2009.10.13 blt company presentation...

Company PresentationANALYSTS MEETING & PRESS CONFERENCEANALYSTS MEETING & PRESS CONFERENCE

Oct 2009

1

Agenda

Section

1. PT Berlian Laju Tanker Tbk

2. Industry Dynamics

3. Proposed Transaction

PT Berlian Laju Tanker Tbk

Section 1

PT Berlian Laju Tanker Tbk (BLT) - Overview

Leading worldwide seaborne liquid bulk cargo transportation specialistand one of the largest chemical tanker operators in the world

104 tankers*2.4 million DWT

Average age 7.5 years

Chemical tankers Oil tankers FPSO tankersGas tankers

63 operational l /9 b ildi

14 vessels 1 vessel13 operational l /4 b ildivessels/9 newbuildings

Cargo: Organics, in-organics and edible oils

1,201,716 DWT

Cargo: crude oil and refined petroleum products

929,723 DWT

Average age 15 9

Location: Salawati oil exploration field, Papua

Production capacity: 15,000 bpd (60,874

vessels/4 newbuildings

Cargo: liquefied gases (LPG, propylene, propane, ethylene)

382,626 CBM (226,560

Average age 6.4 yearsAverage age 15.9 years DWT)

Converted in 2006

(DWT)


* Incl. 13 newbuildings 4

Strategic Objective

Revenue contract coverage

Consistent Cash Flow Growth

G thDiversified business mix

Growth through the cycles

55

BLT with consistent growth through the cycles

309340

EBITDA

Gl b l 309

240

260

280

300

320 Global economic

crisis

133

159

183

140

160

180

200

220

US

$m Asian economic

crisis

9/11 aftermath

16 17 18 1825 33

41 43 4537 44

57

40

60

80

100

120Recession

after Gulf War

crisis

5 7 9 16 17 18 18

0

20

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Compounded annual growth rate of EBITDA in excess of 25% p.a., and always growing every

6

Note: 1990 to 1998 based on Indonesia GAAP in rupiah, 1999 to 2002 based on Indonesia GAAP in US$, 2003 to 2008 based on IFRS in US$EBITDA including profit/loss from associated companies and JV’s

6

p g p , y g g yyear with only a single exception in 2002

Diversified Business Mix

BLT’s diversified mix has enabled it to achieve stability as well as capitalise on growth and high margin opportunities over time

Oil and chemical freight rates (US$/day) BLT’s strategy to maintain a diversified business mix

BLT’s revenues are well diversified across the oil, chemical and gas segments

– The fleet and revenue mix provides exposure to different non-correlated business cycles

BLT has traditionally been doing business in Asia but is expanding its presence globally

Over last four years, BLT has maintained a balance between spot contracts, time charters and contracts of affreightmentof affreightment

Source: Drewry

Sector composition of FY2008 revenues

Geographical composition of FY2008 shipping revenues

FY2008 revenues by contractsvs. spot

7

BLT History and Milestones

Evolution from domestic tanker business to leading international player

BLT’s shareholding as at 10 Aug 2009 1981 Established with 2 tankers on charter to Pertamina (Indonesian state-owned oil company)

1986 E t d i t h i l t t ti1986 Entered into chemical transportation

1989 Entered into gas transportation

1990 Listed on the Jakarta and Surabaya stock exchanges

1998 Acquired Asean Maritime Corp including its subsidiary1998 Acquired Asean Maritime Corp, including its subsidiary Gold Bridge Shipping Corp, which owned 7 chemical tankers, to accelerate growth in North Asia

2001 Expanded business into the Middle East and India

2004 Opened office in Glasgow2004 Opened office in Glasgow

2005 Opened office in Dubai

Issued US$50m convertible bond

Expanded business into Europe

2006 Primary listing on SGX-ST; first company to be dual listed in Indonesia and Singapore

Entered into FPSO/FSO sector 2007 Opened Mumbai office

Issued US$125m second convertible bond and US$400m

Note: PT Tunggaladhi Baskara is owned 99.99% by PT Bagusnusa Samudera Gemilang which is owned by Mr. Hadi Surya 82.03%

88

first high-yield bond Acquisition of Chembulk Tankers LLC Expanded business into the Americas

2008 Opened office in Sao Paulo - Brazil

BLT Strong Market Position

Forth Largest Chemical Tanker Company (# vessels)

Operator No of Vessels DWT

Strong Market Position

Large, modern fleet with a clear overweight of stainless vessels allows BLT to contract outStolt-Nielsen SA 118 2,875,000

Odfjell 99 2,538,000

Eitzen Chemical 84 1,665,000

BLT 72 1,201,000

stainless vessels allows BLT to contract out vessels to high quality customers

Scale is an important competitive advantage, provides flexible and dependable service

