40%

20%
                                                                                 20%

 0%
                                                                                  0%

-20%
       1982


               1984


                      1986


                             1988


                                    1990


                                              1992


                                                     1994


                                                            1996


                                                                   1998

                                                                          2000



                                                                                 -20%




                                                                                                1984




                                                                                                                     1990
                                                                                                       1986




                                                                                                                             1992
                                                                                        1982




                                                                                                              1988




                                                                                                                                    1994


                                                                                                                                           1996


                                                                                                                                                  1998
 Source: Warburg Dillon Read                                                             Source:Chem Systems


   While recent returns have been spectacular – long term returns in shipping
    investors have been very poor, in many cases destroying equity

   Many industries have similar volatility to shipping – but earning peaks come far
    more regularly to make up for the troughs
Additionally, sources of funding are becoming
tighter

 Banks – the traditional source of capital – are facing increasing
  difficulties and becoming more focused in their lending

    – Burgeoning problem loans (notably telecoms)
    – Tougher lending and pricing requirements, particularly in
      Europe (embracing the American relationship banking
      model)
    – Targeting larger relationships

 Bond market now virtually closed to shipping

 Equity markets difficult to tap

 In all, shipping companies face the most difficult capital markets
  since the mid 80s
  Solutions lie, however, in evolving traditional
  business models while respecting the cycles…

 There are immense benefits to          To take advantage of these
  scale in specific segments – and        changes, a more sophisticated
  the companies pursuing this             approach to capital raising is
  strategy, such as Teekay and            needed
  Frontline, are benefiting
                                         Companies need to know the
 Shippers are also opening up to         supply and cost of capital in all
  increased cooperation – but only a      markets – and be nimble in tapping
  few shipowners, such as OSG with        new sources of funding as they
  its relationship with PDVSA, are        open up
  positioned to meet their needs
                                         Shipping companies benefit from
 Security of return can be sought in     partners like AMA, which are
  either defensible niches – or           always thinking about how to
  raising barriers to entry               create equity value

…and AMA can help companies chart this course
A Brief Overview of
        AMA
AMA is a unique merchant bank

 Established in 1987, AMA is the only merchant banking firm in
  the U.S. exclusively focused on the maritime industry

 AMA is staffed by twelve banking professionals, who on a
  combined basis, have over 140 years of experience in the
  maritime industry

 Affiliated with NIB Capital of the Netherlands, an AA- rated
  bank, with a significant ship financing business

 Offices in New York and Oslo
We provide a wide range of services…

                          Provide strategic and M&A advisory
American Marine            services
 Advisors, Inc.


                          Underwrite and distribute public debt
     American Marine       and equity securities in the US
      Securities, Inc.

                          Advise, help access and arrange for
     American Marine       capital – including all forms of debt and
       Credit, LLC.        equity

                          Uncover investment opportunities for our
       AMA Shipping
        Fund I, LLC.       shipping and non-shipping investor
                           clientele
…across the whole of the globe
                           AMA’s Global Experience




     AMA Offices
     Country experience of AMA professionals
Our clients are industry leaders – and we bring
them distinct strategic advantage
                             AMA delivers…
                     An unparalleled global information
                      network

                     Pro-active counsel based on long
                      term relationships

                     A unique ability to bridge the worlds
                      of shipping and Wall Street

                     Access to multiple capital markets
                      including Norway and the US
The value we deliver is well recognized
Current Assignments and
Representative Completed
      Transactions
AMA is helping transform the maritime industry
                  Advising a major tanker operator on a potential merger with a
                   public tanker company
                  Advising a premier shipping company on its potential acquisition
 Building New
                   of a publicly traded, government owned shipping company
  Businesses      Advising a major European gas carrier on suitable M&A
                   opportunities
                  Advising a major dry bulk player on merger opportunities

                  Raising several hundred million dollars in unsecured debt for a
   Accessing       top tier company
 Corporate and    Advising a major tanker operator on an off-balance sheet
                   synthetic lease structure
 Low Cost Debt
                  Arranging tax advantaged financing for a fleet of Panamax bulk
                   carriers

