First Ship Lease Trust

[CY09]

To be exact, its: Pay approx 18 cents per share to current Trust Mgmr to get controlling stake and the rights to extract profits by managing the trust. Then get the rights to dilute existing shareholder by paying only 8.47 cents per share.

IMO, it seems FSL really needs Navios to help it. The very same company which raided Rickmers for its fleet

Please enlighten on the ..........paying 8.47 cents per share.  How do you derive the 8.47 cents per shares.

Current no of shares = 637,456,577
TM no of shares held = 154,430,600

Under the agreement, should Navios exercise its US $20mil (s$28mil) convertible loan into shares, Navios has to have at least 50.1% of the enlarged share capital. Assuming the exercise of this convertible loan, Navios will need to receive "X" amount of shares to obtain its "at least 50.1% desired share"

Hence (154,430,600+X) divided by (637,456,577+X) must equal to 0.501. Using algebra, answer of "X" is 330,531,353 shares

Divide this by s$28 mil, we get 8.47 sing cents per share.

[3 marks algebra question]

[yeokiwi]

Current no of shares = 637,456,577
TM no of shares held = 154,430,600

Under the agreement, should Navios exercise its US $20mil (s$28mil) convertible loan into shares, Navios has to have at least 50.1% of the enlarged share capital. Assuming the exercise of this convertible loan, Navios will need to receive "X" amount of shares to obtain its "at least 50.1% desired share"

Hence (154,430,600+X) divided by (637,456,577+X) must equal to 0.501. Using algebra, answer of "X" is 330,531,353 shares

Divide this by s$28 mil, we get 8.47 sing cents per share.

[3 marks algebra question]

*Clap Clap*

Apparently, with a weak parent like HSH Nordbank AG, FSL is unable to obtain a refinancing and is also unable to fund a right issue.
With 967 million shares, each current share is being diluted by around 50% for a mere 20 million dollars.

[tsc3024]

This means that the units are being valued at 18 cents per share, and upon completion of the exercise of convertible loan, the theoretical unit price should be at about 14 cents (assuming no change in market price of 18 cents). This is probably the best that unit holders can expect, hence unit holders shouldn't be selling at current price of about 10 cents per unit?

[CY09]

This is where FSL and Rickmers failed in, they were neither big nor dire enough to scare banks into refinancing.

I learnt from industry talk that for the rickmers case, lenders will be getting close to their full principal despite the fire sale of Rickmers fleet at 113 mil which was half of the secured loans amount; your guess is as good as mine at how the lenders were structuring a deal while preparing for Rickmer's fleet firesale to other people. Pherhaps banks were going to refinance the purchaser of Rickmers fleet at a good deal

[Boon]

3. CONDITIONS PRECEDENT TO THE PROPOSED TRANSACTION
The Proposed Transaction shall be subject to certain conditions precedent, including:
(a) the grant by the Securities Industry Council to Navios and its concert parties of a waiver of their obligation under Rule 14 of the Singapore Code on Take-overs and Mergers (the “Code”) to make a mandatory take-over offer for all the units in FSL Trust (the “Whitewash Waiver”) and approval of FSL Trust’s independent unitholders of the Whitewash Waiver;
(b) all approvals for the Proposed Transaction being granted by relevant third parties;
© restructuring of the existing mortgage debt and other loan facilities of FSL Trust in a manner satisfactory to Navios and the Trustee-Manager; and
(d) the release of any security over the FSL Sale Units and/or the FSLAM Sale Shares.
______________________________________________________________________________
 
If existing loans could be restructured (through refinancing and/or via rights issues) who needs the USD 20 m convertible loan?
 
If the loans can’t be restructured, what is the significance of the USD 20 m convertible?
 
The quantum of convertible loan is only USD 20m, but it is structured in such a way of having a huge “diluting effect” on shares of unitholders (other than the Sponsor/TM), as if it is the only lifeline available, which doesn’t make sense to me.
______________________________________________________________________________

[CY09]

I am curious. What is the possibility of a "3 rights for every 1 share" exercise at say s$0.09 to ensure the Trust Survival? The raised proceeds will be close to US$120 million.

And what is the likelihood that such a rights exercise will be fully subscribed, excluding the sponsor's HSH Nordbank involvement because the bank itself is in a weak financial state

[holymage]

As suspected, fsl has trouble getting refinancing. This dragged for way too long. My best guess is the global environment is different from before. With the majority of the shipping and O&G industry doing badly, bank need to strengthen their balance sheet.

The other alternative would be dilution of shareholders stake. I suspect that even the recently announcrd convertible loan interest rates may not be favourable.

Lastly, shareholders counting on the balance sheet value of vessels should take note that the record value is based on discounted cash flow projected by fsl. This was mentioned by the ceo during one of the calls. That's why there are impairments when their clients defaults at higher rates. In addition, should someone else buy vessels, they will buy at a discount to projected cash flow in order to profit and mitigate risk. With poor refinancing available and unfavourable shipping rates, one would expect rather substantial discount to fsl asset value.

Sent from my SM-G930F using Tapatalk

[Boon]

http://infopub.sgx.com/FileOpen/20170428...eID=451237

In the end, the enhanced rights issue will proceed as planned.

One thing good the trust has now released the BBCE per ship in their AGM slides. I wonder is it because they are reading this thread and decided to help us dissect the cash flow generation in an easier way (page 10)

http://infopub.sgx.com/FileOpen/20170428...eID=451238

Using the slides, we can estimate the breakdown of BBCE as follows:

Containership: 20.8mil
Specialized Tanker : 8.2mil
Chemical Tanker : 8.4mil
MR Tanker: 9 mil
Afra: 6.5mil
feeder: 1 mil
LR: 10 mil

• VTL remains within Lender Covenant of 125% despite vessel valuations declining considerably during 2016 and 2017 to date. 
  

Assume current L = 223 (FY2016) - 20 (voluntary prepayment) - 11 (1Q2017) principal repayment = USD 192 m

=> V = 1.25 L = 1.25 x 192 = USD 240 m 
_____________________________________________________________________________________________________

[yeokiwi]

http://realmoney.thestreet.com/articles/...ios-buying

Navios, on the other hand, is increasing its exposure to shipping, and that's why you should be buying the stock. Yes, that sounds obvious since Navios is a shipping company, but remember that it's just as easy for the company to sell ships as it is for them to buy them. In the past month, the Navios Group companies have been active purchasers of vessels in the secondhand market across all the major shipping categories.

[CY09]

The problem is how banks are tightening credit and putting tight valuations of collateral. If banks think your assets are worth 10 mil despite it being on a 5 mil cash flow annual generation. You are still screwed. That's is what is happening on the shipping industry. Allowing funds to take opportunity of the situation