Tokyo Marine 67 1,415,000 Quality and long term relationships

Barriers to Entry

Large capital requirement to achieve scale

Source: Drewry, Eitzen ChemicalThe overview includes vessel under pool management and newbuildings

Well-positioned in the high growth intra-Asiachemical tanker space, with the largest sub 20,000DWT chemical tanker fleet in the Pacific Basin andthe largest globally

High value, technically sensitive cargos prohibit unproven entrants

Complex operations, organizational expertise

~90% of BLT’s chemical tanker fleet are stainlesssteel vessels

Long-term customer relationships and COAs

Regulatory and customer requirements

Highly sophisticated vessels required

99

Key Customers and Operating Areas

Shanghai

BeijingSeoul

Tokyo

Hong Kong

TaiwanMiddle East

North Africa

Glasgow

Dubai

Westport,CT

Rotterdam

Myanmar

JakartaSingapore

BangkokHong Kong

Mumbai

Australia

North Af rica

Sao Paulo

Headquarter

Representative Office / Operation Center

Chembulk Trading Coverage

BLT Trading Coverage

Recently opened marketing offices in Glasgow (2004) and Dubai (2005) to support BLT’s westward fleet operations and Shanghai (2005) to support BLT’s North Asian business and Mumbai (2007) to support South Asian business and Sao Paulo, Brazil (2008) to support BLT’s South America businesssupport BLT s South America business.

10

Indonesian Market Opportunities

Domestic regulations

• Cabotage principle

- Domestic shipping of non-oil/gas liquids only for domestic ship-owners from 1 Jan 2009

- Domestic shipping of oil/gas liquids only for domestic ship-owners from 1 Jan 2010

• All imports for state-owned companies to be carried by Indonesian controlled shipsregulations • All imports for state-owned companies to be carried by Indonesian controlled ships

• Long-term contracts for cargo-owners and Indonesian ship-owners

• Implementation of cabotage regulation very strict

• Significant new business from Indonesian government owned oil & gas company Pertamina

P t i tl d d USD 400 i ll t h t i th 100 l- Pertamina currently spends around USD 400 mio annually to charter in more than 100 vessel at any given time

- Around 75% of these are foreign-flagged vessels

- Between 2009-2010 there are around 50 foreign-flagged tankers which will come off charters, equivalent to around USD270 mio in annual revenues

Leading to increased

opportunities for BLT

- BLT has a strong longstanding relationship with Pertamina since 1981

• Cabotage principle also covers FPSO and offshore services vessels

• Indonesian domestic shipping market forecast to grow 8% in 2009 and 2010

• Indonesian fleet needs 1 8 mio dwt just to replace the foreign-flagged ships in Pertamina ANDGrowth of domestic

opportunity is huge and BLT is well-placed to

capitalize

• Indonesian fleet needs 1.8 mio dwt just to replace the foreign-flagged ships in Pertamina AND 1.3 mio dwt to supply demand from new growth into 2011 for a total of 3.1 mio dwt

• If include exports out of Indonesia, the wallet is even bigger

- Charter hire paid by oil companies total $1.5 bio

- 75% are carried on foreign-flagged ships Annual outflow of $1.125 bio

1111

capitalize • BLT is the largest ship operator in Indonesia and is well-placed to capture a significant slice of the growing domestic pie


50,00060,00070,00080,00090,000

100,000 VLCC 310K DWT TC Rate $/Day

010,00020,00030,00040,00050,000

007

007

007

007

007

007

007

007

007

007

007

007

008

008

008

008

008

008

008

008

008

008

008

008

009

009

009

009

009

009

009

009

$36,000Source: Clarkson Research

1/5/

20

2/5/

203/

5/20

4/5/

205/

5/20

6/5/

207/

5/20

8/5/

20

9/5/

2010

/5/2

0

11/5

/20

12/5

/20

1/5/

20

2/5/

203/

5/20

4/5/

205/

5/20

6/5/

207/

5/20

8/5/

20

9/5/

2010

/5/2

0

11/5

/20

12/5

/20

1/5/

20

2/5/

203/

5/20

4/5/

205/

5/20

6/5/

207/

5/20

8/5/

20

Opportunity from PertaminaVLCC 310 DWT TC Rate $/Day approx US$45,000Long Term Contract for 5 – 10 Years

Opportunity from PertaminaVLGC 80k CBM TC Rate $/Day approx US$50,000

* Assume OpexUS$6,000/day, borrowing 70% at 4% rate, residual value US$12.25mil and

f l lif f 14

60

70

80VLGC 82K CBM TC Rate $/Day

Long Term Contract for 5 10 YearsTranslates to Profit Margin 60%*, ROE 59%* Long Term Contract for 5 – 10 Years

