Navigator Gas
Navigator Holdings Ltd
Investor presentation
USD 100 - 125 million senior unsecured bond issue
1
28 November 2012
WORLD WIDE WEB
DISCLAIMER
Sub headline
This Presentation, together with its enclosures and appendices (collectively, the “Presentation"), has been produced by Navigator Holdings Ltd (“Navigator”, “Navigator
Gas” or the “Company”), solely for use in connection with the contemplated offerings of bonds (“Bonds”) by the Company expected to be initiated in November 2012 (the
“Transaction”). This Presentation and its contents are strictly confidential and may not be reproduced, or redistributed in whole or in part, to any other person. The
managers for the Transaction are Fearnley Securities AS (“Fearnley”), Nordea Bank Norge ASA, Nordea Markets (“Nordea”), Pareto Securities AS (“Pareto”) and
Skandinaviska Enskilda Banken AB (publ) (“SEB”) (the “Joint Lead Managers”), in addition to DVB Bank (“DVB”) as co-manager (the “Co-Manager”) (the Joint Lead
Managers and the Co-manager are collectively referred to as the “Managers”). This Presentation is for information purposes only and does not in itself constitute an
offer to sell or a solicitation of an offer to buy any of the securities described herein. By attending a meeting where this Presentation is made, or by reading the
Presentation slides, you agree to be bound by the following terms, conditions and limitations. Unless indicated otherwise, the source of information included in this
Presentation is the Company.
The information contained in this Presentation has not been independently verified. No representation or warranty (express or implied) is made as to the accuracy or
completeness of any information contained herein, and it should not be relied upon as such. The Company does not intend, and does not assume any obligation to
update the Presentation. None of the Company or the Managers or any of their respective parent or subsidiary undertakings or affiliates or any such person’s directors,
officers, employees, advisors or representatives (collectively the “Representatives”) shall have any liability whatsoever arising directly or indirectly from the use of this
Presentation. An investment in the Bonds involves a high level of risk and several factors could cause the actual results or performance of the Company to be different
from what may be expressed or implied by statements contained in this Presentation. Please refer to slides 4 - 6 and the offering memorandum to be prepared in
relation to the Transaction (the “Offering Memorandum”) for a description of certain risk factors associated with the Company. By attending a meeting where this
Presentation is made, or by reading the Presentation slides, you acknowledge that you will be solely responsible for your own assessment of the market and the market
position of the Company and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of the
Company, its business and its shares and other securities. The content of this Presentation is not to be construed as legal, business, investment or tax advice. Each
recipient should consult with its own legal, business, investment and tax advisers to legal, business, investment and tax advice.
Neither this Presentation nor any copy of it nor the information contained herein is being issued, and nor may this Presentation nor any copy of it nor the information
contained herein be distributed directly or indirectly to or into Canada, Australia, Hong Kong or Japan, or any other jurisdiction in which such distribution would be
unlawful. Neither the Company nor the Managers, nor any of their Representatives, have taken any actions to allow the distribution of this Presentation in any
jurisdiction where action would be required for such purposes. The distribution of this Presentation and any purchase of or application/subscription for shares or other
securities of the Company may be restricted by law in certain jurisdictions, and persons into whose possession this Presentation comes should inform themselves
about, and observe, any such restriction. Any failure to comply with such restrictions may constitute a violation of the laws of any such jurisdiction. None of the Company
or the Managers or any of their Representatives shall have any liability (in negligence or otherwise) for any loss howsoever arising from any use of this Presentation or
its contents or otherwise arising in connection with the Presentation.
Neither the Company nor the Managers have authorized any offer to the public of securities, or has undertaken or plans to undertake any action to make an offer of
securities to the public requiring the publication of an offering prospectus, in any member state of the European Economic Area which has implemented the EU
Prospectus Directive 2003/71/EC.
Nordea is not registered with the U.S. Securities and Exchange Commission as a U.S. registered broker-dealer and will not participate in any offer or sale of securities
within the United States.
2
WORLD WIDE WEB
DISCLAIMER
Sub headline
In the event that this Presentation is distributed in the United Kingdom, it shall be directed only at persons who are either "investment professionals" for the purposes of
Article 19(5) of the UK Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or high net worth companies and other persons to whom
it may lawfully be communicated in accordance with Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “Relevant Persons”). Any person
who is not a Relevant Person must not act or rely on this Presentation or any of its contents. Any investment or investment activity to which this Presentation relates will
be available only to Relevant Persons and will be engaged in only with Relevant Persons. This Presentation is not a prospectus for the purposes of Section 85(1) of the
UK Financial Services and Markets Act 2000, as amended (“FSMA”). Accordingly, this Presentation has not been approved as a prospectus by the UK Financial
Services Authority (“FSA”) under Section 87A of FSMA and has not been filed with the FSA pursuant to the UK Prospectus Rules nor has it been approved by a person
authorised under FSMA.
This Presentation does not constitute, and should not be construed as, an offer to sell or the solicitation of an offer to participate in, or buy, any securities of the
Company in the United States, including the Bonds. The Bonds have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the
“Securities Act”), or with any securities regulatory authority of any state or other jurisdiction in the United States, and may not be offered or sold within the United States,
absent registration or under an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. In the United States, the Bonds will
be offered only to qualified institutional buyers (“QIBs”) within the meaning of, and as defined in, Rule 144A under the Securities Act. Outside the United States, the
Bonds will be offered in accordance with Regulation S under the Securities Act to non-U.S. persons (as defined in, and within the meaning of, Regulation S under the
Securities Act). By attending this Presentation or receiving this document, you warrant and represent that (i) if you are located within the United States or are a U.S.
person, you are a QIB, (ii) if you are a non-U.S. person, you are a qualified investor, or a Relevant Person (as defined above).
This Presentation may contain certain forward-looking statements relating to the business, financial performance and results of the Company and the industry in which it
operates. Forward-looking statements concern future circumstances and results and other statements that are not historical facts, sometimes identified by the words
“believes”, “expects”, “predicts”, “intends”, “projects”, “plans”, “estimates”, “aims”, “foresees”, “anticipates”, “targets”, and similar expressions. Any forward-looking
statements contained in this Presentation, including assumptions, opinions and views of the Company or cited from third party sources are solely opinions and forecasts
and are subject to risks, uncertainties and other factors that may cause actual events to differ materially from any anticipated development. None of the Company or the
Managers or any of their respective Representatives provides any assurance that the assumptions underlying such forward-looking statements are free from errors nor
do any of them accept any responsibility for the future accuracy of the opinions expressed in this Presentation or the actual occurrence of the forecasted developments.
The Company assumes no obligation, except as required by law, to update any forward-looking statements or to conform these forward-looking statements to our actual
results.
This Presentation is dated 28 November 2012. Neither the delivery of this Presentation nor any further discussions of the Company or the Managers with any of the
recipients shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since the date of this Presentation. The
Company does not undertake any obligation to review or confirm, or to release publicly or otherwise to investors or any other person, any revisions to the information
contained in this Presentation to correct inaccuracies or to reflect events that occur or circumstances that arise after the date of this Presentation.
The Managers and/or their employees may hold shares, options or other securities of the Company and may, as principal or agent, buy or sell such securities. The
Managers may have other financial interests in transactions involving these securities. DVB, Nordea and SEB are, in their capacity as banks, lenders to the company.
This Presentation is subject to Norwegian law, and any dispute arising in respect of this Presentation is subject to the exclusive jurisdiction of Norwegian courts.
3
RISK FACTORS
A number of risk factors may adversely affect the Company and its subsidiaries (collectively the “Group”). The risks
listed below are not the only ones facing the Group. Additional risks not presently known to the Group or that the
Group currently deems immaterial may also adversely affect the Group. If any of the risks facing the Group should
actually occur, the Group’s business, financial position and operating results, the trading value of the Company’s
shares, and the transactions described herein, could be materially and adversely affected. Further description of
certain risk factors facing the Group are included in its annual report and financial statements and the Offering
Memorandum. Prospective investors should carefully consider the risks related to the Group, and should consult his
or her own expert advisors as to the suitability of an investment in securities of the Company. An investment in
securities of the Company entails significant risks and is suitable only for investors who understand the
risk factors associated with this type of investment and who can afford a loss of all or part of the
investment.