                  Exploring recapitalizing a major shipping company – including
                   using our own equity
 Restructuring    Exploring merging two troubled liner companies for the benefit of
   Troubled        both
  Companies       Advising the Bondholders of Enterprises Shipholding Corporation
                  Helping Cruiseinvest find opportunities for the R cruise ships
We have a long record of successful
engagements
                      Advised the Creditors of Golden Ocean in the sale of
                       the company to Frontline

                      Represented Pegasus Shipping (Hellas) Ltd. on
                       restructuring its high yield bond issue

                      Represented the Bondholders in the restructuring of
                       bonds issued in the high yield market by TBS
                       Shipping

                      Advised the Estate of American Classic Voyages in
                       the bankruptcy sale of the company to Delaware
                       North Corporation

                      Represented the Bondholders in the restructuring of
                       the high yield bonds issued by Global Ocean Carriers
                      Arranged off-balance sheet lease of $175 million for
                       Overseas Shipholding Group (OSG) backed by
                       charter commitment to BP-Amoco
                      Advised Overseas Shipholding Group (OSG) on a
                       $350 million capital raising
                      Advised Deutsche Verkehrsbank on its acquisition of
                       Nedship Bank
We have a long record of successful
engagements (continued)
                      Structured and arranged an $85 million working
                       capital financing for Samsung Heavy Industries
                      Arranged a $110 million debt financing for Essar
                       Shipping
                      Assessed and valued the shipping portfolio of a major
                       European financial institution for the company’s
                       board.

                      Arranged the financing for three container vessels
                       with long-term time-charter to Hyundai Merchant
                       Marine.

                      Arranged mezzanine financing used in a UK tax-lease
                       for two newbuilding container vessels for P&O
                       Nedlloyd (total project value $97 million).

                      Structured, arranged and funded the sale/lease-back
                       of two multi purpose vessels for Griffin Shipping of
                       South Africa (transaction value $14.6 million) and
                       then sale of the vessels to a Norwegian K/S.

                      Managed the divestment of the shipping division of
                       the India conglomerate, Larsen & Toubro Ltd.
…and our efforts draw high praise
Appendix
- Detailed AMA Structure
- Staff Biographies
American Marine Securities, Inc.

                                    American Marine
                                     Advisors, Inc.



           American Marine          American Marine           AMA Shipping
            Securities, Inc.          Credit, LLC.             Fund I, LLC.




    AMA’s wholly-owned broker dealer established in May 1998

    Member NASD SIPC

    Underwrites and distributes public debt and equity securities in the US

    Long-term goal to become the leading underwriter of public and private equity in
     the U.S. for the global maritime industry

    Positioned to provide shipping expertise, something that has been notably absent
     in a number of transactions the last four years, to the U.S. capital markets
American Marine Credit, LLC.

                                     American Marine
                                      Advisors, Inc.



            American Marine          American Marine         AMA Shipping
             Securities, Inc.          Credit, LLC.           Fund I, LLC.




    Established to provide credit products to our clients

    Provides and underwrites all types of secured debt from senior to mezzanine

    Provides bridge financing to facilitate bonds offerings, equity issues or lease
     facilities

    Arranges and distributes syndicated loans

    Prices, underwrites and funds credit more quickly than banks

    Since its inception in May 1998, AMC has committed to providing in excess of
     $800 million in debt facilities
American Shipping Fund I, LLC.

                                  American Marine
                                   Advisors, Inc.



           American Marine        American Marine        AMA Shipping
            Securities, Inc.        Credit, LLC.          Fund I, LLC.




    Established in January 2000 to acquire Dry Bulk Carriers, Containerships,
     Chemical Carriers, Product Tankers and Gas Ships.

    Purchasing power: $200m.

    Target ROE: 20% per annum.

    The Fund’s investment period closed on 12/31/01.