Translates to Profit Margin 63%*, ROE 49%*

* Assume OpexUS$6,000/day, borrowing 70% at 4% rate, residual value US$11.25mil and

useful life of 14 years

10

20

30

40

50

60

$37,500Source: Clarkson Research

useful life of 29 years

1212

0

10


LPG FSO FOR CONOCOPHILLIPS INDONESIA• FIELD : BELANAK• SIZE : VLGC (VERY LARGE GAS CARRIER)• DELIVERY : LATE 2011FSO FOR MOBIL CEPU LtdFSO FOR MOBIL CEPU Ltd• FIELD : BANYU URIP• SIZE : VLCC (VERY LARGE CRUDESIZE : VLCC (VERY LARGE CRUDE

CARRIER)• DELIVERY : EARLY 2011 FPSO FOR PETRONAS CARIGALIFPSO FOR PETRONAS CARIGALI• FIELD : BUKIT TUA• SIZE : AFRAMAXSIZE : AFRAMAX• DELIVERY : LATE 2011

13


FPSO FOR KANGEAN ENERGY INDONESIA

• FIELD : PAGERUNGAN UTARA

SIZE MEDIUM RANGE WITH 8 000• SIZE : MEDIUM RANGE WITH 8,000 BOPD PROCESS CAPACITY

• DELIVERY : MID 2010DELIVERY : MID 2010

FPU FOR KANGEAN ENERGY INDONESIA

• FIELD : TERANG-SIRASUN-BATUR

• SIZE : 200 – 260 M IN LENGTH WITH 300 MMSCFD GAS DELIVERY,

DELIVERY MID 2010• DELIVERY : MID 2010

FSO FOR KANGEAN ENERGY

• FIELD : SEPANJANG• FIELD : SEPANJANG

• SIZE : AFRAMAX

• DELIVERY : LATE 2009 14

Oil and Gas Fleet of BLT and Newbuilding Projects

Oil Tankers Gas Tankers New Vessels Under Construction

Owned Built DWT Type Hull(1) Owned Built CBM Owned Built DWT/CBM TypeMT Tridonawati 1991 154,970 Crude Oil DH MT Gas Indonesia 1990 3,518 MT Iris 2010 12,500 Chemical IMO II/III SUS

MT Trirasa 1991 154 970 Crude Oil DH MT Gas Jawa 1989 3 596 MT Gas Batam 2010 3 500 Gas TankerMT Trirasa 1991 154,970 Crude Oil DH MT Gas Jawa 1989 3,596 MT Gas Batam 2010 3,500 Gas Tanker

MT Dewayani 1999 3,561 Oil Product DH MT Gas Kalimantan 1996 3,500 MT Gas Bangka 2010 5,000 Gas Tanker

MT Dewi Sri 1999 3,557 Oil Product DH MT Gas Lombok 2008 9,000 MT Gas Madura 2010 5,000 Gas Tanker

MT Gandini 1998 32,042 Oil Product DH MT Gas Maluku 1996 5,000 MT Wilutama 2010 25,400 Chemical IMO II/III SUS

MT Pradapa 1993 36,362 Crude Oil DS MT Gas Papua 2007 5,000 MT Watari 2011 25,100 Chemical IMO II/III SUS

MT Anjani 1985 36,882 Oil Product DS MT Gas Sulawesi 2006 5,000 MT Setyaboma 2011 12,500 Chemical IMO II/III SUS

MT Badraini 1991 111,777 Crude Oil DB MT Gas Bali 2007 5,000 MT Sakuntala 2011 12,500 Chemical IMO II/III SUS

MT Barunawati 1992 111,689 Crude Oil DB MT Gas Sumatera 1989 3,512 MT Wardani 2011 25,100 Chemical IMO II/III SUS

MT Barawati 1990 101,134 Crude Oil SH MT Gas Sumbawa 2008 9,000 MT Widawati 2011 25,400 Chemical IMO II/III SUS

MT B i 1990 96 6 2 C d Oil SH MT G N 1996 3 00 MT Pi l k 2011 19 990 Ch i l IMO II/III SUSMT Bramani 1990 96,672 Crude Oil SH MT Gas Natuna 1996 3,500 MT Pitaloka 2011 19,990 Chemical IMO II/III SUS

MT Pergiwo 1993 37,087 Crude Oil SH MT Tangguh Hiri(3) 2008 155,000 MT Partawati 2011 19,990 Chemical IMO II/III SUS

MT Ontari 1993 18,520 Oil Product SH MT Tangguh Sago(3)

2009 155,000 MT Gas Karimun 2012 3,500 Gas Tanker

Bareboat Chrt Built DWT Type Hull(1)FPSO Tanker

MT Gandari(2) 1999 30,500 Oil Product DH Owned Built CBM

FPSO Brotojoyo 1980 60,874

1515

Note :1) DH=Double hull, DS = Double Side, DB = Double Bottom, SH = Single Hull2) Ownership trough a 10 years bareboat charter3) BLT hold 30% stake