Risks related to the Group and its business include:
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Charter rates for LPG carriers are cyclical in nature, and future charter rates will depend on continued demand for
seaborne transportation of LPG and the LPG carrier fleet’s capacity growth.
The global financial crisis could materially adversely affect the Group’s business, financial position and results of
operations, as well as the Group’s future prospects.
If the demand for LPG products and LPG shipping does not grow, or decreases, the Group’s business, results of
operations and financial condition could be adversely affected.
The expected growth in the supply of petrochemical gases, including ethylene, available for seaborne transport may not
materialize, which would deprive the Group of the opportunity to obtain premium charters for petrochemical cargoes.
The market values of the Group‘s vessels may fluctuate in the future. This could require the Group Companies to repay
amounts borrowed under the Group’s facility agreements, reduce its borrowing availability or cause the Group to incur a
loss, any of which could adversely affect its business, financial condition and operating results.
4
RISK FACTORS
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Worldwide operations expose the Group to political, governmental and economic instability, which could adversely affect
its business, financial condition and operating results.
A shortage of qualified officers would make it more difficult to crew the Group’s vessels and would increase the Group’s
operating costs. Such shortage may further impair the Group's ability to operate and could have an adverse effect on the
Group's business, financial condition and operating results.
The Group depends to a significant degree upon third-party managers and their ability to provide technical management
services for its fleet.
Ship owners and operators, such as the Group, are exposed to operating costs (such as bunker fuel prices, insurance
premiums and crew costs) and operational requirements (such as compliance with environmental, safety, national and
classification requirements), the effect of which could adversely affect the Group’s business, financial condition and
operating results.
The Group’s engagement in the pure LPG market exposes it to adverse developments in the seaborne gas transportation
business, which would adversely affect the Group’s business, financial condition and operating results.
Maritime claimants could arrest the Group’s vessels, which could interrupt its cash flow.
The Group may experience operational problems with vessels that reduce revenue and increase costs.
The Group’s fleet includes sets of sister ships, which have identical specifications. As a result, any latent design or
equipment defect discovered in one of the Group’s sister ships will likely affect all the other vessels.
Delays in deliveries or defects regarding the newbuildings or the acquired second hand vessels could adversely affect the
Group’s growth ambitions.
The Group may be unable to make, or realize the expected benefits from, acquisitions of existing vessels, The A.P.
Møller-Mærsk vessels or newbuildings, and the failure to successfully implement its growth strategy through acquisitions
could adversely affect the Group’s business, financial condition and operating results.
The Group’s growth depends on its ability to expand relationships with existing customers and obtain new customers, for
which the Group will face substantial competition.
Marine transportation is inherently risky. An incident involving significant loss of product or environmental contamination
by any of the Group’s vessels could adversely affect its reputation, business, financial condition and operating results.
5
RISK FACTORS
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The Group‘s operating results are subject to seasonal fluctuations in the LPG market.
Acts of piracy on ocean-going vessels have recently increased in frequency, which could adversely affect the Group’s
business.
Exchange rate fluctuations could adversely affect the Group’s revenues, financial condition and operating results.
Restrictive covenants in the bank financing agreements and the Bond impose, and any future debt facilities will impose,
financial and other restrictions on the Group.
The Group’s business depends upon certain key employees who may not necessarily continue to work for the Group.
The Company is incorporated in the Republic of The Marshall Islands, which does not have a well-developed body of
corporate law.
Risks related to the Bonds may include:
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Following the issuance of Bonds contemplated in this Presentation, the Group will have substantial indebtedness which
could have negative consequences for the bondholders.
There may be no public market for the Bonds.
Despite the Group Companies’ current levels of indebtedness, Group Companies may incur substantially more debt,
which could further exacerbate the risks associated with its substantial indebtedness.
The Company’s access to cash flow may be limited as it is dependent on cash flow from other Group Companies.
The Company has guaranteed for the indebtedness of other Group Companies.
The terms and conditions of the Bond Agreement will allow for modification of the Bonds or waivers or authorizations of
breaches and substitution of the Issuer which, in certain circumstances, may be affected without the consent of
bondholders.
6
WORLD WIDE WEB
AGENDA
Sub headline
1.
The contemplated bond issue
2.
Company overview
3.
A primer on the LPG market
4.
Financials
5.
Appendix
7
KEY CREDIT HIGHLIGHTS:
THE MARKET LEADER IN HANDY-SIZE GAS CARRIERS
1
Market leader in handysize gas carriers
2
Strong track record of
prudence and stability
3
Solid market
fundamentals
4
Backed by experienced
management and
committed stakeholders
■ A fleet of 23 vessels and 4 newbuilds following the acquisition from Maersk Tankers, corresponding to a market
share of 28% in the 15,000 - 24,999 cubic metres ("handy-size") gas carrier segment
■ Modern fleet with an average age of 5.6 years, with a highly versatile vessel mix able to serve all customer needs
and capturing advantages from accessing three different cargo sources: LPG, petrochemicals and Ammonia
■ Average utilization of ~98% over the last seven years and strong chartering performance, consistently delivering
solid financial results, despite the recent trough in the market
■ Conservative and rapidly amortizing bank financing combined with an EBITDA backlog of more than USD 200m
provides strong support for senior unsecured bonds
■ Strong growth in three fundamental global industries provides sound market outlook for the demand for gas
transportation services, with US shale gas production expected to provide a substantial upside in cargo volumes
■ High fleet development visibility: Limited orderbook and significant recycling potential
■ Management team with long industry experience and proven track record
■ Strong shareholder base with main shareholder WL Ross & Co (and affiliates) holding 55.7% prior to providing
USD 75m in equity to finance the growth of the Company
■ Committed core group of supporting banks providing existing and committed bank financing
5
Attractive structure for a
senior unsecured bond
■ Strong financial covenant package and dividends restricted until 2014
■ No increase of existing senior debt allowed under the terms and no deterioration of amortization profile
8
KEY TERMS
Issuer
Amount
Use of proceeds
Status
Coupon
Issue price
Final maturity date
Amortisation
Financial covenants
Dividends
General undertakings
Call options (American)
Settlement date
Listing
Trustee
Governing law
Managers
Navigator Holdings Ltd.
USD 100 - 125 million
The net proceeds from the Bonds shall be used (i) to partly finance the acquisition of 11 handy-size vessels from
Maersk Tankers, (ii) to finance the Group’s fleet expansion, and (iii) for the Group’s general corporate purposes
Senior Unsecured
[•]% p.a., semi-annual interest payments
100% of par value
18 December 2017 (5 years after the Settlement date)
In full at Final Maturity Date at 100% of par value (plus accrued interests on redeemed amount)
• Liquidity: minimum the higher of: i) USD 12.5 million and ii) 5% of Total Interest Bearing Debt
• Equity Ratio: minimum 30%
• Interest Coverage Ratio: not less than 3.0x
• Asset Coverage ratio: minimum 120% (from and including 30 June 2013)
• Working Capital: maintain a positive Working Capital
No dividends until after 31 December 2013. Thereafter, no dividends exceeding 50% of consolidated net profit after
taxed based on the previous financial year (subject to Equity Ratio of minimum 35%)
Mergers/de-mergers restrictions, continuation of business provisions, disposal of assets restrictions, reporting
requirements, arm’s length provisions, negative pledge, financial indebtedness restrictions (no increase of existing
senior debt, no deterioration of amortization profile), financial support restrictions, subordination of shareholder loans
and other subordinated loans, insurance provisions, etc.
Non-call 36 months, call after 36 months @ 104, call after 48 months @ 102, call after 54 months @ 101
Expected to be on or about 18 December 2012
An application will be made for the Bonds to be listed on Oslo ABM, Oslo Stock Exchange or another generally
recognized market place
Norsk Tillitsmann ASA
Norwegian law
Joint Lead Managers: Fearnley Securities AS, Nordea Markets, Pareto Securities and SEB
Co-Manager: DVB
Note: Please refer to the Term Sheet for further details about the Bond Issue.
9
LEGAL STRUCTURE FOLLOWING ACQUISITION
Issuer: USD 100 - 125m bond
Navigator Holdings Ltd
Navigator Gas US, LLC
(United States of America)
Navigator Gas LLC
NGT Services (UK) Limited
(England)
Navigator Gas Invest Limited
(England)
Falcon Funding Pte Ltd
(Singapore)
49% of shares
99% of cash flow (appx.)
