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Stena Offers to Take Concordia Private Citing Vessel Values and Challenges

tanker
Stena Polaris is the only vessel in Concordia Maritime's fleet and it is on a long-term charter (Concordia Maritime)

Published Dec 12, 2023 5:34 PM by The Maritime Executive

 

Stena Sessan, the investment arm of the Stena Group, is proposing to acquire the remaining shares of Concordia Maritime in a take-private transaction which is being recommended to shareholders by Concordia. It is seen as the final step in an approximately two-year restructuring of the troubled tanker company and the most appropriate step based on current market valuations.

Concordia Maritime was set up 40 years ago listing on the Stockholm Stock Exchange in 1984 and building up a fleet of tankers. The company ran into financial troubles in recent years with a large burden of debt and payments after an ambitious fleet building program and the downturn in the oil markets. Stena moved to rescue the company and worked out a refinancing agreement with its banks and lenders.

During the past two years, Concordia Maritime began selling off vessels to pay down debt. Begun before the rebound in the tanker market, the company however benefitted from the strength of the tanker market ultimately selling 12 vessels, the last of which Stena Progress (65,200 dwt) built 2009 and Stena Premium (65,200 dwt) built in 2011 and both operating under long-term charter to Stena Bulk were sold in August 2023. 

Having started to lower its debt, Concordia took advantage of the strong tanker market and now has a net cash position but only holds one tanker. Stena Polaris built in 2010 operates under bareboat charter to Crowley Government Service and with the options the charter can currently run till 2030. 

Concordia Management said it was evaluating new business opportunities including new segments. In 2022, they had explored converting some of the tankers into containerships. Stena Sessan, which currently holds more than 52 percent of the company’s stock highlights however that the company would require significant additional capital. With high current vessel valuations, the directors have “deemed very challenging,” the ability to achieve significant capital injections to achieve this strategy.

Stena Sessan is offering SEK 9.80 ($0.94) per share valuing Concordia Maritime at approximately SEK 468 million ($44.8 million). It is a fixed price offer that will not be increased but they note it represents a 58 percent premium to the 90-day trading average. Further, the company’s only asset, Stena Polaris, was valued by three independent shipbrokers at $29 million.

The buyout is being offered as a means for the non-Stena shareholders to realize immediate cash value for their investment. Stena Sessan reports they will retain Stella Polaris on its existing charter and continue the company as a subsidiary. They plan to retain management and the employees while continuing to discuss future alternatives.

The offer for the shares of Concordia Maritime will launch this week and run till mid-January.