Large & Growing Modern Chemical Fleet of BLT

Chemical Tankers

Owned Built DWT Type(1) Owned Built DWT Type(1) Bareboat Chartered Built DWT Type(1)

MT Hartati 2004 14,312 IMO II/III SUS MT CB New Orleans 2003 32,000 IMO II/III SUS MT Pramoni(2) 2008 19,990 IMO II/III SUS

MT Harsanadi 2005 14,271 IMO II/III SUS MT CB New York 2002 27,000 IMO II/III SUS MT Puspawati(2) 2008 19,900 IMO II/III SUS

MT Indradi 1993 13,944 IMO II/III SUS MT CB Savannah 2002 25,000 IMO II/III SUS MT Purwati(2) 2007 19,900 IMO II/III SUS

MT Nogogini 1996 11,639 IMO II/III SUS MT CB Ulsan 2004 19,500 IMO II/III SUS MT Pertiwi(3) 2006 19,970 IMO II/III SUSg g

MT Nolowati 1998 11,636 IMO II/III SUS MT CB Yokohama 2003 19,500 IMO II/III SUS MT Prita Dewi(3) 2006 19,998 IMO II/III SUS

MT Wulansari 1992 11,055 IMO II/III SUS MT CB Kobe 2002 19,500 IMO II/III SUS MT Pujawati(3) 2006 19,900 IMO II/III SUS

MT Ratih 1996 10,329 IMO II/III SUS MT CB Gibraltar 2001 19,500 IMO II/III SUS MT Gagarmayang(2) 2004 40,354 IMO II/IIIMT Rasawulan 1996 10,332 IMO II/III SUS MT CB Shanghai 2000 19,500 IMO II/III SUS MT Purbasari(2) 2008 19,900 IMO II/III SUS

MT Gerbera 2004 8,738 IMO II/III SUS MT CB Houston 2003 16,400 IMO II/III SUS

MT Fatmarini 2004 8,578 IMO II/III SUS MT Anjasmoro 1996 32,696 IMO III Time Chartered Built DWT Type(1)

MT Frabandari 2004 8,575 IMO II/III SUS MT Anggraini 1995 31,225 IMO III MT CB Lindy Alice(4) 2008 32,000 IMO II/III SUSMT Frabandari 2004 8,575 IMO II/III SUS MT Anggraini 1995 31,225 IMO III MT CB Lindy Alice 2008 32,000 IMO II/III SUS

MT Freesia 2003 8,521 IMO II/III SUS MT Yanaseni 1992 9,202 IMO II/III MT CB Minneapolis(4) 2007 32,000 IMO II/III SUS

MT Fatmawati 1996 7,527 IMO II/III SUS MT Ulupi 1999 6,690 IMO II/III MT CB Westport(4) 2006 32,000 IMO II/III SUS

MT Celosia 1997 7,477 IMO II/III SUS MT Erowati 1999 6,688 IMO II/III MT CB Kings Point(4) 2008 19,500 IMO II/III SUS

MT Tirtasari 1997 5,878 IMO II/III SUS MT Jembawati 1999 6,685 IMO III MT CB Singapore(4) 2007 19,500 IMO II/III SUS

MT Bauhinia 1997 5,851 IMO II/III SUS MT Dragonaria 1998 6,555 IMO II/III MT CB Tortola(4) 2007 19,500 IMO II/III SUS

MT Eustoma 1994 4,990 IMO II/III SUS MT Kunti 1992 3,984 IMO III MT CB Jakarta(4) 2009 19,500 IMO II/III SUS

MT Rengganis 1993 3 667 IMO II/III SUS MT Pramesti 2009 19 990IMO II/III SUS MT Golden Ambrosia(6) 2008 13 000 IMO II/IIIMT Rengganis 1993 3,667 IMO II/III SUS MT Pramesti 2009 19,990IMO II/III SUS MT Golden Ambrosia(6) 2008 13,000 IMO II/III

MT Larasati 1991 3,665 IMO II/III SUS MT Hyacinth 2009 12,500IMO II/III SUS MT Bestari(5) 2003 6,689 IMO II/III SUS

MT Mustokoweni 1991 3,199 IMO II/III SUS MT Bidadari(5) 2003 6,678 IMO II/III SUS

MT Setyawati 1994 3,189 IMO II/III SUS MT Royal Flos(7) 2008 19,600 IMO II/III

MT Cendanawati 1997 3,159 IMO II/III SUS

MT CB Barcelona 2004 32,300 IMO II/III SUS

MT CB Virgin Gorda 2004 32,000 IMO II/III SUS

MT CB Hong Kong 2003 32,000 IMO II/III SUS

Note :1) "SUS" refers cargo tanks made of stainles stell2) 12 years bareboat charters

