Navigator Holdings Ltd. · NYSE:NVGS
Navigator — Debt Investor Presentation (October 2018)
44 slides from Navigator's debt investor presentation, October 2018
Slide 1: Navigator Holdings Ltd. NOK [600-800] million Senior Secured Bond Issue
Navigator Holdings Ltd. NOK [600 - 800] million Senior Secured Bond Issue October 2018 “Navigator Holdings Ltd. (NYSE:NVGS)” 1
Slide 2: Disclaimer
DISCLAIMER About this Presentation We, Navigator Holdings Ltd. (“Navigator”, “Navigator Gas” or the “Company”), have prepared this presentation, together with its enclosures and appendices (collectively, the “Presentation"), to provide introductory information solely for use in connection with the c
Slide 3: Disclaimer (cont.)
DISCLAIMER (CONT.) Selling and transfer restrictions: Neither this Presentation nor any copy of it nor the information contained herein is being provided, and nor may this Presentation nor any copy of it nor the information contained herein be distributed directly or indirectly to or into the United
Slide 4: Table of Contents
TABLE OF CONTENTS TRANSACTION SUMMARY NAVIGATOR GAS ETHYLENE EXPORT TERMINAL JV FINANCIAL INFORMATION RISK FACTORS APPENDIX 4
Slide 5: Credit Highlights
CREDIT HIGHLIGHTS ■ A highly versatile modern fleet with an average age of 7.6 years capable of serving all customer needs across the three different cargo types: LPG, petrochemicals, and ammonia – maximizing utilization and profitability Market leader in handy-size gas carriers with strong ■ Operat
Slide 6: Ethylene Export Terminal Investment Fundamentals
ETHYLENE EXPORT TERMINAL INVESTMENT FUNDAMENTALS Backdrop Provide Increasing Share of Stable Cash Flows ■ Continued international ethylene arbitrage persists and further growth is capped by ■ Nearly 50% of the terminal’s 1 million ton annual the current insufficient infrastructure for deep sea expor
Slide 7: Transaction Overview and Asset Backing
TRANSACTION OVERVIEW AND ASSET BACKING Transaction Overview Sources & Uses ■ Navigator Holdings Ltd. (“Navigator”) is contemplating the issuance of NOK SOURCES USDm [600-800] million of Senior Secured bonds NOK [600–800] million Senior Secured Bonds (~USD [75-100] million) 75 -100 ■ The net proceeds
Slide 8: Transaction and Security Structure
TRANSACTION AND SECURITY STRUCTURE ■ Clean debt structure with the parent (NYSE listed entity with current market capitalization of ~USD 680 million) as the Issuer Existing USD 100m 7.75% ■ The bonds shall constitute senior obligations of The Issuer and rank Unsecured Bond at least pari passu with a
Slide 9: Key Terms
KEY TERMS Issuer Navigator Holdings Ltd. Issue Amount NOK [600 - 800] million The net proceeds from the Bonds shall be used (i) to partly fund the Issuer’s portion of the construction cost of the Enterprise Navigator Ethylene Use of proceeds Terminal and (ii) for general corporate purposes Status Se
Slide 10: Table of Contents
TABLE OF CONTENTS TRANSACTION SUMMARY NAVIGATOR GAS ETHYLENE EXPORT TERMINAL JV FINANCIAL INFORMATION RISK FACTORS APPENDIX 10
Slide 11: A Global Leader in Shipping of Liquefied Gases
A GLOBAL LEADER IN SHIPPING OF LIQUEFIED GASES Highlights Revenue & EBITDA 2013 – 2018H1(LTM) Balance Sheet ■ Navigator Gas is the market leading shipper of liquefied Net operating revenue EBITDA Total assets Total equity gases (LPG, petchems and ammonia) in the handysize segment 53% $282m $260m • O
Slide 12: The Handysize Consolidator Over the Last Decade
