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Ship leasing company due diligence

Client: European Hedge Fund

A European hedge fund instructed Drewry to conduct a detailed due diligence of an Asian ship leasing company.

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Client Objectives

  • Drewry conducted an independent market assessment of containers, dry bulk, and liquid bulk, undertook vessel valuation of the target company’s entire fleet, including technical due diligence of the vessels and counterparty risk assessment.

 

Drewry Approach

  • Detailed technical due diligence of the target company’s entire fleet based on class records, electronic documents and certificates in order to conclude whether the vessels are fit for purpose and estimate if there were any future cost implications from upcoming shipping regulation;
  • Charter free and charter attached valuations of all vessels. The target company fleet consisted of crude and product tankers, chemical tankers, dry bulk carriers, and containerships;
  • Sectoral outlook of all the vessel segments the target company was involved in;
  • Counterparty risk assessment of the target company involving detailed financial analysis.

 

Results Achieved

  • The detailed due diligence of the company uncovered both vulnerabilities and strengths.
  • It was also followed by the bankruptcy of some of the counterparties and a backdrop of slowing global economic growth.
  • In the final analysis the investor did not pursue the opportunity.

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