Good morning and Welcome to this DOF presentation. I have with me Hilde Drønen, our CFO, and also our Chair of the Board, Mr. Svein Harald Øygard We have a presentation today, and then we will open for questions at the end of the presentation. The questions have to be in writing, so we kindly ask you to do that, and we will be delighted to answer any questions you might have at the end of the session. First, I'll leave the floor to our Chairman, Mr. Øygard. Please, Svein Harald Øygard
Thank you. So I will just very briefly go through the transaction rationale based on this one page. So first, of course, DOF is a major supplier, yeah, major supplier of integrated offshore services. That includes project work, it includes vessel capacity, high-quality vessels into the key categories of the booming subsea market, 43 vessels in total. And over the last years, DOF has been very, very successful in building project revenues and project earnings on top of the vessel capacities. Maersk Supply Service is a global asset provider with a high-quality and modern fleet. They have 8 construction vessels in the scope of this transaction, 13 anchor handlers, and my personal favorite, 1 cable layer. That is important, not least into the new booming offshore wind market. They have vessels of high quality, fully invested, modest CapEx, as they have been well maintained over many years.
It's modern A verage life length of the current vessels is 8.5 years compared to 11.7 for the DOF fleet and 12 years for the typical offshore construction and supply vessel fleet in the industry. So it's an excellent fleet that we will have access at the day of closing and that we can use from day one into this booming market. That has a significant value compared to new build, both because we get the fleet earlier, because we can earn the project earnings, and of course, because we get it at what we believe is a very, very attractive price. What will this deliver? Well, it will basically strengthen the new company's position as a major offshore services provider with the world's largest fleet of construction support vessels and of high-end anchor handlers. A few comments on the last part.
We have currently 12 anchor handlers in the DOF fleet. 11 of those are sold out till the end of 2025. So we are basically sold out, and all our vessels are on longer-term contracts, which is also based on the strategy. And even more, to be simplistic, these are not tugboats. These are highly sophisticated platforms for subsea work. The DOF anchor handler would typically have a configuration with ROVs that can do subsea work. Some also have cranes. So basically, when they are employed in DOF, they do more than rig movements.
They also do integration work. They do mooring. They do, yeah, basically installation of FPSOs, and they do decommissioning work as examples. And Mons will revert to that. So with that, I'll give the word to Mons and Hilde, and I will get back at the end when you comment on the ownership structure, management, and governance. Thank you.
Thank you Svein Harald Øygard So we will move to the next page here. As you know, I've been in the industry for a while, and I started as a young broker back in the 1990s. Of course, I followed the Maersk Supply Service for 30 years. Of course, know what they can. Of course, they are always admired, their fleet, their organization, and their offshore people. So I think this is a perfect match with DOF going forward, and I really look forward to this. This is on the structure. So what will happen here is that DOF will buy 100% of the shares in Maersk Supply Service from Maersk Supply Service Holding, a daughter company of A.P. Møller Holding.
Holding A/S will become a major owner in DOF, owning 25%, and we will pay a cash consideration of $577 million and 58.8 million DOF shares. We will finance it through a fully underwritten $500 million bank debt facility. Hilde will talk a bit more about later on in the presentation, and we will raise up to $125 million in an equity raise. We raised $100 million yesterday at close, and the rest will be done through a repair, fully underwritten repair issue, guaranteed repair issue later on. You can read separate stock exchange releases about the placement issued yesterday and this morning. So the time here is that we signed with Maersk Supply Service Holding A/S yesterday. We will call for an EGM in DOF on the send-out invitation 5th of July, and the EGM will be 26th of July.
We are working on the prospectus and approve and publish that quarter three, quarter four, and then we expect closing in quarter four. And of course, it has to be approved from some comments on the globe, and we expect that to take, let's say, three months. But of course, to be 100% precise on that is difficult. This is then how it looks. So we are acquiring Maersk Supply Service A/S. DOF will own 100% of that company after close, and we are paying to Maersk Supply Service Holding A/S, as we said, $577 million in cash and 58.8 million shares in DOF. And as you can see, Maersk Supply Service A/S is 100% daughter company of A.P. Møller Holding A/S. And the transaction is, let's say, there is a lockbox date in the transaction of 31st of January 2024 or 31st of December 2023.
