Himalaya Shipping Launches $45M IPO on the NYSE

Himalaya Shipping, the operator of HFO-LNG dual-fuel bulkers, has announced the launch of a $45 million IPO on the NYSE. 

The underwriters of the sale will have the option to buy another $6.7 million worth of shares at the IPO price to cover overallotments. The proceeds will go towards paying for the 10 vessels it has on order, among other purposes. DNB Markets leads the underwriting team, along with Clarksons Securities.

The IPO will be priced at about the same level as Himalaya's shares on the Euronext Expand exchange in Oslo. 

Himalaya has two Newcastlemax bulkers in operation and 10 more on order, all with New Times Shipbuilding in China. The company plans to deliver the major bulk commodities from Australia and Brazil to the Chinese market, including iron ore, coal, and bauxite.

The firm's vessels carry giant LNG fuel tanks in cradles on either side of the deck house, each labeled "LNG" in green characters. The tanks straddle an extra-large stack, reflecting an innovative feature: these ships combine both an LNG fuel system and an exhaust gas scrubber. The scrubber is unnecessary for an LNG-powered voyage, but it allows these ships to legally operate on heavy fuel oil, the industry's least-cost energy source. The installation acknowledges the reality of LNG dual-fuel power today: when LNG prices spike, LNG-fueled oceangoing ships switch to fuel oil, and HFO is the most affordable fuel oil grade. 

At the time of contract signing for the scrubber order in August 2022, Himalaya predicted that the scrubber installation would save $7,500 per day when sailing, and would see enough use to pay for itself in 1.5 years.