1616

3) 12 years bareboat charter4) 10 years time charter5) 6 years time charter6) 5 years time charter7) 3 years time charter

Orderbook in High Growth Segments

Orderbook well-positioned for economic recovery in 2010/2011 with minimal capital outlays for the next 12 months

Market value of newbuilds exceeds the contract cost with 10-15% of the contract value already paid

Chemical Tankers Orderbook Gas Carriers OrderbookChemical Tankers Orderbook Gas Carriers Orderbook

37.9

45678

80100120140160

No. of S('0

00 D

WT

)

155

3

4

5

100

150

200

No. o

'000

CB

M)

29.352

01234

020406080

2009 2010 2011

Ships

Ton

nage

(

Tonnage ('000 DWT) Number of Ships

120 5

0

1

2

0

50

100

2009 2010 2011 2012

of ships

Cap

acity

('

Capacity (CBM) Number of ships

Chemical/Gas Fleet GrowthCommitted Capital ExpendituresTotal US$424.5 million remaining Capex

Tonnage ( 000 DWT) Number of Ships Capacity (CBM) Number of ships

211.01000

1200

)

250

511 4

468.2

172.0400

600

800

1000

WT

/CB

M (

'000

)

147.5

198.1

50

100

150

200

1717

511.4

210.30

200

Chemical tankers (dwt) Gas tankers (cbm)

DW

BLT Capacity Chembulk capacity New capacity

78.9

0

50

2010e 2011e 2012e

82 % of total outstanding capex falls due from Q3 2010 onwards

Industry Dynamics

Section 2

Summary of chemical tanker market outlookSummary of chemical tanker market outlook

Summary A play on improved GDP and IP growth

Chemical tanker demand is highly correlated with GDP and industrial production growth as the products transported are used in industries such as housing and automotive

We believe a revival in world economic activity will generate strong demand for chemical tankers both through restocking of run-down inventories and higher industrial production

In combination with moderate fleet growth, we believe an investment in the chemical tanker space is a great play on the expected economic recovery

Demand Higher GDP growth expectedDemand g e G g o t e pected

IMF forecast world GDP to rebound from -0.9% to +3.1% in 2010 – Consensus forecasts expect even stronger growth at 3.3%

Chemical tanker demand growth typically 2x GDP growth

Longer distances as more Middle Eastern production comes on stream

New refinery capacity in the Middle East to expand trading distances as it has a competitive feedstock advantage to basic chemicals production in other regions

Biofuels and vegetable oils

High oil prices and stricter environmental regulations to reduce emissions should increase biodiesel and ethanol demand

Supply Orderbook (IMO I/II) currently at 25% to be delivered over the next three years although cancellationsSupply Orderbook (IMO I/II) currently at 25% to be delivered over the next three years, although cancellations and delays likely to ease the impact

Almost 10% of the core chemical fleet (ex. epoxy) are close to scrapping age

New IMO regulations preventing product tankers from transporting vegetable oils have made swing capacity from product tankers a lesser problem. At the same time, 20% of the product tanker fleet is single-hulled and could be phased out by 2010

f ( ) 6% 8% 1 6% 2010 12

19

We estimate core chemical fleet (ex. epoxy) to expand by 4.6%, 4.8% and 1.6% in 2010-12

Strict vetting rules and increasing implementation on age limits (max. 15 years at some ports) and low port productivity reduce real fleet supply

A great play on economic recoveryA great play on economic recovery

The chemical tanker market is highly

l t d ith l b l5

6

200

250

Correlation between GDP growth and chemical index

correlated with global GDP growth

Further, chemicals are early cyclical and the demand for chemicals and plastics has 1

0

1

2

3

4

50

100

150

200

GDP y/y %

Chem.Index

and plastics has outpaced GDP over the last two decades

Chemical tanker demand is typically 2x world GDP growth

‐2

‐1

0

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Chem.Index. 1990=100 Global GDP, y/y change %

Note: From Jan 1 2008, Chem Index replaced with ECHEM Index. Chem Index, pis not representative for chemical tanker market in this period because it neglects the fact that most vessels sailed without cargo on back haul trades

300

350

Chemicals demand growth vs GDP growth

150

200

250

300

Global recession

Asian crisis

U.S. recession

20

100

1985 1988 1991 1994 1997 2000 2003 2006 2009e 2012e

Global GDP index Basic Chemicals & Plastics Index

Source: IMF, CMAI, RS Platou Markets

Industrial production set to increaseIndustrial production set to increase

Global industrial production has taken a hit i th t

25 10 %65

China Money Supply vs. Industrial ProductionUS ISM Manufacturing Index vs. Industrial Production

hit in the past year (along with chemical tanker rates)

In China, stimulus packages have given rapid results and 5

10

15

20

y/y %

‐10 %

‐5 %

0 %

5 %

40

45

50

55

60

production y/y %

change

ISM Index

rapid results and industrial production is expected to see previous high growth rate

In the US, the ISM

0

5

2003 2005 2007 2009

China money supply

China industrial production (2 month moving average)

‐15 %

‐10 %

30

35

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Ind.