PT Navigator Khatulistiwa
(Indonesia)
Current fleet
Acquired vessels
Navigator Mars LLC
Navigator Gemini LLC
Navigator NB1 LLC
Navigator Glory LLC
Navigator Capricorn
LLC
Navigator Neptune LLC
Navigator Taurus LLC
Navigator NB2 LLC
Navigator Grace LLC
Navigator Scorpio LLC
Navigator Phoenix LLC
Navigator Leo LLC
Navigator NB3 LLC
Navigator Gusto LLC
Navigator Virgo LLC
Navigator Galaxy LLC
Navigator Humber LLC
Navigator Venus LLC
Navigator Libra LLC
Navigator NB4 LLC
Navigator Genesis LLC
Navigator Caribe LLC
Navigator Pegasus LLC
Navigator Saturn LLC
Debt3: USD 145m
Maturity: April 2017
Debt3: USD 75m
Maturity: April 2017
Navigator Aries
Navigator Pluto
No leverage
Total secured debt3: USD 220m
Broker valuation: USD 509m
Loan-to-Value: 43%
1)
2)
3)
Newbuilds to be
delivered in 2014
Committed bank
financing of USD
120m
Navigator Global LLC
Total secured debt: USD 270m
Broker valuation: USD 450m
Loan-to-Value: 60%
All companies are registered in the Republic of the Marshall Islands unless noted otherwise in parenthesis
All lines denote 100% ownership, unless percentage shown
Secured debt as of 30/09/2012. In order to finance the 10% prepayment for the acquisition an additional USD 30m have been drawn on the facility with USD 144.7m outstanding as
of 30/09/2012. An additional USD 5.3m will be amortised on the facility over the course of Q4-2012, implying USD 169.4m outstanding on this facility per Q4-2012
10
AGENDA
1.
The contemplated bond issue
2.
Company overview
3.
A primer on the LPG market
4.
Financials
5.
Appendix
11
NAVIGATOR: THE WORLD LEADER IN HANDY-SIZE
LIQUEFIED PETROLEUM GAS (“LPG”) CARRIERS
Navigator at a glance
The Navigator handy-size LPG carrier fleet
The world’s largest operator of handy-size LPG vessels
■
Owns and operates a current fleet of 12 modern 20,500-22,000
cubic meter ("cbm") semi-refrigerated gas carriers, five of which
are the world’s largest ethylene capable vessels
■
The acquisition of 11 vessels from Maersk Tankers, five of which
are semi-refrigerated, makes Navigator the world leader in
handy-size LPG
■
Additionally, four ethylene capable newbuildings of 21,000 cbm
will be delivered over the course of 2014
Semi-refrigerated
Ethylene capable
semi-refrigerated
Fully-refrigerated
12 vessels
5 vessels + 4 NBs
6 vessels
Modern and versatile pure-play fleet
■
The vessels are amongst the most modern and versatile gas
carriers globally in terms of flexibility and accessibility to all
cargoes; LPG, petrochemical gases and ammonia
Headquartered in London with representative office in New York
Owned
Navigator Neptune
Owned newbuild
Acquired
Navigator Taurus
12
OVERVIEW OF THE RECENTLY ANNOUNCED
ACQUISITION FROM MAERSK TANKERS
Transaction
■
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Sources and uses (USDm)
Navigator has made an agreement to acquire the entire
Maersk Tanker fleet of 11 handy-size gas carriers,
comprising five semi-refrigerated vessels and six newly
built fully-refrigerated vessels
Sources
The transaction facilitates sound consolidation in the
handy-size segment and enhances Navigator’s
serviceability to all gas charterers across the complete
spectrum of LPG, petrochemical and ammonia trades
Undrawn facilities
30
Senior unsecured
bond
100 - 125
■
The vessels will be delivered to Navigator on a charterfree basis, and as such the vessels will be delivered on a
staggered basis following expiry of their current charters
■
According to the agreement
■
delivery of the vessels will take place from 31
January 2013, and
■
if a vessel is not delivered by the later of (i) 31
December 2013 and (ii) 3 months after redelivery
of vessel under existing time charter, Navigator
can terminate the agreement for such vessel and
be refunded the 10% deposit for the vessel
Secured bank debt
270 Acquisition of vessels
New equity
75
Cash as of Q3-2012
37
Total sources
13
Uses
Surplus for general
corporate purposes
512 - 537 Total uses
470
42 - 67
512 - 537
KEY EVENTS IN NAVIGATOR’S HISTORY
1997
January, 2003
2007/2008
November, 2011
Navigator Holdings formed as an Isle of
Man public limited company with the
purpose of building and operating a
fleet of five semi-refrigerated, ethylenecapable gas carriers.
Charter rates in the gas carrier industry
declined and anticipated growth in the
ethylene market did not develop. Due to
insufficient debt service the company
and its subsidiaries filed for Chapter 11.
Navigator Gas L.L.C. and its vessel-owning
subsidiaries re-domiciled from the Isle of Man to
the Marshall Islands in December 2007. On 28
March 2008, Navigator Holdings re-domiciled as a
corporation in the Marshall Islands.
W.L. Ross, the Company’s largest
shareholder, made his first
investment in Navigator. W.L. Ross
became the majority shareholder in
May 2012 with 55.7% of the shares
New owners
New mgt. team
"Old" Navigator (1997 - 2005)
"New" Navigator (2006 - current)
2000
March, 2004
August, 2006
November, 2012
The vessels were delivered in
2000 and financed primarily
through issuance of high yield
notes.
The Chapter 11 plan of reorganization,
proposed by the committee lead by
current CEO, Chairman and President
David Butters, was confirmed.
The plan of reorganization became
effective and Navigator Holdings
emerged from bankruptcy. As part of
the plan, bondholders received equity
interests in Navigator Holdings.
Navigator announces the acquisition
of the Maersk Tanker handy-size
LPG carrier fleet, becoming the world
leader in handy-size LPG.
Navigator today:
The Company has grown its fleet
from five to twelve vessels over the
last five years through acquisitions
and has placed an order for four
newbuilds
The recently announced acquisition
marks the beginning of a new
chapter in Navigator’s history, and is
a real step towards consolidation in
the industry
Net revenue (USDm)
EBITDA (USDm)
85
40
71
70
65
48
51
2006
2007
33
56
36
36
2007
2008
35
24
41
2005
46
45
2008
2009
14
2010
2011
9M
2012
2005
2006
2009
2010
2011
9M
2012
WIDE
WEB
AWORLD
HIGHLY
EXPERIENCED
MANAGEMENT TEAM
Sub headline
David Butters
Chairman, President and
Chief Executive Officer
Niall Nolan
Chief Financial Officer
Tommy Hjälmås
Chief Operating Officer
Øyvind Lindeman
Chartering manager
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Chairman of the Board since August 2006
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Former managing director at Lehman Brothers Inc, where he was employed for more than 37 years
■
Chairman of the board of directors of GulfMark Offshore, Inc., member of the board of directors of Weatherford
International Ltd., ACOL Tankers Ltd. and Angelicoussis Shipping Group Ltd.
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Mr. Butters holds a BA from Boston College and an MBA from Columbia University
■
Appointed Chief Financial Officer of Navigator Gas in August 2006
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Worked for Navigator Holdings as a representative of the creditors’ committee during Navigator Holdings’
bankruptcy proceedings
■
Prior to that, Mr. Nolan was group finance director of Simon Group PLC, a U.K. public company
■
Mr. Nolan is an FCCA from the University of Limerick
■
Appointed Chief Operating Officer of Navigator Gas in November 2006
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Employed for five years at Dorchester Maritime Ltd, part of the Bernhard Schulte Group, prior to joining
Navigator Gas
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Over 25 years of experience in the shipping industry
■
Mr. Hjälmås received his BSc in marine engineering from the University of Chalmers
■
Appointed Chartering Manager of Navigator Gas in November 2007
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Employed for five years at A.P. Moeller-Maersk prior to joining Navigator Gas
■
Mr. Lindeman holds a BA with honours from University of Strathclyde and an Executive MBA with distinction
from Cass Business School
15
BOARD OF DIRECTORS AND SHAREHOLDERS
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Chairman of the Board since August 2006
Former Managing Director at Lehman Brothers Inc, where he was employed for more than 37 years
Chairman of the board of directors of GulfMark Offshore, Inc., member of the board of directors of Weatherford
International Ltd., ACOL Tankers Ltd. and Angelicoussis Shipping Group Ltd.
