investor presentation february 2017 tb
TRANSCRIPT
1
Investor Presentation
TB Marine February 2017
2
Introduction (I/II)
TB Marine Shipmanagement GmbH & Co. KG (“TB Marine” or the
“Company”) is a specialist independent management company in liquid
oil, product and chemical tanker transportation
The Company is a medium niche player in the energy market, with 35
technical and highly sophisticated IMO II+III tankers under ownership /
management
TB Marine serves the transport needs of all oil major companies and
trading entities, including Exxon, Shell and Chevron
The Company manages a fleet of its own tankers and on behalf of third
parties (including private equity / family offices)
An opportunity exists to invest directly in the fleet expansion either
through an SPV or a fund structure
3
Introduction (II/II)
Each tanker purchase has a transaction value of US$25 – US$30 million
(depending on the investment), which are 60-65% debt funded and the
balance (including initial working capital) equity funded
- TB Marine co-invests in every transaction, thereby aligning its interests with
investors
Despite prevailing oil market conditions (excess supply, falling prices),
charter rates are rising from cyclical lows, with positive long term
fundamentals and supply conditions in the tanker market driving demand
The Company has access to tanker vessels at attractive valuations from
distressed owners through its relationships within the industry and with
financing banks
Target 8 - 12% dividend income based on prevailing 2 to 5 year charter
rates plus the potential of additional terminal value from the sale of the
vessel(s)
4
Tanker Shipping Market
Tanker Shipping MarketMacro
Factors
Long Term
Demand for
Oil
Storage /
Contango
Structural
Factors
Supply of
New Builds
Existing
Transport
Capacity
Ship Owner
Terms
Charter Rates
Demand /Supply of Vessels
The tanker shipping market is driven by several demand and supply side
factors, which are reflected by the daily charter rates (pricing) achieved for
the various vessel types
- Has a direct impact on the structure of the vessel market in terms of the number
of new ships commissioned, the valuation of the second hand market and
scrappage
5
The Company (I/II)
The company was founded 2005, respectively
the Technical Shipmanagement company in
2007, by Steffen Thate and Stephan Bracker,
two operators with over 65 years combined
experience in shipping
The Company is headquartered in Hamburg,
with crew offices in Riga (Latvia), Limassol
(Cyprus) and Odessa (Ukraine)
- Employs a total of 1.100 sea faring staff and 60
office staff
TB Marine operates 35 IMO II + III tankers
serving prime oil companies and traders
The Company undertakes the full suite of
services, including commercial, operations,
technical, nautical, crewing, safety & quality, IT
and financial / accounting
Key Clients
6
The Company (II/II)
TB Marine is technically audited & approved as ‘Management Company’
by Oil Majors; retains highest level of industry association standards like
OCIMF ( Oil Company International Marine Forum) through management
and operation review (“TSMA” - Tanker Self Management Assessment)
The Company has extensive experience in the transportation of clean
petroleum products (“CPP”), dirty petroleum products (“DPP”) and
chemical markets, giving customers optional trading at lower cost
TB Marine is a pool member in LR8 pool (70-75,000 tons – Navig8) as
well as Nordic Tanker “Ice class pool” (Chemicals 16.500-25.000 tons)
7
The Fleet
Fleet Composition (2017) Vessels
Total Deadweight: 1,475,000 tonnes
Average Age of Feet: < 5,4 years
25
10
Chemical Tankers
Product Tankers
8
34 years experience in ship management and commercial relations- 16 years as Director and Managing Director/Partner- 10 years as Partner/Owner of TB Marine Shipmanagement GmbH & Co. KG
Extensive sale and purchase experience- Initiating new build/ second hand contracts from the project stage- Initiating pre- and post financing and - Private equity placements
All areas of full management services- Established management offices in Hong Kong, Cyprus and Riga
34 years experience in commercial management, chartering and project business
- 10 years in Mexico Central America as Managing Director/Partner - 10 years as Partner/Owner of TB Marine Shipmanagement GmbH & Co. KG
Strong customer relationship experience - To main global traders and decision-maker in the shipping industry- Tonnage provider and pool representative - Initiating tailor made commercial services for medium and long term
commitments, focus of strategic alliance partnership and trades
All areas of full management services- Established management offices in Mexico, Cyprus and Riga- Chartering / Agency / Logistic / Trading branch office serving all Mexican ports
Steffen Thate
Founder / Managing Director
Stephan Bracker
Founder / Managing Director
Senior Management
9
Engine / Technical
Luboil
Deck / Nautical
Operations
Crewing
Safety & Quality/ Vetting / IT
Insurance
Management / Controlling / Commercial
TB Marine Daily Operating Expenses (OPEX) Daily Financing Expenses
Vessel Economics
Management Services
- Commercial
- Operations
- Technical
- Nautical
- Insurance
- Crewing
- Safety & Quality
- Vetting
- IT
- Controlling
- Accounting
Crew: 63%
Deck & Engine Maintenance:16%
Insurance: 11%
S&Q Vetting: 6%
Luboil:4%
Daily running expenses are comprised of “operating expenses” and “financing
expenses” (principal + interest repayments)
- The bulk of operating costs is made up of crew expenses (63%)
- Insurance coverage for the vessel is for 130%
The daily time charter equivalent income (“TCE”), less running expenses (Daily
Operating Expenses + Daily Financing Expenses), yields to profit/dividends.