There will be a certain adjustment to the $577 million cash amount due to some intercompany debt and a few other items. We will also pay a lockbox interest from 1st of July. The company Maersk Supply Service is without any debt, so it's debt-free. So we are buying it on a debt-free basis with, as you can see, with net cash of $55 million and a net working capital of approximately $20 million at lockbox date 31 December 2023. Then why do we do it? Svein Harald Øygard, of course, mentioned a few points on this. Of course, it's an immediate fleet expansion in boosting scale with modern and very high-end quality subsea and anchor handling fleet. And of course, with the background, we see a booming market. We see a cycle lasting long.
Of course, we see DOF now recently have done contracts for both subsea and anchor handling tonnage into 2028 and also into 2029 at a high rate. So we see a perfect timing for growing the fleet. And as Svein Harald said, of course, we are almost all out on the anchor handling side, and we also have a very high backlog on the subsea side. It's complementary operations geographically. We operate in the same regions. So we also expect to unlock cost synergies. And of course, we also see strengthening scale and presence being more relevant for even more relevant for our clients around the globe. And of course, we also expect this to be a very interesting place to work, so to attract talents. We believe it's very attractively priced assets. And of course, we expect a large potential for substantial vessel and project earnings growth.
Of course, as Svein Harald mentioned, of course, we have a growing project business in DOF. And of course, both on the anchor handlers and on the CSVs, we expect to add project earnings gradually on the Maersk fleet as well. And as such, boosting earnings not only from a very strong vessel market, but also from a very strong project market around the globe. A.P. Møller Holding, we have a slide on them. It's well known, I assume most of you, a very good strong owner long term. And we of course look forward to closely with them going forward. It's a very financially robust transaction, lowering leverage in DOF, and also increasing the future DOF dividend capacity. So integrated service offering, well positioned in a strong oil and gas market and a growing offshore wind market. Yeah.
So of course, all the subsea fleet, but also of course the anchor handling fleet, very relevant for the growing offshore wind market. And when floating offshore wind kicks off, of course the anchor handling fleet is key to capture that market. So that we really look forward to. And we have mentioned before that we already today are actively bidding a few floating offshore wind markets projects around the globe. And of course, we see a wind project with 50-55 turbines will require 1,200 vessel days from anchor handlers. So it's a very interesting segment that we expect to grow going forward. So this is Maersk Supply Service at a glance. It's 22 very modern vessels. It's operating five continents. It's a very long history.
And as I said, I've been following them at least for 30 years and 8.5-year average age, 1,200 highly skilled employees and headquartered out of Denmark. It's asset-focused business, more than fleet, and it gives us available capacity through lower contract coverage, which is important for us as we are sold out more or less on our own fleet. Svein Harald Øygard, and the fleet is one cable layer. Of course, that's a very interesting vessel in a booming offshore wind market. Of course, we see the play as in the cable laying market, of course, they are busy and have a very long backlog. So it's a very interesting vessel for us going forward. Presently, it works out to Taiwan. Then it's 8 CSVs. On the picture here, you see the Maersk Installer. It's actually on charter that we do first we speak.
They have 3 sister vessels over here. So it's four very large 400-tonne crane subsea boats, the newest in the world fleet, built in 2017-2018, so a bit more than five years old. So it's a fantastic subsea fleet. And of course, well known to us. And we have had it on charter now for a few months and works very well. So we will come back to values and earning potential on that fleet. But of course, 400-tonne crane vessel, four of them in this market is a very interesting position. Then on the anchor handling fleet, as Svein Harald Øygard said, it's a high-end fleet. On the picture here is a vessel called Maersk Minder. We are buying her and four sisters, so in total five. And of course, it's the newest modern high-end, very sophisticated anchor handlers in the world.
They are built in at the same time. They live in 1718, so a bit more than 5 years old. We leave it like that, that slide. Next slide is a bit more on the MSSS holding consideration. So what are we actually paying them? We are paying them 58.8 million shares, which on this calculation is $535 million. And we are paying them $577 million in cash in total $1.1 billion. Yeah. And as we say here on the commentary side, it will be adjusted for certain net working capital. It will be adjusted for cash. It will be adjusted for debt-like items. And it's excluding the lockbox interest. Then we have the DOF assessment of the MSS estimated EV at year-end 2024, but also year-end 2023.