Mr. Butters holds a BA from Boston College and an MBA from Columbia University
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Dr. Fischer has been a member of the board of directors of Navigator Holdings since December 2011
Chairman of the board of VTG AG since 2004
MBA from State University of New York in Albany and doctorate in economics from Julius Maximilians University
David Butters
6.7%
Spiros Milonas
5.3%
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Other shareholders
■
Mr. Kenwright has been a member of the board of directors of Navigator Holdings since March 2007
Mr. Kenwright is managing director of Achater Offshore Ltd., and Chairman of the UK Emergency Response and
Rescue Vessel Association Ltd., and was previously managing director of Gulf Offshore N.S. Ltd. for seven years,
He is a Chartered Engineer and a Fellow of the Institute of Marine Engineering, Science & Technology
Thomas A. McKay
Director
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Mr. McKay has been a member of the board of directors of Navigator Holdings since January 2010
Mr. McKay is the principal of T.A. McKay & Co., a New York investment management firm
He served three years as a lieutenant in the US Navy and received an MBA from Harvard and a BA from Princeton
Spiros Milonas
Director
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Mr. Milonas has been a member of the board of directors of Navigator Holdings since August 2006
Chairman and President of Ionian Management Inc. and director of the New York Shipping Committee
Mr. Milonas graduated from Athens University, School of Economics
Alexander Oetker
Director
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Mr. Oetker has been a member of the board of directors of Navigator Holdings since September 2006
Founder and prior CEO of AO Schiffahrt, a bulk and container shipping company
Experience as a chartering manager at Hutchinson Port Holdings
Wilbur L. Ross
Director
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Mr. Ross has been a member of the board of directors of Navigator Holdings since April 2012
CEO and Chairman of WL Ross & Co, formerly Executive Managing Director of Rothschild Inc. for 24 years
Mr. Ross holds a BA from Yale College and an MBA from Harvard Business School
Florian Weidinger
Director
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Mr. Weidinger has been a member of the board of directors of Navigator Holdings since March 2007
Experience from Lehman Brothers’ principal investment division, Global Trading Strategies in London
Mr. Weidinger received his BSc from Cass Business School, London
David Butters
Chairman, President
and CEO
Dr. Heiko Fischer
Director
David Kenwright
Director
16
Shareholders as of 01/11/2012
WL Ross & Co
55.7%
T. A. McKay & Co
11.2%
Total
21.1%
100.0%
USD 75m
equity issue
Pro forma ownership
following equity issue
WL Ross & Co
62.9%
T. A. McKay & Co
9.4%
David Butters
5.6%
Spiros Milonas
4.4%
Other shareholders
Total
17.7%
100.0%
WORLD WIDE WEB
AGENDA
Sub headline
1.
The contemplated bond issue
2.
Company overview
3.
A primer on the LPG market
4.
Financials
5.
Appendix
17
GAS
CARRIERS TRANSPORT THREE CARGO TYPES:
WORLD WIDE WEB
LPG,
PETROCHEMICALS AND AMMONIA
Sub headline
Source
Transported by LPG carriers
End application
Natural Gas (LNG)
production
Liquefied Petroleum Gases
A derivative from production
of other fuels and LNG, used
as an energy source
Energy
Crude oil production
Petrochemical Gases
Produced from saturated
hydrocarbons and widely
used in the chemical industry,
e.g. in producing polymers
Raw materials
Shale gas
Ammonia
Methane gas is used in
producing ammonia, which is
used e.g. in nitrogen-based
fertilizers
Fertilizers
18
STRONG GROWTH IN THREE FUNDAMENTAL
WORLD WIDE WEB
INDUSTRIES PROVIDES SOUND MARKET OUTLOOK
1
2
Liquefied Petroleum Gases
Energy
Volume 2011
Volume 2015e
Growth
% carried by vessels
< 23k cbm (2011)
73m tons
93m tons
28% / 20m tons
16.5%
■
LPG is a viable source of alternative
energy (cleaner and more efficient
compared to traditional carbon fuels)
■
Positive impact on shipping demand from
US becoming net exporter of gas due to
significant increase in shale gas production
3
Petrochemical Gases
Raw materials
Volume 2011
Volume 2015e
Growth
% carried by vessels
< 23k cbm (2011)
Ammonia
Fertilizers
16m tons
18m tons
9% / 2m tons
100.0%
■
The world needs raw materials for a vast
array of finished plastic based products
■
Petrochemicals are demand-driven and
closely linked to GDP
Source: ViaMar, Oct 2012
19
Volume 2011
Volume 2015e
Growth
% carried by vessels
< 23k cbm (2011)
16m tons
18m tons
13% / 2m tons
16.8%
■
The world needs fertilizers in parallel with
world population growth and farming
efficiencies
■
Population growth and developments in
the agriculture industry have positive
effects on the demand for ammonia
DEVELOPMENT OF US SHALE GAS
WORLD WIDE WEB
WILL BE A GAME CHANGER FOR LPG
Unconventional gas flooding the US market
■
■
8,000
Production of US shale gas has increased five-fold over
the last five years, and is set to continue growing
2012
7,000
6,000
US incremental LPGs and NGLs derived from shale
production is expected to pave the way for increased
demand for incremental seaborne transportation driven by
excess volumes and competitive gas prices
mmboe
■
US shale oil and gas production
5,000
4,000
3,000
2,000
1,000
0
ViaMar estimates that US LPG exports may increase from
approximately 3 million tonnes per year in 2011 to
approximately 10 million tonnes per year in 2015
Gas excluding shale gas
Conventional Oil
Shale gas
Tight oil
US vs Saudi Arabian propane prices1
3.0
60%
Natural Gas
2.5
USD / gallon
Shale gas
40%
Ethane
42%
Gasoline
14%
Natural Gas Liquids
(Y-grade)
LPG
44%
2.0
Price gap
expected to
drive US
exports
1.5
1.0
0.5
Transported by LPG carriers - ethane can only be
carried by semi-refrigerated ethylene capable vessels
Source: EIA, Bloomberg, ViaMar Oct 2012, FactSet
1) A conversion of 11.6 barrels of propane per metric tonne is used
20
0.0
Dec-07
Dec-08
Dec-09
Dec-10
North American Spot, Mont Belvieu TX
Dec-11
Saudi CP
WORLD WIDE
THERE
AREWEB
THREE MAIN CLASSES OF LPG VESSELS
Sub headline
Capabilities to handle gases in
their liquid state 1)
Vessel types
Fully-refrigerated
Semi-refrigerated
Prismatic tanks
Cylindrical Bi Lobe
Steel thickness = 10 mm
Steel thickness = 20 mm
Max pressure = 0.2 bar
Max pressure = 5-7 bar
Typical size = 15,000-80,000 cbm Typical size = 5,000-23,000 cbm
Can load cooled cargo
Cannot load pressurised
1)
Can load both cooled
and pressurised cargo
Temperature only
Can cool
Temperature &
Pressure
Can cool and/or
sustain pressure up
to 7 bar
Pressure only
No cooling. Can
sustain pressure up
to 18 bar.
