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Capital Markets Shipping Industry

Athens Ledra Hotel 13 January 2014

Agenda • Global top 10 exchanges – overview of activity • US IPO markets – overview of activity

• A brief dive into the shipping industry – recent IPO’s, listing analysis, domicile

Capital Markets • Shipping Industry PwC

January 13, 2014 2

Global capital markets generally performed well 2013 • Global earnings and outlook continue to improve post-financial crisis, with developed economies gradually strengthening and no major economic crises looming as we move into 2014 • In 2013, as the US markets had a strong recovery with indices continuing to break record highs, the EU had slightly negative GDP, but is expected to become positive in 2014, Japan’s “Abenomics” delivered 2% growth, and while Chinese GDP has moderated over the past several years it remained at 7.7% growth in 2013 • The Global economy is starting to gain traction as companies have cuts costs over the last several years, repaired balance sheets, and are poised for expansion in 2014. However, global macro influences that could hamper equity markets growth include rising interest rates, foreign market instability, and Middle East instability • Specifically in the US – ECM: both volume and value of 2013 IPO’s surpassed 2012 DCM: debt markets saw record levels of high-yield issuance again in 2013, approaching 2012 record highs

Capital Markets • Shipping Industry PwC

January 13, 2014 3

NYSE leads the world in listed market cap The US continues to dominate global capital markets by market capitalization, with the NYSE and NASDAQ taking the top 2 spots with over 4,700 listings 14.000.000

2281 primary equity listings Utilities Telecommunication Services

12.000.000

Materials Information Technology

10.000.000

Industrials

8.000.000

Healthcare

2506

Financials

6.000.000 1556

1985

Energy

2570 1146

4.000.000

Consumer Staples Consumer Discretionary

2.000.000

3645

1792

The Toronto Stock Exchange

Australian Securities Exchange

891

591

0 NYSE

NASDAQ

Hong Kong London Stock Stock Exchange Exchange

Tokyo Stock Exchange

Euronext (Europe)

Shanghai Stock Exchange

Deutsche Boerse AG

Numbers above bar charts are total number of primary equity listings per exchange *London Stock Exchange includes (LSE and AIM), Toronto Stock Exchange includes TSX and TSX Venture, and Euronext includes Paris, Brussels, Amsterdam, and Lisbon USD Millions Source: S&P CapitalIQ

Capital Markets • Shipping Industry PwC

January 13, 2014 4

NYSE dominates debt and M&A activity Number of Transactions 9000 8000 7000 6000 5000

M&A Transactions

4000 3000

Debt Transactions

2000

Equity Transactions

1000 0 NYSE

NASDAQ Hong Kong London Tokyo Stock Euronext The Toronto Australian Stock Stock Exchange (Europe) Stock Securities Exchange Exchange Exchange Exchange

Shanghai Deutsche Stock Boerse AG Exchange

Total Deal Value $2.000.000 $1.500.000 $1.000.000

M&A Transactions

$500.000

Debt Transactions Equity Transactions

$NYSE

NASDAQ Hong Kong London Tokyo Euronext Stock Stock Stock (Europe) Exchange Exchange Exchange

The Australian Shanghai Deutsche Toronto Securities Stock Boerse AG Stock Exchange Exchange Exchange

USD Millions Source: Capital IQ

Capital Markets • Shipping Industry PwC

January 13, 2014 5

US leads the world in IPO’s, Shanghai declines Number of IPOs 140 120 100 80

2012

60

2013

40 20 0 NYSE

NASDAQ

Hong Kong London Stock Tokyo Stock Stock Exchange Exchange Exchange

Euronext (Europe)

The Toronto Stock Exchange

Australian Securities Exchange

Shanghai Stock Exchange

Deutsche Boerse AG

Proceeds raised from IPOs $45.000 $40.000 $35.000 $30.000 $25.000 $20.000 $15.000 $10.000 $5.000 $-

2012 2013

NYSE

NASDAQ

Hong Kong Stock Exchange

London Stock Tokyo Stock Exchange Exchange

Euronext (Europe)