    Fund partners are NIB Capital and GATX, a major U.S. finance company
AMA Shipping Fund I – Deal One:

     Sale and Time Charter Back Transaction with HMM



                             Three 3,000 TEU second hand container
                              vessels owned by HMM
                             Equity from Thor Dahl
                             $13.7 million second mortgage loan
                              provided by the AMA’s Fund
                             Vessels time-chartered back to HMM
                             The first mortgage financing provided by
                              NIB Capital
AMA Shipping Fund I – Deal Two:
 Purchase of Five Vessels and the Related Loans From Seoul Bank


                               The investment was sold in May 2002
                                yielding a net IRR to limited partners of
                                23.8 percent
                               Vessels were on bareboat charters to Pan
                                Ocean of South Korea
                               The related loans were purchased at a
                                discount to outstanding amounts
                               Senior Loan for the acquisition was provided
                                by G.E. Capital
                               Vessels included:
                                  – Three 27,000 DWT bulkers
                                  – One 73,000 DWT bulker
                                  – One 700 TEU feeder vessel
Appendix
- Detailed AMA Structure
- Staff Biographies
Staff Biographies…
Morten Arntzen - Chief Executive Officer
Morten Arntzen has been involved in the global shipping industry continuously since 1979.
He set up and ran the Global Shipping Group of Manufacturers’ Hanover Trust Company in
1984, during which period he was involved, among other things, in a number of high-profile
debt restructurings. Prior to joining AMA in 1997, he ran the Global Transportation Group
for Chase Manhattan Bank, the same position he held at the new Chemical Bank prior to its
merger with Chase in 1995. He currently serves as a director of IM Skaugen of Norway,
Essar Shipping of India, TBS Shipping in the USA and Chiquita Brands International.

Rolf A. Wikborg – President of AMA Norway AS
Mr. Wikborg was a founder of AMA in 1987, and now heads AMA’s expansion into Norway.
Prior to AMA, Mr. Wikborg was the Managing Director of Fearnleys, Mexico. In 1983, he
joined Fearnleys in the Project Department involved in sale & purchase, newbuildings and
coordination with Fearnley Finans. He is an officer in the Royal Norwegian Navy and holds
a BSc (Hons) in Management Sciences from UMIST, England and M.I.C. from Oslo in
International Maritime and Marine Insurance Law.
Staff Biographies…
James G. Dolphin - Senior Vice President
Jim Dolphin has spent well over a decade in the maritime industry. Before joining AMA, Jim led the
global maritime management consulting practice at Booz Allen & Hamilton. He has extensive
experience in strategy and financial execution, and has served a wide range of clients including
large independent owners, liner companies, oil majors and other global resource companies, ports
and maritime service companies. Jim previously worked as a commercial banker specializing in
shipping and holds a BA from Rice University.

Paul M. Leand, Jr. – Senior Vice President
Paul Leand previously worked at the First National Bank of Maryland. Over a nine year period, he
managed the Bank’s Railroad Division and, later, International Maritime Division. Paul has
extensive experience in structuring leasing and debt facilities. Since joining AMA in 1998, he has
been heavily involved in AMA’s high-yield and bank restructuring assignments as well as the large
debt placement assignments. He holds a BS/BA from Boston University’s School of Management.

Peter Shaerf – Senior Vice President
Formerly Managing Director of Poseidon Capital Corp, Mr. Shaerf has over 27 years in the
industry and has advised hedge funds and investors on a variety of maritime investments in both
equity and distressed debt. He has been involved in raising equity and structuring transactions in
the dry bulk, tanker and container sectors. Mr. Shaerf is a Director of General Maritime Corp, MC
Shipping, TBS International, and Trailerbridge. Prior to co-founding Poseidon, he ran The
Commonwealth Group, a leading broker and consultant in the container and liner sector. Peter is a
Director of The Containerization and Intermodal Institute and a member of the Maritime Law
Association.
Staff Biographies…
Harrys Kosmatos - Vice President
Harrys Kosmatos begun his career in 1994 with Elka Shipping (London) Ltd., training in the
chartering, operations and finance departments. In 1995 he joined the Shipping Banking
Group of the Commercial Bank of Greece. There he worked as a credit analyst in the Bank’s
London office. He joined AMA in May of 1997 and has focused on raising AMA’s profile and
involvement in the Greek shipping market. Harrys has a BA (Hons) in Classical Studies and
Politics from the University of London (Queen Mary & Westfield College) and an MSc in
Shipping, Trade and Finance from City University Business School, London.