■
Cargo temperatures and
pressures vary from terminal to
terminal subject to different
infrastructure constraints and
needs
■
A semi-refrigerated vessel can
both cool and sustain pressure,
enabling these vessels to access
all cargo types with all cargo
temperatures
Pressurised
Cylindrical Bottle
Steel thickness = 32 mm
Max pressure = 18 bar
Typical size = 500-11,500 cbm
Cannot load cooled cargo
Can load pressurised
A gas meets its boilingpoint, or liquid state, through application of temperature and / or pressure
21
NAVIGATOR BENEFITS FROM
WORLD WIDE WEB
ACCESSING
ALL THREE GAS MARKETS
Sub headline
Overview of gas carrier vessel segments
Vessel Type
Carry LPG
Carry Petrochemicals
Carry
Ammonia
>60,000 cbm
Very Large Gas Carrier
Fully-Refrigerated

40–59,999 cbm
Large Gas Carrier
Fully-Refrigerated


25–39,999 cbm
Medium Gas Carrier
Fully-Refrigerated


15–24,999 cbm
Handy Gas Carrier
Semi-Refrigerated
Fully-Refrigerated


5–14,999 cbm
Small Gas Carrier
Semi-Refrigerated
Pressurized


<4,999 cbm
Small Gas Carrier
Pressurized

22

LARGER FULLY REFRIGERATED VESSELS DO NOT
COMPETE IN NAVIGATOR'S KEY SEGMENTS
Detailed overview of Navigator's position in various segments
Fully-refrigerated
Property
LPG / petrochemical
cargoes
Ethane & ethylene
Other petrochemical
cargoes
>60k
VLGC
40-60k
LGC
25-40k
MGC
Semi-refrigerated
15-25k
15-25k
Handy-size Handy-size
< -100˚C
boiling point
Technically incapable due to
lack of pressure capacity
At ambient
temperature
Practically incapable due to
extremely slow filling rate
Propylene, VCM, butadiene
At boiling point
Not commercially viable today due to
lack of large individual cargoes
At ambient
temperature
5-15k
Small GC
Ethylene capability
required
Long haul
Long haul
Practically incapable due to
extremely slow loading rate
Long haul
Other LPG cargoes
Propane, butane & other
At boiling point
Fertiliser / ammonia
Long haul
Technically
incapable
Short haul
Long haul
Pressurized
5-15k
Small GC
Technically incapable
due to minimum -10C
temperature
Navigator position
 Navigator is the leading player in
an emerging, high growth niche
Short haul
 Navigator semi-refs provide the
most scale efficient solution
Short haul
 Navigator fleet provides the
most scale efficient solution
Short haul
 Navigator semi-refs provide the
most scale efficient solution
Technically incapable
due to minimum -10C
temperature
Short haul
23
<5k
Small GC
 Navigator is leading in the
mid haul niche
Not comp Navigator is leading in the
etitive due
mid haul niche
to scale
LIMITED LPG TONNAGE ON ORDER, WITH
WORLD WIDE WEB
NAVIGATOR
CONTROLLING GROWTH IN HANDY-SIZE
Sub headline
Overview of gas carrier fleet
Orderbook
Vessel Type
Existing fleet
Avg. age
Vessels
on order
% of fleet
(# vessels)
>60,000 cbm
Very Large Gas Carrier
Fully-Refrigerated
144
10
20
14%
40–59,999 cbm
Large Gas Carrier
Fully-Refrigerated
19
11
-
0%
25–39,999 cbm
Medium Gas Carrier
Fully-Refrigerated
59
10
10
17%
15–24,999 cbm
Handy Gas Carrier
Semi-Refrigerated
Fully-Refrigerated
90
11
10
11%
5–14,999 cbm
Small Gas Carrier
Semi-Refrigerated
Pressurized
264
11
46
17%
<4,999 cbm
Small Gas Carrier
Pressurized
667
20
2
0%
■
Limited handy-size orderbook of 10 units to be delivered by 2015
■
Navigator owns 4 of the newbuilds and the 2 Sovcomflots’ newbuilds will enter a 10 year contract for Sibur
Source: Clarkson’s Research as of 12/11/2012, Navigator Gas
24
WORLD
WIDE WEB
THE
MARKET
LEADER IN HANDY-SIZE LPG
Sub headline
Overview of top players
Owner
1
Fleet1
No
cbm
Orderbook
No
cbm
Total
No
cbm
Avg.
age2
Navigator (post-deal)
23
496,255
4
84,000
27
580,255
5.6
Navigator (pre-deal)
12
257,925
4
84,000
16
341,925
6.7
APM (pre-deal)
11
238,330
0
0
11
238,330
4.4
Market share (cbm)
excl. orderbook
14%
27%
13%
2
Naftomar
8
161,500
0
0
8
161,500
6.5
3
Ultragas
7
122,296
4
88,000
11
210,296
17.0
4
Harpain
5
90,000
0
0
5
90,000
24.4
5
Solvang
5
83,000
0
0
5
83,000
3.6
6
Schulte
4
74,000
0
0
4
74,000
27.8
7
Varun
3
72,104
0
0
3
72,104
2.3
8
PCL
3
65,452
0
0
3
65,452
5.2
9
Petredec
3
61,664
0
0
3
61,664
5.5
Others
29
599,910
2
41,000
31
640,910
12.2
Grand Total
90
1,826,181
10
213,000
100
2,039,181
12.3
Market share (cbm)
incl. orderbook
17%
28%
12%
Source: Clarkson’s Research, Navigator Gas
■
Navigator will be the market leader in the handy-size segment following the acquisition
■
The acquisition of the six fully-refrigerated handy-size vessels will make Navigator the largest owner in this sub-segment, improving Navigator’s
service offering to customers who do not necessarily need or want to pay the premium for semi-refrigerated or ethylene capabilities
■
Most vessels in the segment trade on time charter (“TC”) contracts or within captive trades, leaving a small minority of the vessels to compete on
the spot market
1)
2)
World fleet of vessels within the 15-25,000cbm size range, i.e. including semi-refrigerated, ethylene and fully-refrigerated vessels
Excluding newbuilds
25
NAVIGATOR
WILL HAVE THE WORLD’S
WORLD WIDE WEB
LARGEST
HANDY-SIZE LPG FLEET
Sub headline
Navigator owned vessels1
Vessel
Ownership
Built
Size (cbm)
22,085
Semi-ref / Ethylene
Maersk Humber
100%
1998
20,928
Semi-ref
2000
22,085
Semi-ref / Ethylene
Caribe
100%
2000
20,902
Semi-ref
100%
2000
22,085
Semi-ref / Ethylene
Maersk Heritage
100%
2009
20,500
Semi-ref
Navigator Venus
100%
2000
22,085
Semi-ref / Ethylene
Maersk Harmony
100%
2008
20,500
Semi-ref
Navigator Mars
100%
2000
22,085
Semi-ref / Ethylene
Maersk Honour
100%
2009
20,500
Semi-ref
Navigator Libra
100%
2012
20,500
Semi-ref
Maersk Glory
100%
2010
22,500
Fully-ref
Maersk Grace
100%
2010
22,500
Fully-ref
Navigator Leo
100%
2011
20,500
Semi-ref
Maersk Gusto
100%
2011
22,500
Fully-ref
Navigator Taurus
100%
2009
20,500
Semi-ref
Maersk Genesis
100%
2011
22,500
Fully-ref
Navigator Pegasus
100%
2009
22,500
Semi-ref
Maersk Galaxy
100%
2011
22,500
Fully-ref
Navigator Phoenix
100%
2009
22,500
Semi-ref
Maersk Global
100%
2011
22,500
Fully-ref
Navigator Gemini
100%
2009
20,500
Semi-ref
Navigator Aries2
49%
2008
20,500
Semi-ref
Hull 2530
100%
2014
21,000
Semi-ref / Ethylene
Current fleet
Newbuilds
Ownership
Built
Size (cbm)
Navigator Neptune
100%
2000
Navigator Pluto2
49%
Navigator Saturn
Hull 2531
Hull 2532
100%
2014
2014
21,000
21,000
100%
2014
21,000
Type
Summary fleet statistics (ex. chartered vessels)
Number of vessels
Semi-ref / Ethylene
Semi-ref / Ethylene
Newbuilds
Total
23
4
27
6
Semi-ref
17
4
21
5
4
9
5.6
n.a.
496,255
84,000
Whereof ethylene capable
Semi-ref / Ethylene
Current fleet
Fully-ref
Average age
Hull 2533
2)
100%
Current fleet
Type
Vessel
1)
Acquired vessels
Cbm
6
Navigator also has two chartered-in vessels. Arctic Gas, which is to be redelivered to the owner in January 2013, and Maple 3, which is to be redelivered to the owner in
December 2014
49% of shares, 99% of cash flow (appx.)
