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Pioneer Marine’s Handysize Fleet Continues to Grow

Rob Almeida
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December 9, 2014

Since establishing his company in September 2013 and subsequently listing on the Norwegian OTC in March, Pankaj Khanna has positioned his dry bulk shipping firm Pioneer Marine Inc. for rapid growth.

Pioneer Marine sees opportunity for consolidation in the handysize sector within dry bulk shipping due to “advantageous supply dynamics with an old fleet and limited order book.” In March Pioneer Marine acquired 13 bulk carriers and the next month ordered an additional 14 Green Dolphin 38,800 deadweight ton handysize bulk carriers from Chinese yards for $303 million.

In his company’s 3rd quarter earnings statement today, Khanna acknowledges financing has been gained from ABN AMRO and other lenders for an additional 12 newbuilds.

“We are pleased with the arrangement of the debt facility for our Green Dolphin newbuildings and appreciate the support provided by our banks as we continue to grow.

“Pioneer has now built a Handysize focused operating platform and is among the top 15 Handysize owners. We are positioned to consolidate this fragmented sector further with like?minded operators and financial sponsor backed companies. The benefits of scale are most evident for smaller vessels as operational synergies, access to cargo and capital is available for the larger, well capitalized companies with modern fleets.

“The return of volatility in the drybulk freight market for the larger vessels signifies a supply?demand equation that appears to be coming back into balance after four years of over?supply. The market recovery has been delayed due to the 7% decline seen in Chinese coal imports (Jan?Sep 2014 versus prior period) precipitated by a 24% surge in hydro?electric production in the same period.

However, forecasts for 2015 suggest that Chinese coal imports may rebound as hydro?electric production returns to more normal levels. The demand for minor bulk has been negatively impacted during 2014 by the ban on Indonesian exports of unprocessed mineral, however, we are now seeing long?haul trades of bauxite from West Africa and elsewhere to China, as stocks built in anticipation of the ban are rundown. Overall drybulk demand forecasts for 2015 are still in the 5?7% range based onvolume alone and not accounting for the tonne?mile effect for example from rising Brazilian iron ore exports. We remain cautiously optimistic about the prospects for 2015.”

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