MPC Container Ships 'favours' Oslo for full listing

Executives say new boxship asset play company will join major exchange this year after $100m equity raise opens door to capital markets 

MPC Capital is set to list its new feedership asset play company on the Oslo Stock Exchange by the end of this year, having completed an initial $100m capital raise on the city’s over-the-counter market before Easter.

MPC Container Ships cut new turf as the first containership venture to raise funds in Oslo for almost a decade and its executives believe the capital markets will be a more regular source of funding for the sector in future.

Constantin Baack, chief executive of MPC Container Ships, said: “The goal is for the end of this year to have a listing on a reputable stock exchange. We also look at other options but at present we would favour the Oslo Stock Exchange to take the next step as well.”

In an interview with TradeWinds this week, Baack said that while Oslo is not a famous place for container investments, the city is familiar with public asset play companies across the dry bulk, tanker and offshore sectors.

As TradeWinds reported on its website last week, MPC Container Ships completed a $100m capital raise alongside Fearnley Securities, backed by a $25m contribution from MPC Capital and its main shareholder, the MPC Group.

Dr Axel Schroeder, chairman of the supervisory board of MPC Capital and managing partner of MPC Group, says the company has been building an institutional investment manager for real assets since 2012. Helped by two rights offerings last year, it has now convinced the capital markets it can manage such a business, he says.

“We think this is opening the door for structured finance in the future for this segment,” he said.

Schroeder says the new vehicle has been launched with “carefully good timing” in the right segment.

“We are not saying this is the perfect timing. We are saying this is safer timing than it has been over the past years. Given the situation, we need the capital markets for ship financing in future. It’s such a capital intensive business that you have to use the capital markets for it.”

MPC Container Ships will invest $32.1m in an initial fleet of eight vessels from various sources. This is some way from the $132.5m newbuilding cost of the same ships today, which have a scrap value of $18.5m.

Baack expects the feeder market to remain volatile during 2017 and 2018. However, he believes the downside protection offered by demolition prices is much more favourable than in other areas of the industry. At the same time, the vessels can be employed without burning cash.

Further growth is firmly on the agenda, with a fleet of 20 plus ships, on an all equity basis, in reach when the full $100m is set to work.

“As we go along, we would also consider some debt financing and would look at growing this investment company further by executing a second capital increase,” Baack said.

MPC presently sees two routes to exit the project. One is to create a platform with sufficient liquidity to trade the shares in the market and the other is via a direct sale of the assets. “We are not bound to either of these routes and would carefully consider both,” Baack said.