26
580,255
LIMITED MARKET IMPACT FROM ORDERBOOK
COMBINED WITH HIGH RECYCLING POTENTIAL
Handy-size 15 - 25,000 cbm fleet age profile
12
Recycling potential
>20 years
21 vessels
■
Total 9 units older than 25
years will be phased out
over the next medium term
«Non-controlled»
4 NBs
■
Total 21 units in excess of 20
years further underlines
recycling potential
Captive trades
2 NBs
Newbuilding opportunities
10
8
Number of vessels
>25 years
9 vessels
6
4
■
There is a limited number of
shipyards that build handysize gas carriers
■
Construction lead time for a
newbuild is approximately 24
months
■
The earliest any new orders
can come to the market is in
2015
Navigator
4 NBs
2
0
-2
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
-4
Fleet
Order
Scrap
Source: Navigator Gas
27
NAVIGATOR TRADE PATTERNS ARE TRULY GLOBAL,
FOCUSED ON KEY GROWTH REGIONS
Navigator operations
Navigator key markets
Handy-size gas vessels
■
Navigator is a pure-play handy-size gas carrier
company with a balanced mix of ethylene-capable,
semi-refrigerated and fully-refrigerated vessels
■
The only gas carrier class that can practically carry all
three LPG cargoes: LPG, petrochemicals and
ammonia
■
Navigator’s vessels are of the largest vessel class
capable of petrochemical and ethylene trades
Trading patterns
■
■
■
Navigator's vessels operate on a regional basis within
the LPG and ammonia trades due to flexible size with
access to most ports and infrastructure
Regional split of operations
(2011 - gross revenue)
When carrying petrochemicals the vessels operate on
a transcontinental basis, providing economies of
scale freight economics to its customers
Navigator has an increasing US/Caribbean presence,
directly associated with the recent increase in exports
from US GoM as a consequence of shale gas
development
6%
Cargo types carried
(2012 year to date - volume)
7% 2%
US Caribbean
LPG
10%
LPG requiring
semi-refrigerated
SE Asia
41%
17%
22%
NE Asia
WC Africa
26%
28
Europe
Petrochemicals
69%
Ethylene
HANDY-SIZE
LPG:
WORLD WIDE WEB
STABLE
Sub headline AND ATTRACTIVE RETURNS
TC rates last 5 years (USD ‘000 / month)2
LPG carriers - 12 month TC rate assessment1
1,400
0
250
500
USD ‘000 / calendar month
1,300
750
682
78,000 cbm
1,200
1,000
1,250
870
435
1,080
1,100
756 895
1,000
59,000 cbm
525
1,100
900
710 775
800
35,000 cbm
700
550
965
600
759 910
500
22,000 cbm SR
400
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
78,000 cbm
59,000cbm
35,000cbm
22,000cbm fully-ref
15,000cbm
Navigator
Dec-10
575
950
Dec-11
22,000cbm semi-ref
711 775
22,000 cbm FR
625
780
582 650
■
Clarkson’s Research provides historical market rates for a 12 month TC
contract on a weekly basis for different types of LPG carriers
■
The time series for Navigator shows the average rate earned by the
Company’s entire fleet at the time, including charters made in the past
■
Any new charter or charter extension recently made by Navigator has been
made at rates in excess of USD 900,000 per calendar month
445
15,000 cbm
725
811 818
677
Navigator
Average rate
Current rate
995
Low
High
Source: Clarkson’s Research as of 12/11/2012, Navigator Gas
1)
2)
The 22,000 cbm semi-refrigerated benchmark emerged from the 15,000 cbm benchmark during November 2007 to more accurately reflect the market sentiment differential between the
two size classes
Time series for 22,000 cbm fully-refrigerated vessels only reported since December 2011, and hence does not capture trough period from 2009 - 2011
29
STRONG CUSTOMER RELATIONSHIPS
WORLD WIDE WEB
REFLECTED
IN CHARTERING PERFORMANCE
Sub headline
Existing owned fleet contract status and track record1/2
Client track record
Vessel
Present
Contract track record and current contracts
Navigator Pluto
Mar-15
Navigator Mars
Dec-13
Navigator Neptune
Jan-13
Navigator Saturn
Dec-12
Navigator Venus
Mar-13
Navigator Gemini
Sep-13
Navigator Leo
10 years
Dec-12
Navigator Libra
10 years
Oct-13
Navigator will provide a substitute vessel
when Libra commences SIBUR contract
Navigator Aries
Mar-14
Navigator Phoenix
May-13
Track
record
Feb-13
CoA
Dec-06
1)
2)
Sep-13
Navigator Taurus
Navigator Pegasus
■
Current contract expiry
Dec-07
Dec-08
Dec-09
Dec-10
Dec-11
Dec-12
Dec-13
Dec-14
Dec-15
Timecharters are normally contracted on a basis 12 month duration within the segment, but
Navigator’s contracts have typically been extended upon expiry
Time-charter
Not delivered
■
Average utilization of 97.6% and daily TC equivalent of USD 26,659 during the last 7 years
Spot
Option
■
Typical customers are producers of hydrocarbons, trading houses and logistics companies
The chartered-in vessel Maple 3 is on a time charter contract with Grupo Tomza until March 2014 with a 2 x 6 month extension option
The chartered-in vessel Arctic Gas will be redelivered to its owner in January 2013
30
WORLD WIDE WEB
AGENDA
Sub headline
1.
The contemplated bond issue
2.
Company overview
3.
A primer on the LPG market
4.
Financials
5.
Appendix
31
STRONG OPERATIONAL TRACK RECORD
Utilization
Daily TC equivalent rates
USD ‘000 per day
Average 2005 - 2011:
97.6% utilization
97.3%
96.8%
99.4%
98.7%
97.1%
96.2%
97.4%
99.4%
27.4
24.5
2005
2006
2007
2008
2009
2010
2011
9M 2012
2005
2006
Average 2005 - 2011:
USD 26,659 per day
28.6
2007
29.7
2008
28.9
2009
23.6
24.0
25.4
2010
2011
9M 2012
Contract backlog for the Navigator fleet1 (prior to the acquisition)
Vessel days
2
Committed charter days
Available days
2
2
Charter coverage
Contracted revenue (USDm)
Average committed TC equivalent rate (USD / d)
Contracted EBITDA3 (USDm)
1)
2)
3)
Q4-12
2013
2014
2015+
Total
1,196
4,745
4,745
n.m.
n.m.
1,133
2,507
1,255
6,464
11,359
63
2,238
3,490
n.m.
n.m.
95%
53%
26%
n.m.
n.m.
32
72
33
161
298
27,847
28,831
26,599
24,943
n.m.
