Polaris Shipping hopes to raise 150 billion won ($125 million) from private equity firms at home and abroad to improve its liquidity position and protect the dry bulk carrier’s credit rating from further downgrades.
The company is contacting potential investors directly without going through a management firm, sources said on Wednesday (June 10), and expects to secure investments by the end of August.
“Polaris Shipping is preparing diverse plans to secure liquidity, including a rights offering and mezzanine financing, in order to maintain its credit ratings and raise funds,” a source said.
Korea Investors Service recently marked down the shipper’s non-guaranteed bonds, dropping the rating from BBB+ to BBB0. The ratings of its commercial paper and asset-backed short-term bonds have also been reduced by one notch, from A3+ to A30, and Polaris is on a watchlist for possible further downgrades.
If the company does manage to attract funds through a rights issue, existing shareholders’ stakes may decrease. Polar Energy & Marine is currently the largest shareholder, with a 58.35 percent stake. Medici Investment and Aeneas-NH Private Equity Fund hold stakes of 22.17 percent and 13.62 percent, respectively.
Polaris Shipping is likely to be valued at 2.1 trillion won ($1.7 billion) if the entire rights issue proceeds, based on the valuation set during its 2017 pre-initial public offering funding round. Using this valuation, new investors would be expected to take a stake of less than 10 percent in the company. (Reporting by Ik-hwan Choi)