THE HANDYSIZE CONSOLIDATOR OVER THE LAST DECADE Navigator Holdings Navigator Holdings’ entire The Company acquired 11 Navigator Gas moved into the Navigator Holdings Expected formed with the purpose ownership and management handysize gas vessels from mid-sized market, commissioning contemplating the
Slide 13: Expanding Our Position Along the Value Chain
EXPANDING OUR POSITION ALONG THE VALUE CHAIN “US gas output hits fresh record in July: EIA” 28 Sep 2018 18:59 (+01.00 GMT) Highly integrated and industrialized shipping segment with relatively low volatility compared to traditional commodity shipping 13
Slide 14: Our Strategy of Diversification: Stability in a Cyclical Business
OUR STRATEGY OF DIVERSIFICATION: STABILITY IN A CYCLICAL BUSINESS Changing Cargo Mix – Move from Simple to Complex Diverse Trades 100% 92.5% 92.7% 94.4% 92.9% 90.5% 85.8% 88.6% 90.5% 87.9% 83.9% 90.9% LPG - Regional 90% Other Petchems 80% Spot 70% Ethylene Spot 60% Petchems TC 50% LPG Spot 40% 30% L
Slide 15: 15,000-25,000 CBM Handysize Demographics and TC Rates
15,000-25,000 CBM HANDYSIZE DEMOGRAPHICS AND TC RATES LPG Handysize Global Fleet Ethane/Ethylene Global Fleet >15,000 cbm Existing & Newbuild Owner Semi Ref. Fully Ref. Total Owner Total Handysize Midsize VLEC Navigator Gas 17 6 23 Navigator Gas 10 4 - 14 Ultragas 8 - 8 Evergas - 8 2 10 Naftomar 3 4
Slide 16: Road to 2020 Transformational Milestones
ROAD TO 2020 TRANSFORMATIONAL MILESTONES 2 Enterprise Navigator Ethylene Export Terminal Mariner East 2 1 Opening of new The 275,000 bbls/day Mariner pipelines ramp up The terminal will have a throughput capability East 2 pipeline, extending shipping out of of 1 million metric tons (Mts) of ethylene
Slide 17: Table of Contents
TABLE OF CONTENTS TRANSACTION SUMMARY NAVIGATOR GAS ETHYLENE EXPORT TERMINAL JV FINANCIAL INFORMATION RISK FACTORS APPENDIX 17
Slide 18: U.S. Ethylene Competitive Fundamentals
U.S. ETHYLENE COMPETITIVE FUNDAMENTALS US Ethylene Expansions 2017 – 2022 US Production & International Ethylene Price Arbitrage Mts Millions 2020- Mts 000’s 2018 2019 2022 ■ The US chemical industry benefits from long lasting resources of cheap ethane 45 Exxon – Baytown 1,500 gas providing a compet
Slide 19: Ethylene Terminal - Project Overview
ETHYLENE TERMINAL - PROJECT OVERVIEW Highlights Enterprise Navigator Ethylene Export Terminal ▪ The export terminal will have a storage facility with Located at Enterprise’s Morgan’s Point, nameplate capacity of 1 million tons of ethylene and a Texas facility on the Houston Ship Channel capability o
Slide 20: Ethylene Terminal - Project Overview (cont.)
ETHYLENE TERMINAL - PROJECT OVERVIEW (CONT.) Capex and Financing Considerations Current Offtake Status ■ Navigator’s share of total capital commitments estimated Navigator’s share of Capex: Already Paid Remaining Installments to be USD 155 million which is materially below initial budget (progressin
Slide 21: Table of Contents
TABLE OF CONTENTS TRANSACTION SUMMARY NAVIGATOR GAS ETHYLENE EXPORT TERMINAL JV FINANCIAL INFORMATION RISK FACTORS APPENDIX 21
Slide 22: Gas Carrier Charter Rates
GAS CARRIER CHARTER RATES Navigator’s Daily TC Rates (US$) 78,000cbm - VLGC $33,000 $30k $29k $28k $30k $30k 22,000cbm - Semi-ref - Handy $30,000 $26k $2,200 $26k $27,000 22,000cbm - Fully-ref - Handy $24k $24k $24,000 $21k $21,000 $20k 8,250cbm - Small $18,000 Average 2008 -2018 US$26,052 per day $
Slide 23: Solid Committed Revenue
