A Man is Known by the Company he Keeps

This post will run very long, predominantly because I have copy/pasted articles from a publication that you have to register for – TradeWinds. I thought I’d save you guys the time.

This is effectively a follow on from the Jens Jensen: Nobody Does It Better thread that I thought warranted its own thread. I think you’ll agree.

We all know, or at least should know by now the importance of management in helping us realise our investment success, as top class management brings with it a track record of success and business acumen. And success breeds success. Top management also brings with it an extensive network of serially successful people who can be called upon to help further common goals. In business, the common goal usually revolves around making money.

This brings us to a quote that all of us know attributed to Aesop of Aesop’s Fables fame, “A man is known by the company he keeps”.

If you Google Jens Jensen and start digging around, you will find that he’s a director of an Oslo-OTC listed 2020 Bulkers. However, what’s of greater interest to me is the “company he keeps” on this board of directors and how they have gone about their business as it may shine some light on GEV and the course it will navigate to success.

The 600lb gorilla at 2020 Bulkers is Tor Olav Troim, yet another protégé of none other than shipping magnate, John Fredriksen. Troim is also currently the Chairman of Golar LNG, an LNG shipping company with which he has been involved since its incorporation in 2001. In short, TOT is a BFD in the world of shipping and one of JJ’s mates. It’s further anecdotal evidence – not that I needed it; of the credentials of JJ.

You’ll notice that 2020 Bulkers was listed initially on Oslo-OTC and is now working on a listing on a “recognized exchange”. I wouldn’t be surprised to see GEV follow a similar path. Similarly, you’ll notice how Troim is wanting to do something with stranded gas. What is GEV doing??? And if my memory serves me correctly, Golar was an early investor in MB’s last venture, LNG. You’ll also see the name of Clarksons – the same group GEV is using to broker its ships. IMHO, these coincidences are not coincidental.

To summarise, the more I research the GEV story, the more convinced I am that this stock is ridiculously cheap and when the rerating comes, it will be quick, ongoing and definitely worth the wait.

Enjoy the articles.


https://www.tradewindsnews.com/drycargo/1479992/2020-bulkers-opts-for-scrubbers-on-new-ships
2020 Bulkers opts for scrubbers on new ships
Tor Olav Troim-backed owner fitting exhaust cleaners on eight newcastlemaxes.
April 26th, 2018 11:14 GMT

Tor Olav Troim-backed owner 2020 Bulkers has decided to install scrubbers on the eight newcastlemaxes it has ordered at China’s New Times Shipyard.
This was confirmed to TradeWinds by company chairman Magnus Halvorsen.
The scrubbers cost $2m per ship and come in addition to the contract price announced earlier.
The 208,000-dwt bulkers were ordered late last year for between $44.2m and $44.7m.
Halvorsen told TradeWinds last month that Chinese shipyards are quoting a price closer to $50m for newcastlemaxes for delivery in 2020.
The company says the investment in scrubber systems is expected to generate improved earnings as the vessels will be able to operate on heavy fuel instead of more expensive marine gas oil, while staying compliant with the new IMO global sulphur cap being introduced on 1 January 2020.
2020 Bulkers has conducted another private placement raising net proceeds of $9m, which will partly be used to pay instalments. So far the company has raised $37m in equity.
Troim’s former partner John Fredriksen also has newcastlemaxes on order at New Times.
Troim has got several former Fredriksen employees involved, including board member Jens Martin Jensen and investors Fredrik Halvorsen and Espen Westeren.
2020 Bulkers made its debut on the Oslo OTC list in December at NOK 16.3 ($2m) and has increased to NOK 43 in thin trading.

https://www.tradewindsnews.com/gas/1600920/troim-sees-parallels-between-stranded-gas-and-salmon
Troim sees parallels between stranded gas and salmon
As he did with Fredriksen in the farmed fish sector, Golar LNG boss spots a cheap opportunity
October 11th, 2018 17:00 GMT

Golar LNG chairman Tor Olav Troim believes a dynamic approach is needed to build out the small-scale shipping sector to help develop the world’s stranded gas reserves.
And he is applying his experience in the salmon industry to make this happen.
Speaking to TradeWinds on the sidelines of Rystad Energy’s Annual Summit in London, Troim said: “What we need in this industry is much more smaller ships in order to open the market.
“We need sushi shops effectively to eat more salmon,” he added, reflecting on his earlier comments to the meeting on how he and former business partner John Fredriksen developed the farmed salmon industry.
Troim does not put a figure on how big newly-formed Avenir LNG — the Golar LNG, Stolt-Nielsen and Hoegh LNG joint venture — might grow.
“I never have a plan for things. When we started Borr [Drilling], I thought it would be two or three rigs. Now we have bought 63.”
But he added: “It is happening quickly. You have to be dynamic, and it depends on how many ships are ordered by others. stock
Timing is critical
“I’m dead convinced that this is so right to order small-scale LNG ships right now because we see the demand on what Stolt-Nielsen has ordered already. They probably have about 10 charter requests for all of them.”
In the past few days, Stolt-Nielsen confirmed it has upped its small-scale ship order to four 7,500-cbm vessels and is contracting two 20,000-cbm LNG carriers.
“This [Avenir] is a great company and I think it now has three strong owners and it will go public, so you have that access to money as well,” Troim said. “I think it is fun to do things together with others. I’m super-excited.”
He confirmed that GasLog had been in the original line-up for Avenir LNG, but he suggested that Golar and Hoegh’s combined access to 18 floating storage and regasification units made the latter the better fit.
Troim told the meeting he sees parallels between the growth of the salmon industry, and stranded gas and the vessels needed to develop it.
He said that when he and Fredriksen entered the salmon-farming industry in 2005, it was in the same shape as the oil industry in 2015, and “everything was bankrupt”.
His research report to Fredriksen read: “cheap and healthy”. The pair began buying salmon businesses at a time when they were considered expensive, and consolidated 30% of the market.
“We managed to create that demand. When people get used to salmon, they don’t go to something else. They get hooked on it,” Troim said. “Today, [the] price for that salmon capacity is 10 times what it was when we bought it and today everyone says it is cheap.
“It is the same with stranded gas today. You can effectively buy your FEED [front-end engineering and design] today with negative value on the gas. People may laugh about it 10 years from now. It is a unique opportunity but we have to work together on it.”