So if we start with the MSS consideration we showed on the last page, showing $1.1 billion, there is a certain lockbox and adjustments taking it to $1.092 billion. Then there is, as we said on last page, $55 million in cash, taking it to $1.037 billion year-end 2023. And then we estimate due to, of course, the cash flow in 2024, but also some certain intercompany debt and other items, that there will be approximately $100 million in cash. So we end up on a year-end EV of $937 million for the MSS. So that is the numbers how we see them. Yeah. And on the combined company, as we say, immediate fleet expansion of high-quality and modern vessels, of course, it's subsea boats. It's eight CSVs.
And of course, we have expected for a long time that that market is very strong. We see very high demand, and we see a lot of opportunities going forward. But also on the anchor handling side, it's been coming back slower, but we see now that we think it's the start of the same pattern as we have seen on the subsea side. We see anchor handling term rates are up a lot, up a lot over the last year. And the recent fixtures we have seen in the market are also some very strong levels. We also see an increased project activity for anchor handlers globally. We see that coming and growing as well. And of course, we see less boats on the supply side. And of course, we also see then gradually stronger North Sea spot market.
If we look at today, of course, it's extremely strong. So loaded with rates valued at $100,000 a day. So we see in total a fleet of 65 boats split into 13 CSVs, 25 anchor handlers, 6 PSVs, and 1 cable layer. And we have mentioned the age of the fleet. And as you see, it's a very young fleet we are getting from Maersk Supply. This is just showing benchmarking to relevant PSVs and on the asset-focused companies. And then on the right-hand side, the more subsea-oriented companies. And of course, we are, you could say we are a service company, but with a very strong sweet spot owning a large fleet. And of course, as we have mentioned for a while, we think the most critical element to control in this booming market is the assets. So you have to control your own assets going forward.
This slide shows how we are positioned around the globe. Of course, it's very interesting to see the size we get in all regions. I will not go through all of it, but of course, where we are strengthening the position a lot is in North America, where we get more exposure to Guyana, and we got more exposure to Canada. The North America region will be a large region for us. Also in the North Sea, we strengthen the position a lot and both on the subsea and anchor handling side. It's a stronger presence in the North Sea. In South America, we are not buying Maersk activity in South America. That will be December. Of course, we already have a very strong presence with 15 subsea assets and nine anchor handling assets in South America. It's already a very strong presence.
In Africa, we strengthen a lot. Especially Angola, where we will have together three large CSVs working for one for Eni, one for Total, and one from Exxon in Angola. So it's a very interesting position in Angola. And then APAC, it's a modest growth. The only vessel Maersk have in that region at the moment is the cable layer, Maersk Connector working in Taiwan, as we said. This is then the asset values. So as you see, the split values, this is broker values from independent brokers. And the total asset value here of $1.3 billion. And as you see here, we have looked at the most modern, the cable layer, the 5 CSVs, which is the 4 I-class vessel and the Maersk four. And the 5 M-class vessels, the most modern anchor handlers. And of course, those will have a boost some sub to $1 billion and 40.
If you remember, the enterprise value we estimated by year-end 2024, that was around $940. So of course, it shows that we are very satisfied with the pricing. Then including remaining 11 boats, we have a total value of $1.3 for the fleet, which is then by year-end enterprise value year-end 2023. It's a 0.79x multiple. Then you see in the footnote, if you use year-end 2024 EBITDA estimates, it's a 0.71x multiple. So it's a very attractive fleet expansion at, of course, very attractive levels. Of course, if you compare it to newbuilds, of course, it is immediate earnings. Of course, much more lower price than what has been reported on the few newbuilds that have been taken. Of course, it's very attractive compared to that.
Also on the recent second-hand transactions, of course, one of the last OSV players in the industry recently bought a 250-tonne crane boat. $85 million was reported. Then they had to do some upgrades, do some docking. So they are talking around $100 million before they have that in operation. Of course, then if you compare that to the price we are paying here, of course, this is a much more attractive price than that. So what do DOF do? Of course, DOF is a vessel owner. But we also are a very sophisticated service provider for the whole industry. Of course, we see that both vessel earnings have been growing. We also see that the service part is growing a lot. Of course, we see the OSV players guiding increased margins. We see the same.