SOLID COMMITTED REVENUE Total US$ 461.9M in committed revenue 2018-2021 2021+ Committed Revenue EBITDA Average TCE Committed Revenue US$ 320.3M US$ 214.3M US$ 25,247 US$ 141.6M Committed revenue for the Navigator fleet Remaining 6M of 2019 2020 2021 Total 2018 Available days 6,946 13,656 13,644 13,8
Slide 24: Daily Operating Expenses
DAILY OPERATING EXPENSES Navigator’s Daily Operating Expenses Analysis of Operating Expenses $9,000 $8,115 $8,068 $7,916 $7,925 $8,000 $7,779 $7,699 $7,632 $7,635 $7,316 8% $7,102 $7,000 7% 3% $6,000 5% 0% $5,000 $4,000 14% 60% $3,000 3% $2,000 $1,000 Crew Lubes & Stores Repairs Upgrade Insurance Ad
Slide 25: Break Even Analysis
BREAK EVEN ANALYSIS Comments Break even and TCE rates $32,500 For the six months ended 30th of June 2018, the Operating expenses Brokerage commission G&A Company had a cash break even rate of US$ $30,000 $29,561 9,853 per day per vessel, before interest expenses Drydocking costs Interest expenses Av
Slide 26: Strong Balance Sheet & Banking Relationships
STRONG BALANCE SHEET & BANKING RELATIONSHIPS Lending Facilities Outstanding - end of year (US$’M) As of June 30, 2018 Actual (US$'M) Cash 55.1 888 Debt 818 Secured term loan facilities 724.3 [75-100] Unsecured Notes 100.0 [75-100] Total debt 824.3 132 689 Total Shareholders’ equity 957.7 116 629 Tot
Slide 27: Finance: Balance Sheet
FINANCE: BALANCE SHEET (US$'M) 2014 2015 2016 2017 1H2018 Assets Cash and cash equivalents 62.5 87.8 57.3 62.1 55.1 Other current assets 22.0 37.2 36.5 50.0 41.6 Vessels in operation (net) 1,145.1 1,264.4 1,480.4 1,740.1 1,704.9 Vessels under construction 131.4 170.8 150.5 - - Investment in equity a
Slide 28: Finance: Cash Flow Statement
FINANCE: CASH FLOW STATEMENT (US$'M) 2014 2015 2016 2017 1H2018 Net Income 87.7 98.1 44.6 5.3 -2.5 Depreciation and amortisation 45.8 53.5 62.3 73.6 38.4 Drydocking payments -5.3 -11.6 -9.9 -0.3 -2.9 Non cash movements 3.8 5.9 4.9 6.6 -2.6 Change in working capital 1.1 3.6 -15.2 -9.3 12.7 Net Cash f
Slide 29: Finance: Income Statement
FINANCE: INCOME STATEMENT (US$'M) 2014 2015 2016 2017 1H2018 Net operating revenue 259.9 281.5 251.9 243.1 122.1 Operating expenses: Address and brokerage commissions 6.7 7.0 5.8 5.4 2.4 Charter in costs 9.1 - - - - Vessel operating expenses 70.2 78.8 90.9 101.0 52.8 Depreciation and amortisation 45
Slide 30: Summary
SUMMARY 1 Market leader in the highly concentrated core handysize LPG segment with a modern and versatile fleet Enterprise Navigator Ethylene Export Terminal supports Navigator’s core business and captures 2 additional value in the supply chain 1st priority security in 4 Handysize ethylene capable c
Slide 31: Table of Contents
TABLE OF CONTENTS TRANSACTION SUMMARY NAVIGATOR GAS ETHYLENE EXPORT TERMINAL JV FINANCIAL INFORMATION RISK FACTORS APPENDIX 31
Slide 32: Summary of Key Risk Factors
SUMMARY OF KEY RISK FACTORS A number of risk factors may adversely affect the Company and its subsidiaries (together the "Group"). This summary is intended to highlight some of those risks, but is not intended to be exhaustive. Reference is made to the Company's published 2017 annual report page 3-2
Slide 33: Summary of Key Risk Factors Cont'd
SUMMARY OF KEY RISK FACTORS CONT’D • If in the future our business activities involve countries, entities and individuals that are subject to restrictions imposed by the U.S. or other governments, we could be subject to enforcement action and our reputation and the market for our common stock could
