A transformative year for SEACOR

“This year has been transformative for SEACOR and in order to provide context this release follows a slightly different format. The following comments are hopefully a useful update and perspective on recent transactions and our current business. This release focuses on continuing operations, inland river transport and logistics, and shipping services and provides results for the quarter.

As noted in the discussion of discontinued operations, in addition to the Spin-off of SEACOR Marine Holdings Inc., the company’s former Offshore Marine Services segment, SEACOR sold Illinois Corn Processing after the close of the calendar quarter. In addition to the gain of US$11.6 million, net of tax, noted below, the company also took out a final distribution of US$17.3 million before the sale. SEACOR acquired its initial 50% interest in ICP in 2009 for US$15.0 million and purchased an additional 20% interest in 2012 for US$9.1 million. The company received aggregate distributions of US$42.6 million in addition to the proceeds from the sale and calculated that this investment produced an approximate 25% internal rate of return on capital.

The most important post-June 30, 2017 events are the acquisition of International Shipholding Corporation (ISH) and the execution of a series of amendments and charter extensions for several of SEA-Vista’s tankers resulting in a substantial increase to SEA-Vista’s backlog.

The new charter extensions add approximately US$100 million in bareboat charter (net lease) revenue and increase SEA-Vista’s revenue backlog to approximately US$450 million. The backlog positions SEA-Vista to reduce debt and potentially capitalise on opportunity should the current oversupply of Jones Act coastwise equipment produce one. SEA-Vista expects to place its multi-grade chemical carrier in service in the spot market this August, after which it has no spot exposure until mid-2018.

The most exciting development is the successful culmination of many months working with ISH, its creditors and advisors to complete its exit from Chapter 11 bankruptcy as a subsidiary of SEACOR Holdings Inc. This acquisition capitalises on the shipping group’s technical management skills and, most importantly, diversifies our marine business.

• United Ocean Services operates three Jones Act dry bulk carriers which support the cross-Gulf trade of fertilizer, phosphate rock, coal, and petroleum coke. They are three of 17 Jones Act coastwise dry bulk carriers, but the largest in terms of cargo capacity and the most efficient to service their existing trade lanes. The ships are chartered through February 2018. Customers include Tampa Electric and the Mosaic Company. 
  
• CG Rail Inc. (CGR) is a short line railroad that operates two rail ferries, each capable of loading 113 railcars. CGR has terminal operations in Mobile and Coatzacoalcos, Mexico, allowing railcars to access its ships and transit more quickly than overland routes from the US and Canada to Mexico. CGR also has a full service rail car repair facility in Mobile, Alabama. 
  
• Central Gulf Lines, Inc. and Waterman Steamship Company (CGL), two long-established US based shipping lines, charter and operate US-flag vessels which are enrolled in the US government’s Maritime Security Program.  At present CGL is running four roll-on, roll-off vessels, generally referred to as ‘PCTC’s’ (Pure-Car-Truck-Carriers), moving US military cargo as well as commercial and US government-impelled cargo.

The ISH assets and businesses are an excellent complement to SEACOR Holding’s other business lines including: Shipping Services’ Harbor Towing operations, SEACOR Island Lines, SEA-Vista’s tanker operations, Seabulk Fleet Management services, and our joint venture interest in Trailer Bridge, a regional Jones Act liner operation that primarily moves cargo from Jacksonville to Puerto Rico.”

Read the article online at: https://www.drybulkmagazine.com/dry-bulk/07082017/a-transformative-year-for-seacor/