Clipper refinancing paves way for bulker expansion

Danish group sells 16 ships and streamlines global operations but remains bullish on the dry market

Denmark's Clipper Group has cleared the way for an expansion in bulkers after refinancing its bank debt.

The privately-held shipowner's "robust" funding agreement secured in 2014 was due to mature in early 2018.

But the group has now concluded a new long-term deal that will allow it to reduce borrowing levels and further grow its bulk business, the company says.

"With the new financing agreement in place, the group has adequate capital resources for the coming years," Clipper said.

When pressed on the terms of the deal, the group told TradeWinds: "The details of our refinancing agreement are between us and our creditors."

But the outfit confirms the new deal has meant various assets being pledged as security and others being sold.

Clipper says it has disposed of 16 vessels as a result.

The company tells TradeWinds the sales included its last four multipurpose carriers and certain bulkers.

"The sold bulk carriers remain in Clipper's commercial and technical control," it added.

Clipper has grown its operated fleet of handysize and supramax bulkers from 100 to 150 vessels in recent times.

The in-house technical management division runs about 30 ships.

The company is also restructuring its global offices, closing five bases in the US, Brazil, Singapore and China.

But Clipper rebuts market speculation that the closures were a condition of the refinancing.

"Our new long-term financing agreement was already agreed at the time of publishing the [annual] report. The consolidation of our bulk business is a decision taken by Clipper's management," it said.

Clipper says most of the chartering and operations staff affected by the changes will be invited to relocate to Houston, Copenhagen or Hong Kong.

"The immediate layoffs are limited to fewer than 10 employees, mainly in functions that we are centralising to Copenhagen," it added.

"We truly hope that many of them will accept the offer to move. Our intention is not to be fewer people, but to be centralised in fewer locations, to create dynamic workplaces with strong competent teams.

"We have worked towards streamlining the set-up for Clipper, and not least the bulk part of it. The consolidation of our bulk offices is an important step towards the agile company we want to be, and now we are ready to [do] it. Our future lies in bulk handysize and supramax."

It says that Houston is a central location from which to cover both North and South America, including the Caribbean basin and the Mexican Gulf — both in terms of growing its presence in the region and visiting clients across the Americas.

"We have established niche businesses, such as Clipper Steel Services, operated from Houston and port partnerships in Mexico and Colombia," it said.

Hong Kong is viewed as a natural location from which to grow its presence in Asia and the Pacific, and a gateway to the Chinese parcel business that it entered in early 2017.

"With Houston and Hong Kong we maintain global presence and are confident that these hubs can take over the existing spot business from the offices closing in the regions," the group added.

"Now, we implement the changes and roll up our sleeves to a new more agile way of working."

TradeWinds reported in the summer that Clipper was set to dispose of four handysize bulkers ordered at Japanese-owned Tsuji Heavy Industries in China.

The vessels up for inspection were the 30,000-dwt Clipper Tradition, Clipper Titan (both built 2009), Clipper Trader (built 2008) and Clipper Terminus (built 2010).

Clipper sold three other handysizes this year. The 28,300-dwt bulker Clipper Lotus (built 2010) achieved $7.5m in January. The 32,000-dwt Clipper Kastoria went for $9.2m in March and sistership Clipper Selo (both built 2011) went for the same price in April.

Up to 2010, it took delivery of 12 sisterships from the yard, which collapsed after the shipping market crash in 2008. Clipper originally ordered as many as 42 handysizes with an average price of $23m each.