Norway's Stolt-Nielsen is testing the waters in an Oslo bond market some shipping companies believed had all but closed during the coronavirus pandemic.
The chemical tanker owner has asked Danske Bank, DNB Markets, Nordea and Swedbank to arrange a series of meetings with investors about fixed-income financing, starting on Monday.
A three-year senior unsecured bond issue may follow, subject to market conditions, the company said.
Stolt-Nielsen could also carry out a conditional buyback of its NOK 1.5bn ($154m), 3.35% issue maturing in March 2021.
Otherwise, the proceeds from the potential bond issue will be used for general corporate purposes.
Chief financial officer Jens Gruner-Hegge told TradeWinds he could not reveal a target sum.
But he added: "We see an opportunity to raise some capital, so we think it's reasonable to give it a go."
Asked about other owners' views of the difficulties of selling new bond debt, he said: "We're only contemplating a transaction at this stage, so we are only talking to see what appetite there is out there."
Different approaches to fundraising
This month, American Shipping Co brought in financial advisors to help it refinance a bond issue worth $220m.
The unsecured debt was sold by the Oslo-listed shipowner's American Tanker subsidiary and does not mature until February 2022.
Arctic Securities, Clarksons Platou Securities, Pareto Securities and SEB have been tasked with seeking new sources of cash.
Odfjell is also trying to refinance an outstanding $82.5m of bonds due in the first quarter of 2021.
The chemical tanker owner believes a new bond issue may not be possible, so it is considering refinancing debt-free ships and is talking to banks about fresh liquidity.
And Norwegian shipowner Ocean Yield's chief executive Lars Solbakken told analysts in May that its strong position as a vessel sale-and-leaseback company is partly to do with banks being more conservative, and partly because it is also seeing increased demand as a result of the bond market "being more or less closed for shipping at the moment".
Stolt-Nielsen chief executive Niels Stolt-Nielsen said in April that the company had just over $500m in available liquidity at the end of the first quarter following a $140m bond issue in early February, the last time the window was open and busy.
This allowed it to pay off its April bond maturity in cash.
Terminals could be used to raise money
The group also has five unencumbered tank terminals that can be used to raise further liquidity so that it is in a position to repay the March 2021 bond should the bond market be closed, he added.
The shipowner has been preparing to tear up deals for some scrubber retrofits to save money during the coronavirus pandemic.
The move is part of a plan by Stolt-Nielsen to combat a potential demand drop of 40%.
The company logged its first loss in 64 consecutive quarters in April, ending its first quarter to 29 February $20.2m in the red.
Stolt-Nielsen has also agreed substantial pay cuts ahead of an inevitable slowdown due to coronavirus.
It said the senior management team will bank 20% less, backdated to 1 April, while board members will take only half their pay.
The company did not say how long these reductions would last.