Vessel “Example”
Crew: 63%
Deck & Engine Maintenance:16%
Insurance: 11%
S&Q Vetting: 6%
Luboil:4%
10
Deck / Nautical
Vessel Economics
The daily running expenses (OPEX) are actual costs for proper manning, insurance
and maintenance. Expenses for extraordinary repairs are not budgeted but are
subject to fall under the respective insurance cover.
Types of vessel insurance
There are three different main insurances covering expenses for or resulting out of
repairs exceeding the normal OPEX:
- Repairs concerning the Hull & Machinery – Deductible depending on insurance
terms
- Loss of Hire (income) – in case of repairs exceeding 14 days, Loss of Hire
insurance is applicable. The insurance is paying a fixed hire rate compensating
the income.
- P&I is applicable for all crew related issues (illness, death), damage to third
party (cargo damages) and Oil pollution (insured up to 1 Billion).
Vessel Insurance
Loss of Hire
Protecion & Indemnity
Hull & Machinery
11
Investment Opportunity
An opportunity exists to invest in the purchase of second hand tanker
vessel assets, either directly through an SPV or via a fund structure
The Company has a current pipeline of up to 4 tanker vessels, with a
typical transaction value of about US$25-30 million (depending on the
investment)
- A number of these assets are from distressed owners and are available at low
break even charter rate valuations
The purchase of the vessels are funded via a combination of bank debt
(60-65%) and equity (35-40%)
The Company’s principals invest alongside external investors, up to 10%
of the total equity
TB Marine has a successful track record of raising third party equity from
German family offices
TB Marine would undertake to charter and fully manage the vessel, as
with their current fleet
12
Investment Structure
An investment can be made directly into
the SPV or via an existing offshore Isle of
Man fund structure
Each vessel is owned by a separate Ship
SPV
The type of investment structure will
depend on the equity commitment per
vessel
Advantage German SPV
Foreign investors may be able to take
advantage of the German tonnage tax -
profits taxed at about 0.1% - if double
taxation treaties are applicable (i.e.
within the EU)
Ship SPV
TB Marine Investment
Vessel
100%
Bank
Potential Investment Structure
60-65%
13
Conclusion & Next Steps
An opportunity exists to invest in tanker vessels with a first class
management company in TB Marine
The Company has access to assets from distressed owners at valuations
with relatively low break even charter rates
TB Marine will undertake full management and chartering of the vessel(s)
to prime counterparties
Long term fundamentals are favourable for the market, with charter rates
firming recently
Potential dividend income of c. 8-12% per annum, plus scope for
additional upside from the sale of the vessel
There is scope to arrange meetings with senior management and
undertake due diligence at their offices in Hamburg
14
TB Marine owns and manages a tanker fleet of 35 vessels- 10 product/oil tankers and 25 chemical tankers
- A total deadweight of 1,475,000 tonnes
TB Marine also undertakes third party management
Average age of the fleet is 5,4 years
Container, Bulker and Multipurpose tonnage is not part of our portfolio yet
These three segments have not been attractive so far and we are waiting for theright investment opportunity. TB Marine is fully qualified to manage thesesegments
The Fleet (I/VII)
15
CLIO built at New Times Shipbuilding Co Jing Jiang – China built 08/2008
- LR2 fully coated – Aframax Tanker – 112.705 DWT
- On time charter to SHELL, trading CPP Europe worldwide
HERMIONE built at NCS – China 08/2008
- LR1 fully coated - Panamax Tanker - 73,000 DWT
- Employed in the LR8 Pool of Navig8, trading CPP worldwide for e.g. SHELL, BP, Vitol
GINNY built at NCS – China 09/2008
- LR1 fully coated - Panamax Tanker - 73,000 DWT
- Employed in the LR8 Pool of Navig8, trading CPP worldwide for e.g. SHELL, BP, Vitol
ARIANE built at NCS – China 12/2007
- LR1 fully coated - Panamax Tanker - 73,000 DWT
- On time charter to Cape Tankers, trading DPP worldwide for e.g. SHELL, Lukoil, Chevron
NEW YORK STAR built at NCS – China 12/2006
- LR1 fully coated - Panamax Tanker - 73,000 DWT
- Employed in the LR8 Pool of Navig8, trading CPP worldwide for e.g. SHELL, BP, Vitol
ALIA built at Daedong Shipbuilding – Korea 03/2003- 35,000 DWT
- Employed in the Handy Pool of Navig8, trading DPP worldwide