ISM Manufacturing, U.S Industrial production, U.S, y/y %

manufacturing index and new orders data predicts a major pickup for industrial production

ISM new d /i t i ti

2,0

2,5

ISM New Orders/Inventories Ratio Car Sales in China, EU and the USA

orders/inventories ratio suggest restocking needs

0,5

1,0

1,5

21Source: Reuters Ecowin, RS Platou Markets

0,0

1959

1961

1963

1965

1967

1969

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

New regulations have tightened the market balanceNew regulations have tightened the market balance

New IMO regulations have tightened the

it i f th

Pre 2007

Chemical tanker domain

criteria for the transportation of certain materials

Product tankers are for instance no longer qualified for the

Organics Chemicals

Clean products

Unreg cargos

Veg oilsInorganics Chemicals

Dirty products

Crude oil

qualified for the transportation of vegetable oils

The regulations improves the market conditions for chemical

From 2007

Oil product tanker domain

tanker owners and made swing capacity (product tankers) a lesser problem

From 2007

Chemical tanker domain

Organics Chemicals

Clean products

Unreg cargos

Veg oilsInorganics Chemicals

Dirty products

Crude oil

22Source: RS Platou Markets

Oil product tanker domain

Swing tonnage no longer an issueSwing tonnage no longer an issue

Before the new IMO regulations, there was a t l ti

29 000

Correlation between chemical & product tanker rates

strong correlation between product tanker earnings and chemical tanker earnings

After the regulation change however the

Before new IMO regulations:R² = 0,857

21 000

23 000

25 000

27 000

7 m

t, $/day

change however, the presence of clean product tankers in the chemical market have decreased, effectively decoupling the rate development between

After new IMO regulations:R² = 0,1189

15 000

17 000

19 000

21 000

CPP 37

development between the two markets

This effectively implies that the expected upturn in demand for chemicals could be even sharper

120 140 160 180 200 220

Chem. Index. 1990 = 100

2003‐2006 2007‐2009

pthan following previous downturns

23Source: Drewry, RS Platou Markets

Favorable fleet developmentFavorable fleet development

Almost 10% of the core fleet (IMO I & IMO II vessels ex epoxy

Net fleet addition (core fleet)

2,0 Assumptions:80% of vessels above 30y old scrapped

vessels, ex-epoxy coated) are close to scrapping age

With reasonable assumptions on scrapping, delays and 0,0

0,5

1,0

1,5

Million dwt

y pp10% delay overhang into following year

10% slippage in 2010/11

slippage, core fleet expected to grow by 4.6%, 4.8% and 1.6% in 2010-12

Following the period of low net fleet addition in

‐1,0

‐0,5

14 %

16 %

18 %

20 %

th %

Assumptions:80% of vessels above 30y old scrapped

10% delay overhang into the following year10% slippagein 2010/11

low net fleet addition in 2001-02, chemical rates soared

With current consensus forecast on world GDP growth of around 3 – 4% i 2010/11 d t ki

Delivered Removals Slippage Overhang Net addition

2 %

4 %

6 %

8 %

10 %

12 %

14 %

Annual fleet growt

in 2010/11, and taking into account the multiplier effect chemical product demand should outstrip net fleet growth

0 %

IMO I/ IMO II incl. epoxy Core fleet

24Source: Drewry, RS Platou Markets

Growth in emerging economies will increase tonGrowth in emerging economies will increase ton--milemile

Middle East is expected to increasingly export b i h i l f

Chemical trade routes and expected increase in refinery capacity

0

Rotterdam

Seoul

basic chemicals for processing in the west (increased ton-mile)

However, Far East represents the main source of demand

EU: 6 % Asia

HoustonTokyo

Shanghai

source of demand growth for processed chemicals, i.e. ton-mile should increase for this reason as well

N.A.0 %

6 % Asia Pacific 41%

Middle East;Cheap feedstock &

Singapore

Sao Paulo

Mumbai

S.A.6 % Cheap feedstock &

new basic capacity.

