Dahlman Rose sees IPOs from 30 shippers by end '08

Dahlman Rose sees IPOs from 30 shippers by end '08
Jun 19, 2007
By Nick Carey

Within the next 18 months the maritime shipping sector could generate up to 30 initial public offerings due to global demand for everything from coal to consumer goods, an industry financier said on Tuesday.

"What's interesting in this sector is that we're seeing rising production combined with rapidly growing demand," said Simon Rose, chief executive of Dahlman Rose, a New York-based boutique investment bank for the energy supply chain sector.

He added that within a year the U.S. markets should see their first IPO from the operator of a fleet of special tankers used to store or move oil from offshore platforms.

Dahlman Rose is currently working on two other offerings that will be announced by the end of June, one in the coal industry, one in offshore drilling. Rose declined to give details.

He said the maritime shipping IPOs over the next 18 months will be primarily focused on the dry bulk sector, with a handful of container shipping companies that haul consumer goods in containers and oil tanker companies.

Dry bulk ships haul bulk commodities like coal, iron ore and agricultural products, with demand driven in part by rapidly growing Asian economies like China and India.

"We've seen a huge growth in iron ore and coal production, and ports are struggling to deal with the extra demand," Rose said. "We expect this situation will continue for some time."

Since Dahlman Rose was founded in 2004 -- Simon Rose is co-founder along with Ernest Dahlman -- the firm has lead managed or co-managed some 20 IPOs or secondary offerings worth around $3.8 billion, primarily in maritime shipping.

At the end of May, the firm opened a new group focused on exploration and production plus oilfield services, which Rose said reflected the global drive for new energy sources.

"We're going to see more deep sea drilling further offshore," Rose said. "Onshore, we're going to see opportunities for companies using different technologies to drill for oil."

Offshore platforms will require Floating Production, Storage and Offloading vessels (FPSOs) -- tankers specially designed to safely take and store oil from these platforms at sea, then transfer them to shuttle tankers to transport to shore.

Rose said there is investor interest in the United States in seeing an FPSO operator -- most operators are currently based in Norway -- either launch an IPO here or dual-list its stock on a U.S. market.

Earlier this month Dahlman Rose arranged the sale of 25.5 million shares of FPSO operator Sea Production, which were owned by Norwegian tanker company Frontline Ltd. , to institutional investors.

The investment bank is also lead manager on the sale of 2.05 million shares in a secondary offering for Tulsa, Oklahoma-based oil and gas exploration company Arena Resources Inc. , which should close Wednesday.

"Arena has done some tremendous work using new technologies in oilfields that were not worth drilling when oil was trading at far lower levels," Rose said.