The Toronto Stock Exchange

Australian Securities Exchange

Shanghai Stock Exchange

Deutsche Boerse AG

USD Millions Source: Capital IQ

Capital Markets • Shipping Industry PwC

January 13, 2014 6

PwC IPO watch – The US market has recently averaged 43 IPOs and $10.9 billion of proceeds per quarter Volume of IPOs by quarter

2010 - 168 IPOs

100

2011 - 134 IPOs

2013 - 238 IPOs 78

80

64

63 52

60 41 40

2012 - 146 IPOs

29

34

45

33 21

33

28

38

30

63

34

20 0 2010 Q1 2010 Q2 2010 Q3 2010 Q4 2011 Q1 2011 Q2 2011 Q3 2011 Q4 2012 Q1 2012 Q2 2012 Q3 2012 Q4 2013 Q1 2013 Q2 2013 Q3 2013 Q4 Offering value of IPOs by quarter ($ bn) $30,0 $24,8

$24.1

$25,0

$22,2

$20,0 $15,0

$13,2

$13,0 $12,8

$10,0 $5,0

$4,2

$6,7

$6,5

$5,2 $4,8

$3,2

$8,2

$7,8

$11,8

$5,8

$2010 Q1 2010 Q2 2010 Q3 2010 Q4 2011 Q1 2011 Q2 2011 Q3 2011 Q4 2012 Q1 2012 Q2 2012 Q3 2012 Q4 2013 Q1 2013 Q2 2013 Q3 2013 Q4 Note: Does not include IPOs listed on foreign exchanges, closed-end funds or trusts Source: SEC filings

Capital Markets • Shipping Industry PwC

January 13, 2014 7

IPO’s raised $56.9 billion in 2013 and $42.9 billion in 2012 Consumer $3,2 7,5%

REIT $1,5 3,4%

Financial $7,1 16,6%

Consumer $10.3 18.1%

Technology $9.1 16.1%

Industrial $3,7 8,7%

Energy $5,8 13,5%

REIT $5.6 9.8%

2012

Services $0,8 1,8% Healthcare $0,8 1,9%

Technology $20,0 46,6%

2013

Energy $10.9 19.3%

Industrial $6.6 11.5%

Healthcare $8.7 15.2%

Financial $5.7 10%

USD Millions Source: Capital IQ

Capital Markets • Shipping Industry PwC

January 13, 2014 8

US Market volatility measure remains low -

• Since Jan 2011, of the 518 IPO’s that took place, 68% of all IPOs occurred when the VIX was trading between 15 and 20 and 90% of all IPOs occurred when the VIX was trading below 20. These are periods of relatively low volatility, which generally promotes investor confidence.

50

100

150

200

250

300

350

0-15 15-20 20-25 25-30 30-35

•2013 saw low levels of volatility, as reflected by the VIX index amid a background of record equity market performance, partly driven by investors chasing yield.

35 up # of IPOs and VIX

Monthly Number of US IPOs and VIX 40

50

35

45 40 35

25

30

20

25

15

20 15

10

10

5

5

-

0 Jan-11 Mar-11 May-11 Jul-11

Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12

USD Millions Source: Capital IQ and SEC filings

Capital Markets • Shipping Industry PwC

IPOs

Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13

Sep-13 Nov-13

VIX

January 13, 2014 9

VIX

# of IPOs

30

Recent shipping IPO’s are trading well below issue price Exchange

Date Priced

Proceeds

1 Day Return

IPO to Dec 31, 2013 Return

TEV/LTM Revenue

TEV/LTM EBITDA

OB

10/21/2013

$127

-2%

33%

0.4x

14.2x

SEHK

8/14/2013

$7

10%

-5%

0.4x

7.1x

NYSE

7/31/2013

$140

-4%

11%

10.2x

43.3x

OTCNO

6/27/2013

$250

19%

27%

N/A

N/A

JKSE

2/11/2013

$9

50%

30%

2.2x

7.9x

ICSE

11/18/2012

$91

1%

16%

0.8x

8.7x

JKSE

9/28/2012

$6

22%

-5%

2.0x

4.6x

SHSE

8/27/2012

$175

7%

-25%

3.5x

13.4x

WSE

7/25/2012

$8

2%

-3%

2.2x

5.6x

USD Millions Source: Capital IQ

Capital Markets • Shipping Industry PwC

January 13, 2014 10

US, Scandinavia and Tokyo have the most shipping company listings By Number of Listed Shipping Companies Number of Shipping Companies Listed NYSE

