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Financial Mirror (Cyprus) - - FRONT PAGE -

An eq­uity fund es­tab­lished by bil­lion­aire in­vestor Wil­bur Ross has or­dered up to four suez­max tankers at a Chi­nese ship­yard, ex­pand­ing his bet on shipping by pur­chas­ing su­per­tankers for the first time.

Ross, a turn­around fi­nancier and chair­man of WL Ross & Co., or­dered four very large crude car­ri­ers due in 2016 and 2017 in a joint ven­ture with AWil­helm­sen AS, an Olso-based shipping company, he said at a con­fer­ence in New York.

Di­a­mond S Group Inc., a Green­wich, Con­necti­cut-based company con­trolled by Ross, or­dered the tankers with op­tions for four more due in 2016 and 2017, he said.

Ross said he re­mains con­fi­dent that the tanker mar­ket will re­cover even after weak freight rates scut­tled Di­a­mond S’s IPO ear­lier this year. Fuel-ef­fi­cient de­signs will help his ships com­pete while limited cap­i­tal will re­strain fleet growth, he said.

De­mand for tankers will out­pace global oil con­sump­tion be­cause sup­plies from Latin Amer­ica and West Africa have to travel far­ther to high-growth Asian economies than to North Amer­ica and Europe, Ross said. Suez­max de­mand grew about 4.9% a year be­tween 2010 and 2013, while de­mand for su­per­tankers rose 5.5% in the same pe­riod, he said. Those rates will slow to about 3.5% and 4%, re­spec­tively, as China’s econ­omy mod­er­ates, Ross es­ti­mates.

Tanker rates are still re­cov­er­ing from a glut of ves­sels after own­ers or­dered too many ships be­fore the global re­ces­sion. Av­er­age earn­ings for VLCCs, which hold 2 mln bar­rels of oil, fell 9.6% in the past year to $23,678 a day, com­pared with as much as $148,000 in 2008, ac­cord­ing to the Baltic Ex­change. Suez­maxes, which carry half as much crude, are earn­ing $35,686 a day, down from $170,000 in 2008, ac­cord­ing to the London-based rate pub­lisher.

This fol­lows news that WL Ross & Co. is seek­ing $1 bln to $2 bln for its next pri­vate-eq­uity fund.

The business news ser­vice Bloomberg said last month that the tar­get for Ross’ sixth main fund would ex­ceed the $640 mln the New York-based firm com­pleted rais­ing in 2012 while fall­ing short of the $4 bln it gath­ered for its fourth fund in 2007.

Ross, a for­mer re­struc­tur­ing ad­viser at global in­vest­ment bank Roth­schild Inc., started WL Ross with $440 mln in com­mit­ted cap­i­tal. Pre­vi­ous funds amassed dis­tressed hold­ings in steel, coal, tex­tiles and auto parts. He made it onto Forbes’ Au­gust 2014 list of the world’s billionaires, with a net worth of $2.9 bln.

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