Kevin O’Hara – Vice President
Kevin O’Hara previously worked in the ship finance departments of Nedship Bank and the
First National Bank of Maryland. During his time at Nedship and First National, he worked
with shipping and offshore clients in North and South America, as well as working with
distressed shipping companies in the special credits area of First National. He holds a BBA
with a double major in Finance and International Business from Loyola College in Maryland.

John C. Wobensmith – Vice President
Prior to joining AMA, John C. Wobensmith worked at The First National Bank of Maryland.
During his seven-year tenure at the Bank, he worked in the International Maritime Division.
He then worked in the Bank’s Special Assets group restructuring and managing distressed
maritime loans. While at AMA, he has been involved in the structuring and raising of both
debt and equity, M&A transactions and working with companies through the
restructuring/bankruptcy process. He also is currently responsible for AMA Shipping Fund I.
He holds a BA in Economics (Hons) from St. Mary’s College.
Staff Biographies…
M.Y. Choi - Assistant Vice President
Prior to joining AMA 1998, M. Y. Choi worked for at Fearnleys Korea Ltd. where she was in
charge of ship financing and special projects. At AMA she has been principally responsible
for maintaining, expanding and developing the Company’s client base and relationships in
the Korean shipping and banking industry. M.Y. Choi has done multiple transactions with all
the major Korean shipping and shipbuilding concerns. She holds a BA degree in Business
Administration from Ewha Woman’s University in Korea.

Yuan (Jack) Sun - Associate
Jack Sun joined AMA in the summer of 1999. Prior to that he worked for seven years in
international trade for China National Machinery I/E Corp., one of China's largest trading
companies. Later, he worked as Project Manager in the International Marketing department
of Sericol International Ltd., a division of Burmah Castrol Plc., in the U.K. Jack holds a
B.Eng. from Xi’an Jiaotong University, China and an MBA in Finance and International
Strategy from the Yale School of Management.

Robert Longnecker –Associate
Prior to joining AMA in 2002, Robert worked in the private equity group of Credit Suisse First
Boston. Before that he spent three years at Lehman Brothers in the transportation group
working on corporate finance and mergers and acquisitions. Robert holds a BA in
economics from Cornell University.
                       American Marine Advisors, Inc.
                         200 Park Avenue, 31st Floor
                            New York, N.Y. 10166
                            Phone: (212) 682-3344
                            Fax:    (212) 682-3464
                       Video Conf.: (212) 661 8012/5969


Contacts:            Home/Mobile:      Ext.:    E-mail:

Morten Arntzen       (203) 966 3120    308      Marntzen@amausa.com
MeeYoung Choi        (646) 552 0499    312      Mchoi@amausa.com
Jim Dolphin          (646) 552 1192    306      Jdolphin@amausa.com
Harrys Kosmatos      (212) 535 3301    307      Hkosmatos@amausa.com
Paul Leand           (917) 442 2300    314      Pleand@amausa.com
Robert Longnecker    (917) 213 9320    304      Rlongnecker@amausa.com
Kevin O’Hara         (646) 552 0160    305      Kohara@amausa.com
Peter Shaerf         (646) 623 5333    313      Pshaerf@amausa.com
Jack Sun             (718) 263 3189    303      Jsun@amausa.com
Rolf Wikborg         +47 9061 2813              Rwikborg@amausa.com
John C. Wobensmith   (646) 552 4025    310      Jwobensmith@amausa.com

								
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