27

Total Market Cap of Shipping Companies (USD Millions)

By Total Market Cap of Shipping Companies

$89,952

NASDAQ

18

$7,155

Oslo Bors

16

$7,639

OMX Nordic Exchange

16

$49,114

Tokyo Stock Exchange

16

$14,497

Number of Shipping Companies Listed

Total Market Cap of Shipping Companies (USD Millions)

NYSE

27

$89,952

OMX Nordic Exchange

16

$49,114

Hong Kong Stock Exchange

13

$21,785

Swiss Exchange

1

$15,422

Tokyo Stock Exchange

16

$14,497

Source: Capital IQ

Capital Markets • Shipping Industry PwC

January 13, 2014 11

US, Hong Kong and Shanghai markets show higher valuations TEV/LTM Revenue

TEV/LTM EBITDA

Exchange

Overall Industrial Sector

Shipping Companies

Overall Industrial Sector

Shipping Companies

NYSE

2.3X

6.4x

12.0x

21.9x

NASDAQ

2.5x

6.4x

13.8x

19.5x

Hong Kong

4.6x

2.0x

16.3x

42.4x

London

3.5x

3.4x

13.8x

9.8x

Tokyo

0.7x

1.1x

8.3x

9.2x

Euronext (Europe)

1.6x

4.5x

9.9x

11.4x

Toronto

4.4x

1.4x

10.8x

6.4x

Australia

3.3x

1.9x

9.1x

6.6x

Shanghai

4.2x

6.8x

26.2x

24.1x

Deutsche Boerse

1.1x

3.2x

11.7x

9.1x

Multiples are an arithmetic mean (not market cap weighted) for shipping companies listed on the exchange TEV – Total Enterprise Value, (Market Capitalization plus net debt); LTM – Last Twelve Months Source: Capital IQ

Capital Markets • Shipping Industry PwC

January 13, 2014 12

Let’s all domicile in the Marshall Islands!!

Tax Domicile

Shipping Companies Incorporated

Total Market Cap of Shipping Companies (USD Million)

Headquarters

Exchange

Greece (20), US (4), Bermuda (4), NYSE (18), NASDAQ (13), UK (2), Canada (1), Monaco (1), OTC, Pink Sheets (2), Hong Kong (1), Ireland (1), London (1) Marshall Islands (1) Hong Kong (4), Oslo Bors Hong Kong (6), Bermuda (5), (3), Singapore (1), NYSE Greece (1), UK(1), Monaco (1) (4) and NASDAQ(2)

Marshall Islands

34

$24,601

Bermuda

14

$13,229

China (incl Hong Kong)

13

$18,913

China (including Hong Kong) (13)

Shanghai (6), Hong Kong (6),Shenzhen (1)

United States

11

$70,235

US (8), Viet Nam (1), Hong Kong (1), Monaco (1)

NYSE (5), NASDAQ (2), OTC, Pink Sheets (4)

Norway

10

$1,691

Norway (15)

Oslo Bors (9), Norway OTC (1)

Singapore

9

$2,773

Singapore (9)

Singapore (8), London (1)

Malaysia

9

$8,396

Malaysia (9)

Bursa Malaysia (9)

India

8

$1178

India (8)

Mumbai (8)

Indonesia

4

$237

Indonesia (4)

Jakarta (4)

Japan

2

$5,128

Japan (8)

Tokyo (2)

Source: CapitalIQ; data reflected above was for a sample size of 177 of the 264 total shipping companies identified

Capital Markets • Shipping Industry PwC

January 13, 2014 13

Thank you.

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