Two Shipping IPOs: Navios Maritime Partners, Global Ship Lease

There are two shipping companies due to go public this week: Navios Maritime Partners (NMM), a spinoff of Navios Maritime Holdings that owns and operates an international fleet of drybulk carriers; and Global Ship Lease (GSLX) a spinoff of CMA CGM, the third largest container shipping company in the world, which will acquire container ships and charter these vessels under long-term, fixed rate charters.

All quotations are from the companies' most recent S-1 filings with links provided.

NAVIOS MARITIME PARTNERS L.P. (NMM)
Business Overview (from prospectus)

We are an international owner and operator of drybulk carriers newly formed by Navios Maritime Holdings Inc. (NYSE: NM), a vertically integrated seaborne shipping company with over 50 years of operating history in the drybulk shipping industry. Our vessels are chartered out under long-term time charters with an average remaining term of approximately 5.2 years to a strong group of counterparties consisting of Cargill International SA, COSCO Bulk Carrier Co., Ltd., Mitsui O.S.K. Lines, Ltd., Rio Tinto Shipping Pty Ltd., Augustea Atlantica SrL Charterers, The Sanko Steamship Co., Ltd. and Daiichi Chuo Kisen Kaisha. Upon the closing of this offering, Navios Maritime will own a 43.2% interest in us, including a 2.0% interest through our general partner which Navios Maritime owns and controls.

Offering: 10.0 million shares at $19.00 - $21.00 per share. Net proceeds of approximately $195.4 million will be used be used to fund a portion of the purchase price of the capital stock in the subsidiaries of Navios Maritime that own or have rights to vessels in the company's initial fleet.

Lead Underwriters: Merrill Lynch, J.P. Morgan

Financial Highlights:

Time charter revenues amounted to approximately $23.2 million for the six months ended June 30, 2007 compared to $16.1 million for the same period of 2006... Voyage expenses amounted to $2.7 million for the six months ended June 30, 2007 compared to $1.1 million for the same period of 2006... For the six month period ended June 30, 2007, direct vessel expenses amounted to $3.1 million and were comprised of crewing and related costs (approximately 41.8%), stores, provisions, lubricants and chemicals (approximately 25.6%), insurance (approximately 13.2%), spares, repairs, maintenance and other (approximately 19.5%)...For the same period ended June 30, 2006, direct vessel expenses amounted to $2.6 million and were comprised of crewing and related costs (approximately 42.8%), stores, provisions, lubricants and chemicals (approximately 24.7%), insurance (approximately 14.8%), spares, repairs, maintenance and other (approximately 17.8%)... Net income for the six months ended June 30, 2007 amounted to $9.6 million compared to $4.4 million for the same period ended June 30, 2006.

Additional Resources:

• Company website
• Online road show
• AP: 'Navios Maritime Partners Sets IPO Terms'
• FinancialWire: 'Navios Maritime Partners Sets Pricing Terms For IPO'

GLOBAL SHIP LEASE, INC. (GSLX)
Business Overview (from prospectus)

We are a Republic of the Marshall Islands corporation incorporated on May 3, 2007 to acquire a fleet of modern, high quality containerships of diverse sizes. We will purchase the vessels in our initial and contracted fleet from CMA CGM and will derive initially all of our revenue from CMA CGM, which will be our only charterer following this offering. Our business strategy is to expand our fleet through additional vessel acquisitions and to charter those vessels under long-term, fixed-rate charters to reputable container shipping companies, including CMA CGM.

Offering: 18.9 million shares at $19.00 - $21.00 per share. Net proceeds of approximately $349.9 million will be used finance the company's initial fleet. The remaining net proceeds from this offering will be used to finance a restricted cash balance reserve.

Lead Underwriters: UBS Investment Bank, Citi

Financial Highlights (of company's predecessor):

Operating revenue increased by 168.5%, or $188.0 million, from $111.6 million in 2005 to $299.6 million in 2006... Operating expenses increased by 161.8%, or $155.7 million, from $96.2 million in 2005 (86.2% of operating revenue) to $251.9 million in 2006 (84.1% of operating revenue)... [O]perating income increased by 209.8%, or $32.3 million, from $15.4 million in 2004 to $47.7 million in 2006... [N]et income increased by $23.7 million from $9 million in 2005 (8.1% of operating revenue) to $32.7 million (10.9% of operating revenue).

Additional Resources:

• Company website
• American Shipper/Shippers' NewsWire: 'New company will purchase, charter ships to CMA-CGM'
• AP: 'Global Ship Lease Registers for IPO'

Comments

[incomefreak:]

NMM's prospectus indicates distribution of $1.40 per year.
GSLX expects to pay $1.48 per year.
Both have dividends in the 7% range.
How does this compare with more established shipping companies?

2007 Nov 14 10:58 AM

[bdp1Consult...:]

7% is a good starting point. Recent OSG Master Limited Partnership came in a little over 7 %. "EGLE", a drybulk stock (vaguely a peer of NMM) comes in a little under 7 % depending on stock px.

But, anybody have any gossip about why French guys pulled the leasing IPO?

2007 Nov 18 03:57 PM