Britannia Bulk: Another Bulk Shipper IPO

Jun.11.08 | About: Britannia Bulk (DWT)

Britannia Bulk (DWT) is an international provider of drybulk transportation services.

All quotations are from the company’s most recent F-1 filing with links provided.

Business Overview (from prospectus) 

We are an international provider of drybulk shipping and maritime logistics services with a leading market position in transporting drybulk commodities in and out of the Baltic region. Our current owned fleet is diversified and consists of 22 vessels, including 13 drybulk vessels, five of which are ice-class, five ocean-going ice-class barges, and four ice-class tugs. Ice-class vessels are those that have been specifically constructed and certified for transportation in icy conditions, which are a particular feature of the Baltic region for approximately half of each year. We have contracted to purchase an additional six Panamax ice-class drybulk vessels, which are scheduled to be delivered between June 2009 and September 2010. Upon delivery of these additional vessels, based on our owned deadweight tonnage, or dwt, capacity as at March 31, 2008, we will increase our dwt capacity by approximately 72% to approximately 1,067,460 and our owned fleet will consist of 28 vessels, including 19 drybulk vessels, 11 of which will be ice-class. This expansion of our fleet will not only provide a base from which to significantly grow our revenue and earnings in the future, but will also extend our leading position in ice-class service. Based on our market knowledge, there are currently fewer than 10 ice-class Panamax drybulk vessels which are less than 10 years old and, following delivery of our new-builds, we believe we will own one of the largest and most modern fleets of ice-class Panamax drybulk vessels in the world.

Offering: 8.3 million shares at $17-$19 per share. Net proceeds of approx. $136 million for repayment and refinancing of debt, and for general corporate purposes

IPO Underwriters: Goldman Sachs (NYSE:GS), Bank of America Securities LLC (NYSE:BAC)

Financial Highlight:

Due to corporate reorg. undertaken in May 2008, Britannia Bulk Holdings Inc became the sole parent company of Britannia Bulk Holdings Plc and ultimate parent of Britannia Bulk Plc and its subsidiaries. Consolidated financial data and other operating data is comprised of the historic financial data and other operating data of Britannia Bulk Plc and its subsidiaries.

 

Total revenue was $566.6 million for year ended December 31, 2007 vs. $191.5 million for the year ended December 31, 2006… operating exp, $499.8 million for year ended December 31, 2007 vs. $184.8 million for the year ended December 31, 2006 gross profit year ended December 31, 2007 $9.5 million vs. $7.57 million for the year ended December 31, 2006 …net income was $46 million for year ended December 31, 2007 vs. $2.4 million for year ended December 31, 2006.

 Competitors 

We compete for charters on the basis of price, vessel location relative to port of loading, size, age and condition of the vessel, as well as on our reputation as an owner and operator. We compete with other owners and operators of drybulk carriers in the Panamax, Handymax and Handysize sectors, predominantly in transportation of commodities from the Baltic region. Ownership of drybulk carriers in the global drybulk shipping market is highly fragmented and is divided among a large number of independent bulk carrier owners and charterers, many of whom have significantly greater resources than us. The Baltic drybulk shipping market is more concentrated amongst fewer number of independent bulk carrier owners and charterers. Our principal competitors are Polish Steamship Company, Murmansk Shipping, ESL Shipping, Norden and Armada.

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