ASSET GROWTH & FINANCING STRATEGY
Marsoft’s client, a leading North American ship leasing company, developed an innovative containership design that offers significant benefits in terms of lower capital costs and especially fuel consumption relative to its existing competition.
We conducted a competitive evaluation and concluded that, relative to ships then employed in selected trades, shippers could realize 13% to 40% reduction in shipping costs with these new ships. Our client has since invested more than $3 billion in a series of these new design ships.
Developed a highly customized version of Marsoft’s FLAGSHIP portfolio risk management platform for a leading European bank to reflect their specific bank practices, risk procedures and internal portfolio reporting requirements. The platform provides an integrated loan evaluation tool for regulatory and management reporting.
POSEIDON PRINCIPLES REPORTING
For several leading shipping banks, we produced the industry’s first Poseidon Principles (“PP”, the world’s first sector-specific decarbonization agreement among financial institutions) compliance analyses, which disclosed decarbonization impact and informed institutional decarbonization strategy. The service was developed in collaboration with leading shipping emissions expert UMAS. Our web application, FLAGSHIP for PP, offered automated support for IMO DCS data collection, climate alignment reporting, and UMAS estimates for data assurance and estimated reporting. Our Advanced PP Management services provided data assurance, diagnostics and benchmarking to help understand the factors contributing to climate alignment, as well as analyses of global drivers to interpret risks and opportunities systemic to particular ship types.
In order to facilitate compliance reporting for Poseidon Principles signatories, we developed an open-source neutral platform, the MarsoftConnector. The Connector offers a secure RESTful API platform by which class societies, banks, and third parties may exchange information necessary for Poseidon Principles reporting via a secure and fully automated process. Data is fully encrypted and is never stored, ensuring complete confidentiality.
For a leading Scandinavian bank led a due diligence review of a proposed restructuring for a large tanker operator. The review determined the value of participation in the upside from the restructuring and the strategy by which the bank obtain that participation in the restructuring process. We estimate that the upside participation strategy increased expected bank margins by 20 bps – 30 bps.
For a leading European bank defined and executed a $500 million portfolio restructuring including designing the structure and helping to raise new equity to support a new commercial and technical management team.
For a leading European bank evaluated restructuring options as it coped with a chapter XI proceeding. We evaluated resale options for the bank incorporating liquidity-related costs. The recommendation helped our client reduce their exposure by 30% by rapid resale of its assets.
FLEET RENEWAL ANALYSIS
For a shipowner evaluating its fleet renewal program, evaluated the benefits of ordering ships with conventional engine design versus ships with LNG propulsion. Provided a recommendation to the board based our comparison of the financial and environmental impact of the two options.
FUNDING & COST OF CAPITAL MANAGEMENT
Implemented a financial planning and reporting system for a leading European owner to support their rapidly growing borrowing requirements. Marsoft helped to implement a process to identify risks and mitigation options, quantify exposure, and communicate with the banks. The client successfully expanded borrowing by $250+ million at a time of reduced bank capacity, thereby minimizing equity requirements and reducing capital cost. Savings of $25 million/year relative to an all-equity strategy plus avoidance of delays of our client’s investment program were realized.
PRODUCT TANKER SHIPPING FUND
Evaluated the financial performance of an investment in a fleet of large product (LR2) tankers. The specific goals of the project are to help the joint venture evaluate the market risks and opportunities in different market scenarios and the financial performance of the fleet and the identification of the best combination of vessels to be acquired and the timing of those acquisitions.
Provided an independent financial analysis for a range of shipping projects in a private European fund including projected performance over 5 years as well as the consolidated returns of the Fund. Project-specific output and financial statements were provided under Marsoft’s base, high and low case scenarios, including put and/or call options and profit sharing.
ASSET PLAY EXECUTION
Created a tanker fund to enable institutional investors to participate in tanker “steel” asset plays. We helped deliver higher returns by choosing the timing and segment weighting that offered the best risk/return outlook. Our clients credit Marsoft with incremental 5% ROE pa, versus comparable alternatives.
Evaluated the business opportunity for an Asian oil major to partner with a potential ship owner to contract an MR product tanker and fix the ship on a long-term time charter to the oil major. Marsoft’s risk analysis signalled a 40% probability that the long-term charter would be more expensive than the one-year time charter market over seven years.
TRANSPORTATION COST/RISK MANAGEMENT
Developed an LNG transportation strategy for a client that substituted refits of existing tankers for newbuilding alternatives, thereby reducing capital costs by approximately $200 million per ship (for a fleet of twelve LNG tankers) and allowed the client to defer a costly contracting program.
Developed a cost and risk minimizing crude tanker chartering strategy for a Latin American oil major. The cost of long-term newbuilding charters (initially considered by our client to be the best option) at the time was $48,000/day; Marsoft’s recommendation had an average cost of $32,000/day. Savings to date amount to nearly $6 million/ship/year.
For a leading Indian industrial conglomerate, developed a chartering and contracting strategy which maximized gains from low Cape charter rates while minimizing the exposure to a possible rising market. The utility has deferred newbuilding investments and saved more than $6/tonne on its imports to date.