I trust the executive leadership of NNA quite a bit more than GSL, which is why I'm not currently holding GSL anymore until I get a clue about what the deal is with Ian and the GSL board and CMA CGM. This ship appears rudderless, at least temporarily.
I too hold significant (for me) positions in NNA and SFL, although not as significant as my GSL stake. You are exactly right though. In NNA's case, share price has languished BUT management is aggressively deal making picking up tonnage at hopefully what will be viewed as depressed prices. While we wait, I have no problem collecting a ~5% yield. Same with SFL except they have a ~9% dividend yield (and some stock price appreciation). GSL has neither additional stock appreciation nor yield nor have they announced any deals with this gigantic cash infusion and freedom from debt covenants. NNA has tapped their equity to generate capital to grow their fleet in this down shipping cycle. They have a diverse customer base as well. My cost basis on my GSL stake is below $2.00 so I'm not horribly disappointed, but I do wish I had exited more aggressively at the two pops that we have had above 6. I did sell about 15% of my stake but kicking myself for being greedy expecting those levels to be sustained WITH a dividend announcement. Come on Ian, time to stop playing 4 corners and deal. The GSL ships are aging and as above market contracts eventually roll off, we'll be in a world of hurt without a replenishment and growth strategy!
As a shareholder in NNA, you are right that they are being pro-active and active in deals, but where has all that been reflected in their share price? It has been languishing below $3.80 (for the most part) for quite some time now. Frankly, I'm getting frustrated with that holding as well. At least NNA pays a decent dividend to be patient.
Like Bearle61, my patience was exhausted about 2 weeks ago. I divested myself of all GSL (20k at $4.21) about two weeks ago and rolled it into NRF ahead of their spin-off event. I cannot tell you how happy and pleased I am that I pulled the trigger and unloaded my GSL.
I'm a big believer in shipping and plan to invest in the sector. I may venture back into GSL if it retreats back to mid 3s, and will continue to track and keep my eye on it.
I sold because of a few reasons:
1) Uncertain ownership structure. I am not convinced that management is concerned about common shareholders in the slightest. I am concerned about possible manipulation by CMA CGM.
2) No news and weak volume. I'm sure, like many of you, I had held more shares than the avg daily volume and that makes me very nervous. I was concerned about the ability to exit GSL.
3) I believe a rebound in BDI will be coming, but I guess I'd rather be with NMM or a company that pays me a healthy dividend now while I wait for that to occur.
I'll continue to watch GSL and may re-enter. Best of luck to all.
I thought China tanked the P3 alliance idea recently, but maybe I missed the latest news. At any rate, with GSL, I'm not too concerned about short term market rates. As Berle and Mdx mentioned, to me the big disappointment has been GSL's inability to utilize their new debt structure in an accretive manner (or at all, really). So much extra interest expense with nothing to show for it... I hope they've got something big planned or else management is really going to look like a bunch of foul-ups.
It is frustrating to look at all the things you mentioned regarding other shipping companies. But we have had some recent positive gamechanger situations which you would hope would payoff in the immediate future. The recent P3 alliance deal is pretty great news and the Xpress Feeder deal was also great news. And I think you have to expect a dividend soon, or else why do the refinancing?
It has been quiet! Until Ian announces something (anything) either deal wise or dividend wise, I suspect that will be the case. I was not in favor of the financial restructuring and so far all we have to show for it is higher interest expense and a further depressed stock price. Once again we see a gentle bleed down on low volume as there is just nothing to get excited about. No growth, no dividend and now higher interest expense. Why would I buy at these prices? I have been an advocate for a long time (2009) but even my patience has worn thin. I look at a company like SFL or NNA that seem to announce new deals every quarter (and pay decent dividends) and I wonder why I continue to hold a large block of GSL.
Just so Yahoo doesn't close our board for lack of posts:
Will the P3 Network be a game changer for container shipping?
By Marcus Hand from Singapore
The announcement of the container shipping alliance P3 Network between Maersk Line, CMA CGM and Mediterranean Shipping Co (MSC) is one that could truly warrant the tag of being a “game changer”.
The grouping of the world’s three largest container lines on the major east – west trades will be a formidable one. The numbers alone are impressive and the alliance is set to start out with 2.6m teu in capacity across 255 vessels on 29 loops on three trade lanes – Asia-Europe, transpacific and transatlantic.
On a global level the three lines have a combined 37.1% share of boxship capacity with 6.3m teu in a capacity according to figures from analyst Alphaliner, so the alliance will control roughly 41% of this capacity. The alliance will also have the largest boxships in service with Maersk’s 18,000 teu Triple-E types and CMA CGM 16,020 teu capacity vessels.
The lines cited declining volume growth and overcapacity in recent years as the reasons behind the formation of the alliance and also noted that this had promoted the formation of other mega-alliances such as G6 and CKYH.
Mega-alliances are a way of creating consolidation in an industry sector where mergers and acquisitions (M&A) have proved difficult, Hapag-Lloyd and Hamburg Süd's recent failed merger attempt is a prime example. Even the leader in M&A, Maersk Line, only controls 15.1% of the global fleet having swallowed up both Sealand and P&O Nedlloyd.
As yet though mega-alliance are yet to bring stability to container shipping and the latest freight rate war sees lines struggling for profitability yet again. It will be interesting to see, regulatory approvals allowing, if the P3 Network will be large enough to give the three lines the required influence over the market to bring much needed stability to the main container trades.
Anyone have any idea why we're on a mini run? Don't know if it's just the market in general or if there's some recent news I don't know about.
Who knows! I think I will avoid GSL until some of this murkiness is resolved. If I miss a big move up then so be it.
Guess it means CMA CGM is definatly taking over the board, but the question is if that's good, bad, or just more of the same. And what would it mean for our dividend speculation if CMA CGM had full control? I'd also think that maybe it means the earlier guess about a buyout of GSL may not be true, because why would Gross sell his equity if he thought there was a chance that might happen?
Note the new item- the registration statement explicitly contemplates the sale by Michael Gross of all of his equity. Any thoughts on what the upshot is here? Clearly there is a specific plan behind this, but I don't know whether CMA CGM is the instigator here (and, if so, what their goal is). Any thoughts on how the puzzle pieces fit together?
Nothing official yet on the divvy. The play here is now can they grow the fleet accretively? I hope they just don't sit on the extra cash twiddling their thumbs and paying the extra interest.
I don't want to guess on a dividend until GSL officially announces they will have one. It was mentioned in the meeting, but they didn't actually say they were having one, correct?
I agree with this. A few other things to note though:
1. I get to around $0.24/share based on the current indenture restrictions on restricted payments (which limit dividends to 50% of CNI). Extra cash above that amount will still be generated (I would guess around $25 million/year or so), but it will not be available for distribution to shareholders.
2. GSL is sitting on a ton of cash that can be used for acquisitions. Hopefully they will be able to make that happen in a way that is accretive to net income (in which case, there would be more cash available for distribution under the indenture).
I think due to several factors, the latest dividend estimate has been shaved down to around $0.24 per year and not $0.60. Even that is up in the air due to refinanced debt, potential boardroom instability, and maybe opting to invest in growth for now instead of reinstating the dividend.