Dry Bulk Shipping VII

[ron]

Navios Maritime Acquisition Corporation announced yesterday that it has closed its initial public offering of 25,300,000 units, including 3,300,000 units issued upon exercise of the underwriters' over-allotment option.

Each unit consists of one share of common stock and one warrant that entitles the holder to purchase one share of common stock. The units were sold at an offering price of $10.00 per unit, generating gross proceeds to the Company of $253,000,000.

Simultaneously with the closing of the initial public offering, the Company consummated a private placement of 7,600,000 warrants at a purchase price of $1.00 per warrant to its sponsor, Navios Maritime Holdings, Inc. The initial public offering and the private placement generated gross proceeds to the Company in the aggregate of $260,600,000.

The Company intends to use the net proceeds from the offering and the private placement to acquire through a merger, capital stock exchange, asset acquisition, stock purchase or other similar business combination, one or more assets or operating businesses in the marine transportation and logistics industries.

J.P. Morgan Securities Inc. and Deutsche Bank Securities Inc. acted as joint bookrunning managers and S. Goldman Advisors LLC acted as the co-manager for the initial public offering.

In addition, the Company announced today that commencing on July 7, 2008, the Company expects that the holders of the Company's units may elect to separately trade the common stock and warrants included in the Company's units.

Those units not separated will continue to trade on the New York Stock Exchange under the symbol NNA.U, and each of the common stock and warrants will trade on the New York Stock Exchange under the symbols NNA and NNA WS, respectively.

Navios Maritime Holdings

[dn4911]

Clarkson's



Although the shipping industry is rightly preoccupied by the enormous 527m dwt orderbook, which has now reached 49% of the fleet, we should not forget the industrial economy. One way or another most of the demand for sea transport is generated by the industrial process, so shipping booms and recessions are generally driven by the industrial cycle. So where’s it going today?



Slow and Bumpy Old World

The answer depends on where you are. Economists in the Atlantic are gloomy. Europe and the USA have had an unexciting growth history in the last six years. In 2002 there was a deep recession (see graph), followed by a recovery which peaked in 2004 as Europe crept up to 3% growth and the USA to 6.3%. But then Europe slowed to negative growth in October 2005 and the USA down to 1.9%. Finally growth peaked again in 2006, but now both the USA and Europe are on the slippery slope.
Fog in the Atlantic

This slowdown in the North Atlantic is no worse than three years ago, but there are more underlying problems, notably the $140/barrel oil price; problems in the banking system; and rising inflation. In its latest forecast the OECD predicts flat or falling activity during 2008, followed by a pick-up in 2009 i.e. a re-run of the 2005/2006 mini cycle (see graph). But with so many negative forces, something more like the 2002 downturn cannot be entirely ruled out.
Gobsmacking Growth

But if you are in the Pacific you are probably more optimistic. Six years ago Asia was suffering from the Dot.com crisis and industrial growth down to 4% a year. But, by February 2004, growth had surged to 14%. In the process this kicked off the great shipping boom. Since then, apart from a brief dip in 2005, Asia’s industrial production, lead by China, has rolled forward at 9-13% a year. It is this growth which is now propping up the oil trade (virtually all of the growth in demand is coming from Asia and the Middle East at the moment) and of course dry bulk. For example, China's iron-ore imports jumped from 34mt/month in October 2007 to 46mt in May, up 35% in seven months. Crude oil imports were up by 31% over the same period.
Pressure in the Pacific

But all this growth is putting pressure on resources, causing inflation, espe-cially in oil and iron-ore prices. For both trades the recent surge in volume may be to do with price specula-tion as well as fundamental demand. In addition the RMB is strengthening; labour costs are rising and their Atlantic markets are slowing. So although there is no sign of slowdown yet, there is reason to worry.
Economic Reality Check

So there you have it. The demand side is still strong, with Asia still going at full speed, but the Atlantic is slowing and there are plenty of storm clouds. Still, it's just a brisk blow, which often makes for great sailing conditions. Have a nice day.

[lamborghini]

Oil & Gas
Tehran cuts number of supertankers idling in Gulf


Tehran: Iran, Opec's second-largest oil producer, cut the number of tankers it has idling in the Arabain Gulf to 11, from 15 a week ago, ship-tracking data show.

The 11 very large crude carriers, or VLCCs, have a storage capacity of about 22 million barrels. They are floating near the Kharg Island crude-oil loading facility or the nearby Soroush Terminal, according to AISLive data on Bloomberg.

Of the four tankers that set sail since June 23, two are bound for Egypt's Ain Sukhna terminal in the Red Sea, where they can empty their cargoes into a pipeline for refiners to collect. Another is going to China and one to Jebel Dhanna in the UAE.

Hojatollah Ghanimifard, executive director of international affairs at the National Iranian Oil Co, said June 2 that Iran.......more

[lamborghini]

Star Bulk Carriers Corp. announced today that it has taken delivery of the Star Cosmo, a Supramax bulk carrier of approximately 52,247 dwt, built in 2005.

The vessel comes with a staggered 3-year charter to Korea Line that commenced on March 17, 2008, at a gross daily rate of $55,900, $41,900 and $27,900 for the first, second and third year respectively.

With the delivery of Star Cosmo, Star Bulk's operational fleet currently consists of twelve dry bulk carriers. In addition, the Company has definitive agreements to acquire one Capesize dry bulk carrier and to sell its oldest vessel, a Panamax dry bulk carrier. The contracted fleet operating days under time charter in 2008, 2009 and 2010 are currently 100%, 84% and 63% respectively.

Akis Tsirigakis, President and CEO of Star Bulk commented: "We are pleased to announce that we have taken delivery of the Star Cosmo, a modern vessel with an attractive time charter attached. Our fleet is fully contracted for 2008 therefore our revenue is unaffected by the recent freight market volatility, as is our ability to pay our fixed dividend which should be mentioned, represents only approximately 57% of our free cash flow."


Fleet Table

[lamborghini]

Reuters - Euroseas files for $400 mln debt, stock offering

Euroseas Ltd on Wednesday filed with U.S. regulators to periodically sell up to $400 million in debt securities, common and preferred shares, and other securities.

The company, which owns dry bulk container carrier vessels, said in a filing with the U.S. Securities and Exchange Commission that it will use the net proceeds for capital expenditures, repayment of indebtedness, working capital, and general corporate purposes. It also said shareholders are offering an additional 9.96 million shares in the offering.