independent

Wednesday 16 April 2014

Ardmore Group to raise €125m in US float

Cork shipping firm aims to bulk up its fleet by buying new vessels

CORK shipping firm Ardmore Group is moving towards a flotation on the NYSE stock market with plans to raise about €125m from investors.

The company, which was set up in Cork just three years ago, has appointed Morgan Stanley, Jefferies and Clarkson Capital Markets as advisers, ahead of its initial public offering, according to a preliminary prospectus.

The firm has also filed "intention to float" documents with the US Securities and Exchange Commission.

Proceeds from the IPO would primarily be used for purchasing vessels for its fleet, the company said in a filing.

"Our business strategy is based in part upon the expansion of our fleet through the purchase of additional vessels. We estimate, based upon current and anticipated market conditions, our capital expenditures on the acquisition of vessels in 2013 and 2014 will be between $300m (€233m) and $400m, which assumes that we successfully complete this offering."

The Mahon-headquartered company, owned via the Marshall Islands, is backed by private equity group Greenbriar Equity. Headed up by Cork-based Anthony Gurnee, the management team includes ex-Teekay Marine vice-president Mark Cameron and former Ernst & Young manager Paul Tivnan. Former Aer Lingus CFO Brian Dunne is a non-executive director of Ardmore Shipping Ltd.

The company's fleet consists of 12 vessels including eight in operation and four on order, which are to be delivered early next year. The firm also has "letters of intent" for another six vessels and "options" on another four ships. Apart from the €125m that it plans to raise from the upcoming IPO, Ardmore will have further firepower with a €181m credit line.

"We believe that the market for mid-size product and chemical tankers is in the early stages of a recovery from cyclical lows, resulting from strong underlying demand growth driven by both cyclical and secular trends, as well as a reduction in the supply overhang due to reduced ordering activity and an extended period of fleet growth at a rate below that of demand growth," the prospectus notes.

Ardmore, which began operations in 2010, reported a loss of $4.5m on revenue of $25.17m for 2012.

The proposed flotation of Ardmore Shipping is the latest in a series of Irish companies heading for stock market listings. Last week, it emerged that Green Property was to float a €200m real-estate vehicle. Video game firm Keywords Studios has announced plans to raise over €12m on London's AIM market shortly. Eddie O'Connor's Mainstream Renewables and Liam Casey's PCH International have both been linked with stock market flotations, although the firms are likely to seek full market listings in Asia.

Last week, Paul Coulson's Ardagh received a massive setback in its move towards a €3bn US float, when US regulators decided to probe its €1.7bn buyout of Verallia's North American operations.

It had been expected that Ardagh would list in New York in the autumn. These plans must now be shelved as US regulators will not kick off their competition probe until January 2014.

Irish Independent

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