Wilbur Ross, Forbes 578th billionaire with 2.2 billion US dollars and founder of the investment firm WL Ross & Co., is now considering to further exploit his fortune into shipping by possible takeover of LNG carries and LPG carriers. Less tonnage supply and higher charter rate make them more attractive to purchase. His move comes in light of traditional shipowners are under widespread financial distress in this depressed shipping market.
The combined market value of the world’s 80 biggest publicly traded shipping companies plunged by $101.7 billion in the four years to March 23, according to figures compiled by Bloomberg. Ship owners especially small individuals ones with less vessels have to charter their ship at a bottom rate even below levels to cover the operating cost, which leads to many bankruptcies and loan breaches as we can see today. Their vessels have to be force sale at a much lower price.
Last October the Ross lead shipping newcomer Diamond S Shipping had already acquired 30 medium range product tankers and related charters from Cido Shipping of Hong Kong. Those vessels were built between 2007 and 2010, relatively new ones, and under long term with a number of global renowned shipping companies, including A.P. Moeller, d\'Amico, Hyundai Merchant Marine, Overseas Shipholding Group and ST Shipping at the time of transaction. They also have ten newbuildings in Korean yard to be delivered starting this year including 8 Suezmax crude oil tankers and 2 Aframax product tankers. The deal was backed WL Ross & Co., First Reserve Corporation and some other institutional investors, noteworthy China Investment Corporation is one of that group. With this one of the youngest fleet in oil transportation industry, Diamond S Shipping has a unique advatange to meet the demands from major ennergy companies for environment friendly, fuel efficient vessels.
Up to now, more than 1.3 billion US dollars have been injected into Diamond S Shipping. Also with a good relation with big shipping finance banks like Nordea Bank Finland and DnB Nor Bank ASA. It is really the time for Ross to catch some bottom fish right before the dawn of recovery.