Polaris Shipping is switching its planned listing in Singapore to Oslo.
One shipping source familiar with the South Korean dry bulk player confirmed the company is intent on listing in Oslo, saying it has already met with a few securities companies in the Norwegian capital.
“It is now looking to hire a global coordinator this month,” said the shipping source. “It is moving to Oslo as investors there have a better understanding of the shipping market.
The market in Singapore is small and [the] valuation of shipping companies is low, while the ones in Oslo are valued higher.”
Officials at Polaris, an owner of large bulkers, were unavailable for comment as the company is closed for the Lunar New Year.
Stellar Daisy sinking
Polaris has been looking to list since 2013. Plans were foiled due to deteriorating financial markets and the sinking of the 266,100-dwt VLOC Stellar Daisy (built 1993). Converted to a VLOC from a tanker, the ship went down off Uruguay in 2017 with the loss of 22 crew.
Last month, South Korean maritime police were looking to issue an arrest warrant for Polaris chairman Kim Wan-joong over the tragedy. But TradeWinds is told by the shipping source that the Busan court rejected the warrant application.
Polaris' plans to go public are not without its challenges. Market sources have expressed scepticism over whether an initial public offering will succeed as dry bulk companies' shares are trading at a significant discount.
More importantly, the sources cite concerns over its continued use of older VLOCs converted from VLCCs, with 14 ore carriers built before 2000, including some that are more than one-quarter of a century old, ripe for demolition.
It is not true that KDB has negative thoughts of Polaris. The bank is already a major financier of the company’s new fleet.
Financial help cut
In financial markets, there are murmurs that Polaris is not getting further financial assistance from Korea Development Bank (KDB), which does not bode well for the company.
“It is not true that KDB has negative thoughts of Polaris,” said the source with knowledge of the company. “The bank is already a major financier of the company’s new fleet. ...
Another source said KDB has less than $300m of exposure to Polaris, through its financing of the newbuilding programme.
The collapse of a dam at Vale’s Feijao mine last month is said to have affected Polaris’ shipping business with the Brazilian mining giant.
However, the shipping source said output from the mine accounts for only 7.8 million tonnes per annum, while Vale’s annual output is about 400 million tonnes.
TradeWinds reports this week that the closure of the mine plus Vale's decommissioning of other dams in Brazil could cut output by up to 40 million tonnes per year.
“In 2015, Vale had a similar accident and that mine’s annual output was around 30 million tonnes. That event did not affect Polaris at all,” said the source. “Polaris transports about 10% of Vale’s iron ore export per year.”
Polaris was established in 2004 and its trading fleet of 34 bulkers is worth more than $1bn, with its 18 newbuildings priced at $1.46bn, according to VesselsValue.
Trond Lillestolen contributed to this story.
This story has been amended since publication to reflect that KDB currently has less than $300m in exposure to Polaris.