It takes courage to challenge Barcelona at the Cantera. In a certain sense, the challenge of D'Amico's top management is no less, which, to present the capital increase, has chosen the square of Oslo, the university of shipping analysts. But the operation which kicks off on Monday 12 November (closing on 11 December) is only the first step in "tackling one's growth plan in a rapidly developing market", as stated in the company note. A project which, among other things, requires more solid financial visibility, including the entry into the area of companies that have an investment grade rating, an objective largely within the reach of the pocket multinational which has in its portfolio, in addition to 102 ships, owns prestigious properties and holds more than 2% of Prysmian.
But how do you talk about these times of "strongly developing market"? What distinguishes this sector from others?
“Absolutely nothing” answers seraphic Giovanni Barberis, financial director of D'Amico for a few months after experiences of various kinds, from food to utilities (last positions in Hera and Acea). “Yes, industry experts don't see it that way. But I, as a neophyte, do not find any differences compared to other cyclical businesses. On the contrary, it closely reminds me of the dry-cured ham cycle: the skill consists in knowing how to buy when prices are low and to resell at the highest market prices”.
There is a certain difference between the charter of a ship and the purchase of two ounces of ham…
"I'm not saying no. In our case the skill consists in knowing how to buy and sell ships at the right time. Attention, I'm talking about ships, not freight rates”.
Not everyone succeeded…
“A ship that cost 50 million dollars no more than 3-4 years ago can now be bought for 30 million. At the time freight traveled around 40 thousand dollars, today around 12-13 thousand, even if there are interesting signs of a revival. We signed a five-year, $15.800 contract with a large energy operator. ”.
In short, you in shipping, excuse the pun, think about shopping. Or not?
“Those who bought at the top got hurt. But D'Amico has resumed buying now, at today's values, in anticipation of the recovery. The entrepreneur's skill, in this case, consists in moving at the right time. Provided, of course, he was wise enough to set aside part of the profits in the good years. As did D'Amico who, apart from the dividend paid to the shareholders, he took care to strengthen the assets ”.
Now, however, comes a capital increase, for what amount?
“About 85 million dollars. That is, the equivalent of 65,1 million euros to which, in the event of exercise of the warrants, the equivalent in dollars of 32,2 million dollars will be added”.
Why warrants?
“We have chosen a formula which, on the one hand, rewards old shareholders. On the other hand, at the end of the process, it will allow us to broaden the shareholding structure. The shares will be issued at €0,31, with a 5,34% discount on the November 5 listing and a 15,76% discount on the average of the last six months. The warrants will allow for the purchase of one new share for every three rights at a pre-set price in specific windows: 0,360 euro in January 2014; €0,400 in January 2015; €0,460 in January 2016”.
The price, according to your calculations, is affordable. But it is so?
“Evaluations in this industry are quite simple. The value of the company is given by the current price of the ships, calculated according to an international tariff that is updated in real time, minus the debts. The result, in our case, is equal to one dollar or 76 euro cents”.
But profits have shrunk in recent years...
“True, we faced the most stormy period of the post-war period. But the company in these extreme conditions was able to defend the break even line. Now it can face the recovery cycle with a young fleet, on average six and a half years old, and fierce".
What is the advantage of a young fleet?
“First of all, compliance with the necessary requirements to sail in North America where, after the Exxon Valdez, a double hull is mandatory. Second, the use of less polluting and more efficient fuels. Thirdly, ships suited to market demands”.
Will the money you raise be used to reduce your debts?
“Our group has assets three times higher than debts. No, that's not the reason: the goal is to maintain a healthy relationship between investments and assets: at the moment we are building four tankers and four ships for dry transport, which are not part of the listed company”.
The float limit remains.
“We know that more titles will have to be brought to market. As befits a company aiming to have a rating”.