Slide 34: Summary of Key Risk Factors Cont'd
SUMMARY OF KEY RISK FACTORS CONT’D • We are a holding company, and we depend on the ability of our subsidiaries to distribute funds to us in order to satisfy our financial obligations. • The vote by the United Kingdom to leave the EU could adversely affect us. Risks related to the Bonds • Market for
Slide 35: Table of Contents
TABLE OF CONTENTS TRANSACTION SUMMARY NAVIGATOR GAS ETHYLENE EXPORT TERMINAL JV FINANCIAL INFORMATION RISK FACTORS APPENDIX 35
Slide 36: Highly Experienced Management
HIGHLY EXPERIENCED MANAGEMENT ■ Chairman of the Board since August 2006 David Butters ■ Former Managing Director at Lehman Brothers Inc, where he was employed for more than 37 years Chairman, President and ■ A former Chairman of the board of directors of GulfMark Offshore, Inc. and a former member o
Slide 37: Gas Carrier Fleet Overview
GAS CARRIER FLEET OVERVIEW 284 37 13% 12 - - Fully-Refrigerated 95 6% 6 Ethylene / Ethane 14 - Fully-Refrigerated 22 Semi-Refrigerated 62 8 7% Ethylene 26 Semi-Refrigerated / 332 16 5% Pressure Semi-Refrigerated / Pressure 633 6 1% Source: Fearnleys, 2018 37
Slide 38: Industry Overview: Three Main Classes of Gas Ships
INDUSTRY OVERVIEW: THREE MAIN CLASSES OF GAS SHIPS 38
Slide 39: Security Description
SECURITY DESCRIPTION POCKET PLAN NAVIGATOR NEPTUNE – ORION – SATURN – VENUS 22,000 CBM ETHYLENE/LPG CARRIER MAIN ENGINE CARGO TANKS Sulzer 6 RTA 52 Bi-lobe x 4 NOM RATING: 8,500 kW / 127 rpm Independent Type C (-104ºC; 5.3 Bar) DEADWEIGHT DECK TANK 23,495 mt 125 CBM (-104ºC; 18.0 Bar) x 2 SERVICE SP
Slide 40: The Company Operates a Diversified Fleet
THE COMPANY OPERATES A DIVERSIFIED FLEET SAILING FLEET Segment Built Size (cbm) Shipyard Handysize Market Leader Ethylene Capable Navigator Orion LPG 2000 22,085 Jiangnan Average size, Cbm # of Vessels Average age Navigator Venus LPG 2000 22,085 Jiangnan Navigator Saturn LPG 2000 22,085 Jiangnan Nav
Slide 41: Partnership Strategy: Integral Part of the Value Chain
PARTNERSHIP STRATEGY: INTEGRAL PART OF THE VALUE CHAIN Producer of LPG Producer of Ethylene Producer of Fertilizers. Leading North American 4x Ice Class Semi-Refrigerated 1x Large Ethane capable 1 x New generation Midsize provider of midstream energy vessels on 5-10 year contracts vessel on 10 year
Slide 42: US Gulf Infrastructure Set for Global NGL Exports
US GULF INFRASTRUCTURE SET FOR GLOBAL NGL EXPORTS 1 2 3 Unrivalled pipeline 4 Dedicated 30k ton 5 Dedicated docks Shale fracking Almost unlimited connectivity to all refrigeration tank facilitating ethylene provides storage for NGL’s from major crackers in gulf enable loading at 1k shipments to Euro
Slide 43: Strong JV Partner in Enterprise Products Partners L.P.
STRONG JV PARTNER IN ENTERPRISE PRODUCTS PARTNERS L.P. Enterprise Products Partners L.P. Enterprise Logistics Chain Enabling Export NGL’s ■ Listed on NYSE with a current market capitalization of $63bn and rated BBB+ by Standard & Poor’s ■ One of the largest publicly traded partnerships and a leading
Slide 44: Contact details
NGT Services (UK) Limited Verde Building 10 Bressenden Place SW1E 5DH United Kingdom Tel: +44 (0) 20 7340 4850 Navigator Gas US, LLC 650 Madison Avenue 25th Floor New York NY 10022 United States of America Tel: +1 (212) 355 5893 NGT Services (Poland) Sp. Z o.o. MAG Centrum ul.T.Wendy 15 Gdynia, 81-3
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