Tuesday, September 29, 2020
Pangaea Logistics Solutions Ltd. (PANL)
JV Interest Acquisition Enhances Fleet Profile
Pangaea Logistics Solutions Ltd and its subsidiaries provide seaborne drybulk transportation services. It transports drybulk cargos including grains, coal, iron, ore, pig, iron, hot briquetted iron, bauxite, alumina, cement clinker, dolomite and limestone. The firm’s services include cargo loading, cargo discharge, vessel chartering, voyage planning and technical vessel management. The company derives all of its revenues from contracts of affreightment, voyage charters and time charters. Its strategy depends on focusing on increasing strategic contracts of affreightment, expanding capacity and flexibility by increasing its owned fleet and increasing backhaul focus and fleet efficiency.
Poe Fratt, Senior Research Analyst, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
JV Acquisition Closed. PANL acquired an additional one-third equity interest in Nordic Bulk Holding Company (NBHC), a joint venture that owns six 1-A ice-class panamaxes, to increase its ownership to 66.7%. While the opportunity was unexpected, PANL was well positioned to execute quickly and make a very positive strategic move. All six panamaxes were built at Oshima Shipyard in Japan and PANL has a long history of operating the NBHC fleet. The acquisition price of $22.5 million is payable in four installments; cash of $15.0 million paid at closing and payments of $2.5 million over the next three years. There will be limited adjustments to our estimates since the joint venture is already consolidated.
Fleet renewal program intact. Combined with the sale of the Beothuk, a 2002-built Supramax in early August for $5.4 million, the acquisition improves the fleet profile and enhances the leading position in the ice-class market. We expect other older assets to be sold, especially as we approach the new build delivery dates next year …
This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.