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Author: Hohum77 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 3157  
Subject: Dry Bulk Update: June 2009 Date: 7/1/2009 2:57 AM
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One topic in major news media is the market run-up in Q2. A few
Dry Bulk companies had a good Q2, but to really see the impact for
the Dry Bulk sector, shift the quarter by 30 days (Mar 1 - May 31).
If it were only that easy to notice at the time

Shipper	31-Dec	30-Jan	27-Feb	27-Mar	30-Apr	29-May	30-Jun 
BHO* 2.50 3.70 2.10 2.38 4.50 4.28 4.05
DSX* 12.76 13.29 11.73 13.20 15.70 18.03 13.32
DRYS* 10.66 6.63 3.47 5.86 7.42 8.19 5.78
EXM* 7.04 6.60 3.86 5.31 7.11 10.70 6.73
EGLE* 6.82 5.34 3.76 4.72 6.52 7.78 4.71
ESEA 4.30 4.53 4.26 4.14 4.80 5.90 4.78
FREE 1.39 1.28 0.73 1.48 1.36 2.59 2.17
GNK* 14.80 15.55 12.27 13.87 19.10 26.15 21.72
NM 3.16 3.58 2.11 2.64 4.13 5.49 4.23
NMM 7.14 8.17 7.79 8.71 10.29 10.25 9.95
OCNF* 2.97 3.52 1.01 1.55 1.27 1.69 1.51
PRGN 4.75 5.25 3.72 3.72 3.24 5.28 3.64
SBLK 2.55 2.20 1.47 2.46 3.07 4.87 3.67
TBSI* 10.03 9.84 6.47 7.58 7.93 9.77 7.81
SB 6.68 6.30 3.80 3.39 4.26 7.50 6.56
ULTR* 3.19 2.28 2.06 2.68 3.72 4.81 4.43

"Marine Money week" ended last Friday. That's the shindig that gets
shipping execs and investment/finance folks together. One news item
from that meeting, $5B in orders/only $2B in financing and Commercial banks (paraphrasing)- don't look to us, we can't fund those purchases.

Opportunities are out there, how are companies taking advantage?

Start with the biggest newbuild acquisition story
NM takes ownership of 4 new Cape vessels for $324.5M with $240M in financing in place. Better still, the vessels have charters of 5 yrs, 10 yrs, 12 yrs, 12 yrs.

SB has completed multiple deals.
i. Taking a newbuild Cape earlier than planned, and canceled a separate Cape order.
ii. Delayed delivery of newbuild Post-Panamax vessel
iii. Delayed delivery of a second Cape vessel
iv. Sold an existing Panamax vessel.
(Link covers the first three events)

OCNF also completed multiple transactions
i. Sold an existing 1996 built Panamax for $21.95M
ii. Acquire a 2001 built Panamax for $25M
iii. Acquire a 2004 built Cape for $56M

ESEA acquiring a 2000 built Panamax for $27.5M with an existing charter. Since the company laid up a couple of container vessels, it
probably needs the additional revenue

SBLK announced a 5c/sh dividend for Q2

DRYS settled the last of its debt financing.

So what's next? Well, DSX had a secondary to raise funds and
OCNF still has $40M - $50M left to spend. My guess is that if
wants to acquire a newbuild, it probably has to be a deal similar to
NM i.e. a bank owns the vessels after previous owner failed
to complete financing. I suspect prospective buyer will need to bring
(significant) cash to the table.

I think OCNF did well with its transactions. Gain 5 years on
age of a Panamax vessel, and only pay $3M for that opportunity. Perhaps
other companies looking at 2nd hand vessels will use a similar approach.

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