Buenos Aires

6 %

MEG India: 50%

25

Buenos Aires

Proposed transaction

Section 3

Transaction overviewTransaction overview

BLT intends to make an all share voluntary offer for 100% of the outstanding shares in Camillo Eitzen & Co ASA (“CECO”)

CECO shareholders BLT shareholders New investors

Co ASA ( CECO )

Share based offer – CECO’s shareholders to receive considerations in BLT corresponding to NOK 25 per CECO share, based on the BLT share price at the end of the offer period, however, at a maximum ratio of 49 13 BLT shares per CECO share New shares USD 200mof 49.13 BLT shares per CECO share

Consideration in the form of ”MEBs” – Mandatory Exchangeable Bonds which are convertible into ordinary shares in BLT

BLT aims to list the MEBs on the Oslo Stock

BLT

USD 75m – USD 80m*

New shares

Exchange with the aim of enhancing liquidity to the shareholders

BLT furthermore plans for secondary listing in Oslo after completion of the potential transaction

C CO’ %

CECO

52.1%USD 52m*

ECHEM shareholders

47.9%

CECO’s main shareholders controlling 76%, BoD in CECO and Nordea, the agent bank for the bank syndicates in CECO & ECHEM, support the transaction

ECHEMUSD 48m*

* Actual size of equity infusions to be confirmed

27

Actual size of equity infusions to be confirmed.

CamilloCamillo EitzenEitzen & Co ASA (CECO) & Co ASA (CECO) -- OverviewOverview

A di ifi d d f ll i t t d hi i ith ti iti ithi th h i l b lkA diversified and fully integrated shipping group with activities within the chemical, gas, bulk, and maritime services segments

94 vessels*1.46 million DWT


Eitzen Chemical Eitzen Gas Maritime servicesEitzen Bulk

52.1% 100% 100% 72%

Listed on OSE63 d/ t ll d

28 owned/controlled vessels

Listed on OSEGl b l l d i th

Operational fleet of 40 60 vessels63 owned/controlled

vessels9 above 30,000 dwt54 below 30,000 dwt

1,063,800 DWTAverage age 6 8

vessels164,600 CBMAverage age 16.9 years

Global leader in the highly fragmented ship supply industryShip managementInsurance broking

40-60 vessels2 vessels financially controlled, 2 newbuilds + 15 newbuilds on TC229,000 dwt (vessels


+ newbuilds)Average age 1.5 years (ex newbuilds)

28*Owned and controlled vessels, ex newbuilds and Eitzen Bulk operational fleet of 40-60 vessels

Transaction rationaleTransaction rationale

Creating a leading international shipping group

The new entity will operate a fleet of 146+10 chemical tankers, making it by far the largest operator in the world in terms of number of vessels.

CECO’s gas operations complement those of BLT.

The drybulk & maritime services segment will remain core business areas within the new group.

Complementary geographical footprint

BLT’s main presence is in Asia, Chembulk North and South America, while Camillo Eitzen & Eitzen Chemical d i tl t i E Th bi d tit ill l h lid b d th ldpredominantly operates in Europe. The combined entity will also have a solid base around the world.

Synergies

Synergy potential on both revenue generation & cost reduction.

Cabotage opportunities: Long-term contracts with solid counterparts at solid returns.

Attractive consolidation opportunity

Difficult market situation and high leverage has put the Eitzen companies in a distressed situation. However, the current market values of the companies do not reflect the underlying net asset values.

Amended debt moratorium and new covenants enable the Eitzen companies to withstand a prolonged period of challenging market conditionschallenging market conditions.

The combined entity will be in excellent position to benefit from expected rebound of world economy.

EMS & Bulk divisions are valuable add-ons

Steady cash flow, less capital intensive.

29

Creating a Creating a chemical giantchemical giant

BLT & Eitzen currently ranks as number 4 & 3 in

Largest chemical tanker operators – sorted by # of vessels(#) dwt

terms of vessels under management.

In terms of DWT however, BLT and Eitzen rank as number 5 & 3.

9

2500

3000

3500

120

140

160

180

The potential acquisition of CECO will put BLT at the very top of the competitive landscape, with the largest number of managed h i l l

147

23

110

913

1500

2000

60

80

100

120

chemical vessels.

In terms of DWT, BLT & CECO will be the same size as the current largest operator Stolt Nielsen

95 88 84

6354

0

500

1000

0

20

40

L i S l Odfj ll i L k i

Includes 21 chemical tankers which Eitzen has under pool management

BLT + Eitzen Stolt Odfjell Eitzen BLT Tokyo Marine

Operated Fleet Orderbook dwt

30Source: Drewry, Eitzen Chemical

Includes 21 chemical tankers which Eitzen has under pool management

Research analyst comments on announcementResearch analyst comments on announcement

The potential transaction is expected to generate potential synergies both on revenue enhancement and reduction of operating expenses

Due to increased size and a larger geographical footprint, BLT and the Eitzen companies are positioned to leverage on a more completepositioned to leverage on a more complete logistics network, improving fleet utilization. Also potential for re-deployment of vessels into BLT’s domestic market

BLT’s vessel operating expenses are lower across the different segments, representing potential cost savings through economies of scale, better utilization of internal resources and i l ti b t ti th h t thimplementing best practices throughout the organizations