https://www.tradewindsnews.com/dryc...0-bulkers-plan-and-will-now-take-in-newbuilds
Troim flips 2020 Bulkers plan and will now take in newbuilds
October 18th, 2018 07:16 GMT

Tor Olav Troim has pivoted in his plan for the eight newcastlemax newbuildings in the fleet of 2020 Bulkers.
The company was launched as an asset play but now intends to keep the ships it has on order at New Times Shipyard in China.
Chairman Magnus Halvorsen says 2020 Bulkers is planning to built up a “small, but effective organization, with a view to take a delivery of and operate the ships”.
He says the vessels have been well received in the market. "We have seen what kind of premium charterers are willing to pay for a scrubber fitted newcastlemax compared to a standard capesize," he said.
"This, combined with a low contract price, is a good foundation to pay out substantial dividends to our shareholders."
The eight newbuildings are already solidly in the money.
They were ordered for between $44.2m and $44.7m each. Clarksons puts the newbuilding price for a capesize at $50m, so a newcastlemax with scrubbers would likely cost some $4m to $4.5m more.
The 2020 Bulkers ships are set for delivery between September next year and May 2020.
There are few newcastlemaxes newbuilding slots available before 2021 today, so this could add an additional premium to their value.
Halvorsen declined to comment on the price estimates. But he says 2020 Bulkers will not consider adding additional tonnage right now as yard prices are considerably higher, and delivery times less attractive, than when the company started.
2020 Bulkers has raised another $6m in the market to meet payments on the newbuildings.
The company is considering a full listing next year, with management believing the company is well suited to a US exchange.
Troim spent much of his career as the right hand man of John Fredriksen, who also has newcastlemaxes on order at New Times.

https://www.tradewindsnews.com/dryc...loan-key-hires-and-first-contract-in-the-bank
2020 Bulkers eyes listing with fresh loan, key hires and first contract in the bank
Tor Olav Troim's dry cargo venture reveals host of major updates as it begins efforts to float on a major stock exchange.
January 11th, 2019 17:35 GMT
Tor Olav Troim’s 2020 Bulkers has secured a major loan for its newcastlemax newbuilding programme and has begun working on a full stock listing.
The shipowner has also revealed a time charter for one of its eight newcastlemax newbuildings, which will begin to deliver in September this year.
The developments came as Oslo-OTC listed 2020 Bulkers appointed two new directors, switched Magnus Halvorsen from the chairman to chief executive’s seat and hired former Frontline chief technical director Olav Eikrem.
The details all came to light in an update to investors today, which showed the company is acting on a plan to become an operator of the vessels rather than a simple asset play.
2020 Bulkers said a term sheet for a long-term bank loan running to $240m had been signed today.
The facility carries an interest of Libor plus 250 basis points, has an 18-year repayment profile for the principle amount and a balloon repayment after five years.
“Longer term, the company may consider other capital structures, including an all-equity financing structure, thereby giving additional flexibility with respect to dividend distributions,” 2020 Bulkers said.
The shipowner has made $67.6m in yard payments on the giant vessels at New Times in China and has $305.9m to pay on the bulkers.
It has previously raised $70m in equity in small volumes when yard payments fell due and has previously earmarked this year for a stock listing in the US.
Today it said: “The board has also resolved that the company should list on a recognised stock exchange during 2019 and have started the preparation for this.”
The presentation also reveals a three-year contract for one of its ships with multinational conglomerate. It said the deal was at a premium to the Baltic 5TC Index and illustrated the value of the newcastlemax vessel and its scrubber.
“The counterparty in the initial time charter has expressed interest to expand this deal to multiple vessels,” 2020 Bulkers said.
The company has also had several enquiries from high quality charterers interested in securing newbuildings. Long-term time charters with fixed and floating rates and contracts of affreightment were all discussed.
“The favorable fuel consumption characteristics of the vessels, as well as the fact that all the newbuildings will be delivered with scrubbers seems to be a significant driver behind the charterers’ interest,” the update said.
“The group will continue to charter the vessels to strong counterparties with a target to optimise the trading results from their operation without building a large overhead structure.”
People in position
The company has appointed Olav Eikrem as chief technical director. He had the same job for John Fredriksen’s Frontline for 15 years.
Further familiar faces from the Fredriksen system have also been named on the new 2020 Bulkers board, with Kate Blankenship and Georgina Sousa both appointed directors from January.
At the same time, Halvorsen, previously executive chairman of 2020 Bulkers, has become chief executive. He is a former high-flyer from Clarksons Platou Securities and well respected in the capital markets.
He will work alongside chief financial officer Vidar Hasund, who holds the same post at Borr Drilling.
2020 Bulkers said it would target high yield dividend payments, had an opportunistic approach to growth and M&A and a disciplined investment strategy.
However, it stressed there were no current plans to continue to build the fleet as vessel prices has risen by 20% since its own ships were contracted.
Turning to the dry bulk freight market, the company said this year and next will see fleet growth of between 0 and 1% given the downtime required to install scrubbers on trading ships.
“As the historical growth in ton mile trade for iron ore has been around 4.5% per annum over the last 20 years, the supply/demand situation looks interesting,” 2020 Bulkers concluded.