The Fleet (II/VII)
16
Harbour Pioneer built at Yangfan built 11/2010- 19000 dwt IMO II Chemical Tanker Ice Class 1A
Harbour Progress built at Yangfan 11/2010- 19000 dwt IMO II Chemical Tanker Ice Class 1A
Harbour Fashion built at Yangfan 01/2011- 16500 dwt IMO II Chemical Tanker Ice Class 1A
Harbour Feature built at Yangfan 01/2011- 16500 dwt IMO II Chemical Tanker Ice Class1A
Harbour Fountain built at Yangfan 03/2011- 16500 dwt IMO II Chemical Tanker Ice Class 1A
Harbour First built at Yangfan 06/2011- 16500 dwt IMO II Chemical Tanker Ice Class 1A
- All six Harbour vessels are on time charter to Clipper, trading CPP / easy chemicals
mainly Europe/Canada (ice trade)
The Fleet (III/VII)
17
Rhonestern built at Gdynia, Poland built 06/2000- 25000 dwt Chemical Tanker Type 2 / Oil tanker, Ice Class 1A
Wolgastern built at Gdynia, Poland 12/1999- 25000 dwt Chemical Tanker Type 2 / Oil tanker, Ice Class 1A
Weichselstern built at Gdynia, Poland 12/1999 - 25000 dwt Chemical Tanker Type 2 / Oil tanker, Ice Class 1A
Themsestern built at Gdynia, Poland 06/2000 - 25000 dwt Chemical Tanker Type 2 / Oil tanker, Ice Class 1A
- All four Stern vessels are employed in a Strategic Cooperation, trading CPP
The Fleet (IV/VII)
18
3rd Party Management
Aurelia built at Dubai Dry Docks built 06/2007- 7511 dwt Oil Tanker, for carriage of bunker fuel
Navig8 Sirius built at Kitanihon, Japan 06/2016- 25000 dwt Stainless Steel Tanker
Navig8 Sky built at Kitanihon, Japan 08/2016- 25000 dwt Stainless Steel Tanker
Navig8 Spark built at Kitanihon, Japan 10/2016- 25000 dwt Stainless Steel Tanker
Navig8 Stellar built at Kitanihon, Japan 10/2016- 25000 dwt Stainless Steel Tanker
Navig8 Saiph built at Kitanihon, Japan 01/2017- 25000 dwt Stainless Steel Tanker
Navig8 Sceptrum built at Kitanihon, Japan del. 05/2017- 25000 dwt Stainless Steel Tanker
The Fleet (V/VII)
19
3rd Party Management
Navig8 Almandine built at HMD – Korea built 02/2015- 37000 dwt Product / Chemical Tanker Type 2
Navig8 Amber built at HMD – Korea 02/2015- 37000 dwt Product / Chemical Tanker Type 2
Navig8 Amazonite built at HMD – Korea 05/2015- 37000 dwt Product / Chemical Tanker Type 2
Navig8 Alabaster built at MIPO – Korea 11/2015
- 37000 dwt Product / Chemical Tanker Type 2
Navig8 Victoria built at HHI Vinashin – Vietnam 01/2015- 49000 dwt Product / Chemical Tanker Type 2
Navig8 Violette built at HHI Vinashin – Vietnam 03/2015- 49000 dwt Product / Chemical Tanker Type 2
The Fleet (VI/VII)
20
3rd Party Management
Navig8 Turquoise built at STX – Korea built 04/2016- 49000 dwt Product / Chemical Tanker Type 2
Navig8 Topaz built at STX – Korea 07/2016- 49000 dwt Product Tanker / Chemical Tanker Type 2
Navig8 Tourmaline built at STX – Korea 10/2016- 49000 dwt Product Tanker / Chemical Tanker Type 2
Navig8 Tanzanite built at STX – Korea 11/2016- 49000 dwt Product Tanker / Chemical Tanker Type 2
Navig8 Express built at STX – Korea built 05/2016- 74000 dwt Product Tanker
Navig8 Executive built at STX – Korea 05/2016- 74000 dwt Product Tanker
Navig8 Excellence built at STX – Korea 05/2016- 74000 dwt Product Tanker
The Fleet (VII/VII)
21
Disclaimer
All data, forecasts and calculations in this presentation have been put
together with care with a view to giving a realistic picture of risks and
opportunities. They are based on currently available market data and our
current business strategy. We are not liable for the accuracy of any
information provided, especially information from third parties, for the
reasonableness of assumptions as to developments in the future as
presented nor for the realization of economic forecasts, revenues and
opportunities of an investment as described. The foregoing does not
apply to the extent we have acted with gross negligence or intentionally
when preparing this presentation. We do not have an obligation to update
the information provided. The information provided does not represent a
concrete offer for the investment opportunities described and does not
constitute an investment advice or investment brokerage. This
presentation is provided to you for information purposes only and may not
be copied or replicated and/or distributed to other persons without our
prior written consent. Before making an investment you should seek
further advice and form your own opinion about any investment. For a
specific investment information will be provided in separate documents.