31

Combined financials

CECO (USDm) 2007 2008 1H09

Revenues 1 236 1 581 546

BLT (USDm) 2007 2008 1H09

Revenues 295 491 230Revenues 1 236 1 581 546

EBITDA adj** 200 224 81

Equity & minorities 843 365 331

Assets 2 562 2 336 2 231

Net debt 1 171 1 326 1 383

Revenues 295 491 230

EBITDA adj** 171 311 134

Equity & minorities 575 669 669

Assets 2 413 2 406 2 508

Net debt 1 544 1 433 1 472Net debt 1 171 1 326 1 383 Net debt 1 544 1 433 1 472

Combined* (USDm) 2007 2008 1H09

Revenues 1 531 2 072 776

EBITDA adj** 371 535 215

Equity & minorities 1 419 1 035 1 000

Assets 4 975 4 742 4 739

Net debt 2 716 2 759 2 855

* Combined figures do not include planned equity issue of USD 200m in BLT or USD 57m rights issue completed in Q3 2009** EBITDA adjusted for asset sales

32

BLT an attractive bet in the chemical marketBLT an attractive bet in the chemical market

BLT and ECHEM’s chemical fleets are considerably younger than closest peers

14 3

Due to leverage, BLT and ECHEM have significantly higher upside when asset values increase

10% increase in asset

7,7

14,313,8

74 %

115 %

10% increase in asset values20% increase in asset values

,6,7

37 %

57 %

16 % 17 %

32 % 33 %

The chemical fleet of both BLT and Eitzen Chemical

BLT Eitzen Chemical

Odf jell Stolt-Nielsen BLT Eitzen Chemical

Odf jell Stolt-Nielsen

Both BLT and Eitzen Chemical are well positioned are considerably younger than Odfjell’s and Stolt-Nielsen’s

A younger fleet deserves a higher EV/EBITDA multiple, as the current EBITDA level can be maintained for a prolonged period without need for reinvestments

towards a rebound in asset values

In a scenario where asset values increase 20% on average, Net Asset value in BLT increases 74%, compared to 32% for Odfjell and 33% for Stolt-Nielsen

33

reinvestments

Downside protection through debt restructuringDownside protection through debt restructuring

One of BLT’s conditions for the Indicative Offer is an agreement with CECO and ECHEM’ b k di t t d d t th i ’ l i l di iECHEM’s bank syndicate to amended terms the companies’ loans, including waiver of covenants and a prolonged moratorium period

All debt to be on a non-recourse basis; value at risk for BLT is thus limited to the initial equity injection into CECO, estimated at USD 75-80m

ECHEM:

The company recently announced an agreement with its banks and bondholders for a moratorium period until November 2012moratorium period until November 2012

BLT’s proposal includes a prolonged moratorium period with no fixed debt repayments (cash sweep) and improved loan-to-value covenants

CECO:

BLT proposes extension of the maturity for the facilities to coincide with a prolonged moratorium period, with waiver/reduction of financial covenants

No fixed repayments for the duration of the facilities

34

No fixed repayments for the duration of the facilities

BLT BLT –– Continued strong growth storyContinued strong growth story

Consistent EBITDA growth

EBITDA growing every year since 1991, except in 2002

Explosive CAGR growth in EBITDA of 48% over the period

Historical EBITDA, USDm

1.50

2.00

2.50

atio

Net Debt to Equity

from 2003 to 2008

Well positioned in the high growth intra-Asia chemical tanker space

Indonesia is a large exporter of palm oil, which is carried on chemical tankers to cons mer

-

0.50

1.00

1Q08 2Q08 3Q08 4Q08 1Q09 2Q09

Ra

chemical tankers to consumer end-markets in China and India

Positive Indonesian domestic shipping growth story

Cabotage regulation to benefit Indonesian ship owners of which

1Q08 2Q08 3Q08 4Q08 1Q09 2Q09

BLT Stolt Odfjell Iino

10 00

12.00 EV/EBITDA

Indonesian ship-owners, of which BLT is the largest

BLT has a strong longstanding relationship with Indonesian government-owned oil and gas company Pertamina since 1981

Historical Profitability (EBITDA/Assets)

4 00

6.00

8.00

10.00

BLT has a far superior EBITDA growth profile, compared to main peers Stolt-Nielsen and Odfjell

BLT also has superior profitability

-

2.00

4.00

1Q08 2Q08 3Q08 4Q08 1Q09 2Q09

35

in terms of EBITDA/Assets

Expects to improve Eitzen Chemical’s performance after the takeover

* BLT’s EBITDA/asset ratio decreased sharply from 2006 to 2007 due to significant vessel deliveries during the year, increasing the asset base but not providing a full year of EBITDA contribution. Asset profitability recovered back to 2006 levels in 2008 as the new vessels contributed on a full year basis. SNI adjusted for Stolt Offshore in 2003 due to abnormal low performance

BLT Stolt Odfjell Iino

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2009.10.13 blt company presentation...

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