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Eagle Bulk Shipping Inc. Message Board

  • tencjedd tencjedd Feb 13, 2013 3:28 PM Flag

    Another dip in supramax asset values

    In the supramax sector we can report the ‘Sky Mariner’ (54k dwt, 05,
    Imabari) was sold last week for a price region USD 15.75 mill basis SS/DD
    passed to Greeks.

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    • worrying about the asset value of a fleet when none of them are for sale is a pointless endeavor. with the note not due for any restructuring until 2017 even more futile. investing in shipping is less about NAV and more about FCF. depreciation is the dirty secret of all shippers hence the only reason they are publicly offered. your misery is going to prevail in this segment if NAV keeps you up at night.

      • 1 Reply to up1.down2
      • Ok, so tell me what Eagle's FCF is? Oh that's right, it doesn't have any FCF! It's negative! And the bank has first call on any FCF that results in cash on hand exceeding $20M until the LTV is corrected. So knowing what the NAV is for Eagle is extremely important. And for the record, shipping companies have traded around adjusted NAV for the better part of the past 20 years. I'm in the industry, I should know.

    • maybe you have it all wrong and a possible buyout is coming? New fleet and maersk has been looking

      • 2 Replies to mcallan90
      • the point made by tencjedd is precisely why people are short this name - even with all the wild swings and very-much-compressed share price. there really isnt much to buy. the company has a very negative NAV. though stranger things have happened....the shorts are making the assumption that no one will pay "x" for a company that is worth "x minus $350mm" or so.

        while the value of the ships could of course increase - there are too many newbuilds rolling off the blocks just about every day - increasing the supply of supras significantly. as pointed out by tencjedd - these ships are not just newer...they are simply better ships. so even if the market turns in due course...each day it doesnt, is a day these ships lose value...and will have a hard time maintaining a value anywhere near what the bank is owed.

        so my question to you is this: do you have a strong supra rate forecast that no one else has or are you looking at a dry bulk company at a "cheap" price and assuming this is the time to buy, because blood is indeed "running in the street"? or - do you really think this is a buyout candidate?

        if "you know something we dont know" about supra rates or a potential buyout, it's in your best interest to post that info here - and maybe convince some shorts to cover. that would help your long position i believe.


      • Answer one question...why would someone buy Eagle even at $50M market cap, and the assumption of $1.14B in debt, when you get 45 vessels with an average age of 6.5 years old. That's over $26.4M per vessel. Those ships are only worth an average of $18.5M each. You could go and buy 45 brand new vessels, with better fuel consumption (i.e., lower operating cost economics), for less then you what you pay for Eagle.

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