20
47
22
115
204
Contract backlog from 30/09/2012, but including any new charters made during Q4-2012
Excluding any off-hire related to drydocking
Contracted EBITDA calculated as contracted revenue less estimated vessel operating expenses for the charter period, including estimated broker commissions and other charter-related
fees and expenses but excluding any non-charter related costs such as general and administrative costs, drydocking expenses and other costs
32
THE ACQUISITION WILL BE FULLY FINANCED
FOLLOWING THE BOND ISSUE
Summarized sources and uses1 (USDm)
Sources
Secured bank debt
- acquisition
Secured bank debt
- 4 x newbuilds
Undrawn facilities
Senior unsecured
bond
Timing of transactions and financing1/2
Uses
270
Acquisition of
vessels
Q4-12 Q1-13 Q2-13 Q3-13 Q4-13
180
Surplus for general
corporate purposes
71 - 96
0
203
93
82
93
0
APM prepayment (10%)
47
-20
-9
-8
-9
0
0
0
0
0
10
10
160
180
47
183
83
83
93
160
650
100 - 125
0
0
0
0
Secured bank debt
0
117
53
47
53
120
390
Undrawn facilities
30
0
0
0
0
0
30
0
75
0
0
0
0
75
130 - 155
192
53
47
53
2014 newbuilds
Total uses
100 - 125
75
Cash as of Q3-12
37
Contracted EBITDA
Q4-12 - 2014
89
Sources
New equity
Total financing
Cash as of Q3-2012
Total sources
721 - 746 Total uses
Total sources before op. CF
Contracted EBITDA
721 - 746
0 100 - 125
120 595 - 620
37
0
0
0
0
167 - 192
192
53
47
53
0
37
20
14
13
10
10
22
89
47
230
313
397
490
650
650
120 632 - 657
Summary
Cuml. uses
Cuml. sources
Cuml. contracted EBITDA
Surplus for gen. corp. purposes
1)
2)
3)
470
APM vessel acquisition
Senior unsecured bond
New equity
Total
Uses
470
Remaining capex 120
4 x newbuilds3
30
2014
Schematic overview for the financing of the acquisition and newbuilds, actual allocation of capital may vary
Timing of financing and cash flows based on estimated delivery dates of acquired vessels
Total newbuild cost of USD 200m for four newbuilds, with a deposit of USD 20m already paid
33
167 - 192 359 - 384 412 - 437 459 - 484 512 - 537 632 - 657 632 - 657
67
89
89
140 - 165 163 - 188 145 - 170 119 - 144 89 - 114
20
34
47
57
71 - 96
71 - 96
A PRUDENT CAPITAL STRUCTURE
FOLLOWING THE ACQUISITION
Navigator vessels
Vessel
Navigator Leo
Navigator Libra
Navigator Saturn
Navigator Mars
Navigator Neptune
Navigator Venus
Navigator Gemini
Navigator Taurus
Navigator Pegasus
Navigator Phoenix
Navigator Aries
Navigator Pluto
Total
Built
2011
2012
2000
2000
2000
2000
2009
2009
2009
2009
2008
2000
Size (Cbm)
20,500
20,500
22,085
22,085
22,085
22,085
20,500
20,500
22,500
22,500
20,500
22,085
Value1 (USDm)
49.0
49.0
34.0
34.0
34.0
34.0
48.0
48.0
48.5
48.5
48.0
34.0
509.0
Vessel leverage following the acquisition
Debt
(Q4-2012)
Loan to
value
74
56%
200
80
450
Built
1998
2000
2008
2009
2009
2010
2010
2011
2011
2011
2011
Size (Cbm)
20,928
20,902
20,500
20,500
20,500
22,500
22,500
22,500
22,500
22,500
22,500
Value2 (USDm)
30.0
31.0
47.0
48.0
48.0
41.0
41.0
41.0
41.0
41.0
41.0
450.0
120
401 - 426
55 - 80
100 - 125
169
57%
100 - 125
270
509
266
0
0%
243
48%
Debt
Loan to
value
633
243(3)
Acquired vessels
Vessel
Maersk Humber
Caribe
Maersk Heritage
Maersk Harmony
Maersk Honour
Maersk Glory
Maersk Grace
Maersk Gusto
Maersk Genesis
Maersk Galaxy
Maersk Global
Total
1,159
Current fleet
Acquisition
Bank loans
Bond
Newbuilds
Combined fleet
Equity (vessel value less debt)
Summary including newbuilds
270
60%
# of vessels
Value (USDm)
Debt (USDm)
Pro-forma
Loan to value
Navigator vessels
12
509
243
48%
Acquired vessels
11
450
270
60%
Unsecured bond
Total
Newbuilds
270
60%
Total
100 - 125
23
959
613 - 638
4
200
120
64 - 67%
60%
27
1,159
733 - 758
63 - 65%
Source: Three independent shipbrokers approved by Navigator’s bank syndicate, Navigator Gas
1) Valuation of Navigator Mars, Navigator Venus, Neptune, Gemini, Taurus, Pegasus and Phoenix based on two independent valuations dated 19/07/2012 and 20/04/2012. Valuation of
Navigator Libra, Leo and Saturn based on a valuation dated 17/08/2012. Valuation of Navigator Aries and Pluto based on Aries being sister vessel of Gemini and Taurus, while Pluto is
sister vessel to Saturn, Mars, Neptune and Venus
2) The values of acquired vessels are based on Company estimates. The valuations for Maersk Heritage, Harmony and Honour are based on the vessels being sisters to Navigator Aries,
Gemini and Taurus. The valuations for the fully refrigerated vessels are extrapolations based
34 on newbuild prices.
3) Debt per Q4-2012
34
SOLID FINANCIAL PERFORMANCE
Net revenue
Net income1
EBITDA
USDm
USDm
USDm
85
46
45
36
65
36
27
24
40
71
70
27
22
21
35
33
56
19
51
48
41
2005 2006 2007 2008 2009 2010 2011
1)
15
24
9M
2012
2005 2006 2007 2008 2009 2010 2011
Net income for 2008 adjusted for impairments and one-off costs of USD 22m
35
9M
2012
15
2005 2006 2007 2008 2009 2010 2011
9M
2012
NAVIGATOR HAS GROWN ITS FLEET THROUGH
CONSERVATIVELY LEVERAGED ACQUISITIONS
Key historical financials
USDm
Average number of owned vessels
P&L items
Net revenue
EBITDA
EBIT
Net Income
BS items
Cash
Restricted cash
Gross debt
Net debt
Total assets
Equity
Cash flow items
Operations
Investing
Financing before dividends
Net CF before dividends
Dividends
Net change in cash
Key ratios
EBITDA margin2
Equity ratio
Gross debt / EBITDA3
Net debt / EBITDA3
1)
2)
3)
2006
5.0
2007
5.0
2008
5.3
2009
7.1
2010
8.0
2011
8.3
9M 2012
11.1
48
33
22
21
51
36
25
27
56
36
25
24
70
45
29
27
65
35
17
15
71
40
21
19
85
46
28
22
21
0
0
-21
303
296
34
21
0
-34
308
302
26
14
30
4
353
305
11
0
110
99
450
334
16
0
98
82
451
347
27
0
144
118
525
372
37
0
220
183
672
439
13
0
0
13
0
13
33
-21
0
12
-20
-8
34
-63
29
-1
0
-1
43
-124
80
-1
0
-1
26
-5
-12
9
-3
6
45
-86
61
20
-10
10
39
-145
120
13
-2
10
69%
97%
0.0x
-0.6x
71%
98%
0.0x
-0.9x
65%
86%
0.8x
0.1x
63%
74%
2.5x
2.2x
55%
77%
2.8x
2.3x
56%
71%
3.6x
3.0x
54%
65%
3.6x
3.0x
Recurring net income, not including impairments and one-off costs of USD 22m
EBITDA / Net revenue
Gross debt / EBITDA and Net debt / EBITDA ratios are based on annualized EBITDA for 9M 2012 figures
36
HISTORICALLY ROBUST ASSET VALUES
COMPARED TO PRO FORMA DEBT LEVELS
Handy-size fully-refrigerated LPG carrier vessel values
70
Fully-refrigerated vessel values
Semi-refrigerated vessels receive
premium valuations in the market
Gross debt as of Q3 2012
220
New bank debt - acquisition
270
50
New bank debt - newbuilds
120
40
Additional draw - current facilities
60
Vessel value (USDm)
NIBD per vessel calculation
30
20
USD 125m bond
Bond issue
USD 100m bond
Less: Cash as of Q3 2012
100 - 125
37
Pro forma NIBD
10
0
Dec-03
30
703 - 728
Pro forma number of vessels
Dec-04
Dec-05
24k cbm F/R Newbuild
Dec-06
Dec-07
24k cbm F/R 3yrs. old
Dec-08
Dec-09
Dec-10
Dec-11
Pro forma NIBD per vessels
27
26.0 - 27.0
Navigator pro forma net debt / vessel
■
Values for modern fully-refrigerated handy-size vessels have consistently stayed above USD 30m since 2003, even
through the market trough in 2009-2011
■
Semi-refrigerated vessels receive premium market values compared to fully-refrigerated vessels due to increased
flexibility from being able to access all cargo types
■
The Navigator fleet will consist of 21 semi-refrigerated and 6 fully-refrigerated owned handy-size vessels after the
acquisition and delivery of the newbuilds
Source: Fearnley Research
37
RAPIDLY DELEVERAGING GOING FORWARD
Bank loans outstanding1 - end of year (USDm)
Comments
■
Navigator’s bank facilities have an
aggressive amortization profile
■
In the period 2013 – 2017 Navigator
