The process of debt optimization continues apace at Flex LNG, as management continues to squeeze the balance sheet for what seems to be a limitless source of liquidity.

Last week, Cool Company Ltd. (“CoolCo”) successfully concluded a transaction to acquire four modern LNG carriers, Kool Orca, Kool Firn, Kool Boreas, and Kool Baltic, from Eastern Pacific Shipping (“EPS”), the company’s majority shareholder, for a purchase price of approximately $660 million.

Good shipping markets tend to tip the scale of capital allocation policies towards dividends, particularly when bolstered by a positive supply side story highlighted by few slots and expensive newbuilding prices. How long these conditions will last is always a question.

Having put out a deal structure earlier this month for a new bond deal for Bluewater Holding B.V. (“Bluewater”), the company’s bankers soon discovered that investors were not quite on board with the suggested terms leaving a gap to be bridged to achieve the necessary meeting of the minds.

Those of us involved in shipping live in a bifurcated universe these days. The world has moved on from the pandemic but struggles with its aftereffects. Today, the world struggles with inflation, high interest rates, a potential recession, a slowing Chinese economy, and the geopolitics of the war in Ukraine. Could the picture be gloomier?

Societe Generale’s Paul Taylor is a very busy man. His day job involves expanding the scope of the bank's Maritime Industries business. But his public persona seems to be singularly focused on helping the shipping industry save the environment through his leadership role, together with Citi’s Michael Parker of the Poseidon Principles with its decarbonization goals

In addition to its primary focus on its operating businesses, the management of Atlas Corp. is seemingly equally devoted to another priority – balance sheet optimization. Understanding a right-sized balance sheet provides a base for growth and stability, management carefully manages leverage and liquidity with verve.

To say the management of Dorian LPG is both cautious and disciplined would be an understatement. Over the last few years, the company’s capital allocation policy was unswerving and involved carefully reinvesting, paying down and refinancing debt and returning capital to shareholders through share buybacks.

Having received a second bite of the apple, Danaos Corporation clearly learned the importance of moderation when it comes to leverage and took that lesson to heart. As shown in the graph below, the company reduced its net debt from $2.27 billion in 2015 to $0.4 billion as of Q3 2022, a reduction of $1.9 billion.

Teekay Corporation last week announced that Vince Lok would retire from his position as Executive Vice President and Chief Financial Officer effective January 1, 2023, after nearly 30 years with the company, including the past 16 years as Teekay’s Group CFO.

Having experienced a near death experience a few years back, Teekay Tankers became focused, some might say obsessively, on repairing/strengthening its balance sheet and improving liquidity. Within that short time frame, the company has completed a remarkable turnaround.

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