BW Pacific will launch an initial public offering and list its common shares on the Oslo Stock Exchange in a move to grow and consolidate its position within the product carrier segment. The IPO should be carried before the end of the year, subject to receiving the relevant approvals from the Oslo Stock Exchange and favourable equity capital market conditions, the company held by the Sohmen-Pao family said in a release.
Pre-marketing of the IPO is expected to commence this month.
BW Pacific is a Singapore-based product tanker company, controlled by the BW Group. BW Pacific currently owns an existing fleet of 33 vessels, comprising 17 owned LR1s and 16 owned MRs, and a newbuilding fleet of 12 vessels of which six are LR1s and six are MRs. Four of the MR newbuildings are expected to be delivered in 2015, and the remaining newbuildings are expected to be delivered in 2016 and 2017.
“The purpose of the IPO is to finance the company’s newbuilding program, as well as to position the company for further growth by gaining access to the capital markets,” BW Pacific said in a release.
A public listing would also allow the company to use its shares as transaction currency in future acquisitions and to take part in market consolidation.
The aim is to make BW Pacific into a leading product tanker company. As of Q2 this year the company had total assets of $1.2bn and book equity of $522m.
DNB Markets has been retained as global coordinator and joint bookrunner for the IPO. Pareto Securities has been retained as a joint bookrunner and Skandinaviska Enskilda Banken as a co-manager for the IPO.
Product carriers are one of few shipping segments to be viewed as a decent by analysts. For instance, at the end of September DNB Markets analysts in Oslo upped their product tanker freight rates and vessel valuations on a promising outlook.
“We reiterate our positive view on the product tanker segment as we see continued potential upside risk,” DNB Markets noted. “Coupled with limited new ordering, product tankers migrating to the crude segment, and constant high volatility in petroleum products’ prices, we have increased our spot rate and vessel value forecasts.”