will amortize approximately USD
285m in bank debt
633
590
120
Illustrative profile
Facilities not drawn
before delivery of
vessels
529
120
467
■ USD 134m repaid on existing
facilities
117
407
107
■ USD 118m repaid on acquisition
facility
348
270
97
254
87
222
■ USD 33m repaid on newbuild
facility
197
174
152
243(2)
2012
216
2013
Current facilities
1)
2)
Illustrative profile
Bullet maturity in
2017
190
163
2014
2015
Acquisition facility
136
2016
109
■
The acquisition and newbuild
facilities will be drawn in increments
as the respective vessels are
delivered
2017
Newbuild facility
Dashed lines are for illustrative purposes only, and show the amortization profile of the facilities rather than the actual amount outstanding, as facilities are not drawn prior to delivery of
the associated vessels, and the current facilites and acquisition facility have bullet maturities in 2017
Current facilities outstanding as of Q4-12 based on additional draw of USD 30m for acquisition prepayment of 10% and amortisation of USD 7m over the quarter
38
WORLD WIDE WEB
BALANCE
SHEET PRIOR TO THE TRANSACTIONS
Sub headline
Assets (USDm)
2009 2010 2011 30/09/2012 Equity and liabilities (USDm)
Current assets
Current liabilities
10.5
16.2
26.7
37.2
Accounts receivable, net
2.7
3.4
1.3
Prepaid exp. and other curr. assets
2.2
8.2
Inventories
1.9
17.3
Cash and cash equivalents
Total current assets
Current portion of long term debt
0.0
6.1
14.8
26.8
5.2
Accounts payable
2.7
3.5
4.4
5.1
5.4
8.7
Accrued expenses and other liabilities
2.4
2.3
2.1
4.7
3.6
4.4
4.1
Deferred income
0.9
0.0
2.0
3.2
31.4
37.9
55.2
Total current liabilities
5.9
12.0
23.2
39.8
Long term debt, net of current portion
110.0
91.9
129.5
193.1
Total long term liabilities
110.0
91.9
129.5
193.1
0.1
0.1
0.1
0.1
287.7
288.9
305.0
352.4
Accumulated other comprehensive loss
-0.1
-0.1
-0.1
-0.1
Retained earnings
46.3
58.0
67.1
86.4
Total stockholders’ equity
333.9
346.9
372.0
438.7
Total liabilities and SHs’ equity
449.9
450.8
524.8
671.6
Long term assets
Long term liabilities
431.3
418.5
455.3
593.0
Vessels under construction
0.0
0.0
30.2
20.1
Other fixed assets, net
0.4
0.3
0.2
0.2
Deferred finance costs, net
0.8
0.6
1.2
3.1
Total long-term assets
432.5
419.3
486.9
616.4
Common stock
Total assets
449.9
450.8
524.8
671.6
Additional paid-in capital
Vessels in operation, net
2009 2010 2011 30/09/2012
Stockholders’ equity
39
CLOSING REMARKS
Robust fundamentals
• Energy
• Raw Materials
• Fertilizers
• US Shale Gas
Market position
• Market leader
• Pure-play
• Versatile vessel capabilities
• Visible orderbook
• Solid track Record
Solid Financials
• Fully financed following
bond issue
• Cash generative business
• Rapid deleveraging
• High vessel utilization
Navigator Gas has all comfort factors in place,
and is in an outstanding position to deliver
continued strong results in the attractive
handy-size gas carrier space
40
WORLD WIDE WEB
AGENDA
Sub headline
1.
The contemplated bond issue
2.
Company overview
3.
A primer on the LPG market
4.
Financials
5.
Appendix
41
APPENDIX
A: FINANCIALS
WORLD WIDE WEB
INCOME
Sub headline STATEMENT
2005
2006
2007
2008
2009
2010
2011
Nine months
ending 30/09/2012
42.7
50.2
51.4
59.7
72.5
82.0
88.9
106.5
Voyage expenses
1.3
2.0
0.5
3.3
2.2
17.4
18.0
21.3
Chartered-in cost
-
-
-
-
-
-
-
7.1
1.1
1.1
1.3
1.9
2.7
3.0
2.7
3.2
14.4
12.3
10.8
14.3
18.2
21.4
22.9
24.3
D&A
6.7
11.5
11.1
11.9
15.4
17.9
18.7
17.8
General & Admin Costs
1.5
1.5
2.6
3.7
4.9
4.9
5.4
4.8
17.7
21.7
25.1
24.5
29.1
17.5
21.2
28.0
Vessel value write downs
-
-
-
19.2
-
-
-
-
Strategy review costs
-
-
-
2.9
-
-
-
-
Net Interest expense/(Income)
2.3
0.5
-1.7
0.1
2.3
2.4
2.4
5.9
Income taxes
0.0
0.0
0.1
0.1
0.1
0.1
0.1
0.4
Net Income
15.4
21.3
26.8
2.2
26.7
15.0
18.7
21.7
USDm
Operating Revenue
Commissions
Vessel Operating Expenses
Operating Income
42
APPENDIX
A: FINANCIALS
WORLD WIDE WEB
CASH
FLOW STATEMENT
Sub headline
2009
2010
2011
Nine months ending
30/09/2012
Net income
26.7
15.0
18.7
21.7
Depreciation and amortization
USDm
Cash flows from operating activities
15.4
17.9
18.7
17.8
Stock based compensation
2.1
1.2
0.8
0.5
Amortization of direct financing costs
0.2
0.2
0.3
0.8
Changes in accounts receivable
-1.7
-0.7
2.1
-3.9
Changes in prepaid expenses and other current assets
-0.2
-6.0
2.8
-3.3
1.8
0.0
2.5
4.6
Changes in inventories
-1.5
-1.7
-0.9
0.3
Net cash provided by operating activities
42.8
25.9
45.0
38.6
Cash flows from investing activities
Release of restricted cash for vessel purchase
14.3
0.0
0.0
0.0
-136.1
0.0
0.0
-100.5
0.0
0.0
-85.5
-44.8
Payment of dry docking costs
-2.2
-4.9
0.0
0.0
Purchase of other fixed assets
-0.2
0.0
-0.1
-0.1
-124.2
-4.9
-85.6
-145.5
90.0
0.0
52.6
173.8
Changes in accounts payable and other liabilities
Payment to acquire vessels
Payment for vessels under construction
Net cash used in investing activities
Cash flows from financing activities
Proceeds from long term debt, net of direct financing costs
-10.0
-12.0
-7.1
-100.9
Proceeds from issuance of stock, net of issuance costs
0.0
0.0
15.3
46.9
Dividends paid
0.0
-3.2
-9.6
-2.4
Net cash provided by financing activities
80.0
-15.2
51.1
117.3
Net increase in cash and cash equivalents
-1.4
5.7
10.5
10.4
Repayment of long term debt
43
APPENDIX B: DEMAND OUTLOOK
INCREASING GLOBAL LPG SUPPLY - DEMAND
EXPECTED TO INCREASE TO 90MT BY 2015
Comments
Global LPG tonnage demand
Exceptional Energy
■ LPG is used in more than 1,000 applications and
plays a key role in the transition towards a more
secure, sustainable and competitive energy model
100
90
80
70
60
Seaborne transportation
■ 10% of the 67 million tons of LPG shipped in 2010
were carried within the segment in Navigator
operates
50
40
30
20
10
0
Growth
■ An additional 20 million tons of LPG are expected
to be transported by sea by 2014
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Source: ViaMar, Oct 2012
LPG end applications
Heating
44
Lightning
Transportation
APPENDIX B: DEMAND OUTLOOK
WORLD WIDE WEB
PETROCHEMICAL
GASES BUILDING BLOCKS FOR
Sub headline
COUNTLESS APPLICATIONS USED DAILY
Comments
Petrochemical gases tonnage demand
Raw Materials
■ Petrochemicals are demand-driven and closely
linked to GDP
20
18
16
14
12
10
8
Seaborne transportation
■ 35% of the 15 million tons of petrochemicals
shipped in 2010 were carried within the
segment in which Navigator operates
6
4
2
0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Ethylene
Growth
■ An additional 3 million tons of petrochemicals
are expected to be transported by sea by 2014
Propylene
Butadien
VCM
Source: ViaMar, Oct 2012
Petrochemical gases end applications
45
APPENDIX B: DEMAND OUTLOOK
WORLD WIDE
WEB
STEADY
SOURCE
OF SEABORNE TRANSPORTATION
Sub headline
OF AMMONIA
Comments
Ammonia tonnage demand
Fertilizers
■ Population growth and developments in the
agriculture industry have positive effects on the
demand for ammonia
20
18
16
14
12
10
Seaborne transportation
■ 5% of the 16.2 million tons of ammonia shipped
in 2010 were carried within the segment in
which Navigator operates
8
6
4
2
0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Source: ViaMar, Oct 2012
Growth
■ An additional 2.5 million tons of ammonia are
expected to be transported by sea by 2014
Raw materials end applications
46
Navigator Gas US
38th Floor, 399 Park Avenue
Navigator Gas UK
Contact Details
21 Palmer Street
New York NY 10022
London SW1H 0AD
Tel: +1 (212) 355 5893
Tel: + 44 (0)20 7340 4850
www.navigatorgas.com
47