We see, of course, that the activity is growing. We also see that we do quite a bit of business from chartered in boats. Of course, that is the plan we have together with Maersk is to add legacy contracts on the fleet and then renew and strengthen market. It's also some cost synergies. Then, of course, it's to add gradually the service element and increase the overall service earnings for the group. So to be then an integrator of offshore services around the globe. So this is then the backlog for the MSS fleet. And of course, you can study that yourself. But as you see, six CSVs, very modern CSVs, the four I-classes, the Fuzetti, and are all exposed to the market either in 2025 or early 2026. Then the connector and the achiever, of course, is already working on very attractive contracts.
The achiever, amazing good contract won a few months back. So likewise, on the anchor handling side, you see seven high-end vessels all with bollard pull around 250 tons of really high-end boats are exposed to the market now. And we find that very interesting. On the right-hand side here, you see the backlog for DOF, so almost all load in 2024, getting a very high backlog for 2025. And of course, as we have mentioned before, we still have a few contracts in the pipeline. So we expect that to increase, building more backlog in 2025, but also more backlog in 2026 and onwards. So of course, we have been planning this. We have been in discussion with Maersk Supply for quite some time. And of course, we have been planning this.
And of course, that's part of the reason why we have thought to get backlog for our own fleet to have because we were planning to get new capacity in here. So it's very interesting for us, this backlog. And of course, we normally don't do this. But it's a kind of an illustrative mark-to-market calculation. So what we have done here is that we are saying if we are able to do the same on some selected Maersk vessels that we have done recently on our own boats, then we get to this a bit higher level. So I'll take you through it a bit. So on the anchor handling side, we recently announced a three-year contract with ExxonMobil here in Norway. And the rate for the boat and also the subsea scope gives around $15 million in total EBITDA for that spread on that contract.
Then we also just announced a three-year contract for the Skandi Amazonas in Brazil. And that is with all ROV. So it's a pure vessel charter. And that is a gross rate of just shy of $80,000 a day. And expect to give around $15 million in EBITDA per year. And of course, the M-class vessels are very similar to these two ladies. Then on the CSV side, we recently announced a letter of intent with ENI in Angola for a two-year contract commencing in November this year, which is a very similar vessel to the Maersk Supply Service that is presently in Angola working for Exxon. Then as you know, we have the Maersk Installer on charter. And we have built a backlog now for her to more or less 100% committed from end April to end of the year.
We see that on top of the term charter rate we pay Maersk, we make around $1 million a year on the subsea side. Then we also have mentioned here the Skandi Acergy that we last year did an 18-month contract with Subsea7 commencing in quarter one 2025. Based on those.
I believe you said the wrong number on Installer. The monthly EBITDA on the project is $1 million.
$1 million per month on the project. Thank you. And then we say that if we are able on the five M-class vessels and the four XI-class and the Maersk four are able to repeat similar contracts of what we have done on our own fleet here, then including the Maersk Connector, the cable layer, which had our own contract. We expect between $240-$280 million in EBITDA mark-to-market on those 11 boats. And on the pricing then, if you use year run-rate estimate for year run-rate 2023, it's a multiple of 4x on the total price. And if you use year run-rate 2024, it's a multiple of 3.60x only on those 11 boats. And then, of course, there is quite a significant earnings potential on the remaining 11 boats. But as I say, this is a theoretical exercise.
Of course, there are no guarantees that we are able to repeat the vessels. But at least it gives kind of a, let's say, a feel for where the market is as we speak. Then A.P. Møller Holding, of course, it's an impressive system. And controlling some very interesting companies around the globe. And I guess very well known to all of you. And so I'm personally very excited to work together with them going forward. And I think we will be able together to continue to build a fantastic DOF Group going forward.
Maybe worth mentioning once that if you go one slide back, of course, the Maersk Drilling was merged, I would say, in a somewhat similar structure into Noble, where then A.P. Møller Holding has been a big shareholder in Noble. As you know from the market, that was then recently acquired Diamond Drilling in a transaction. And at least seen from the outside, it clearly illustrates that at least what my personal interpretation is that A.P. Møller Holding basically works to maximize the value of identity and is supportive of industrial moves that make sense of such a company. And that's, of course, what we expect going forward also with regard to DOF. On the next page, with regard to management, yeah, of course, Mons will continue. He continues as CFO. And then by year-end, Martin Lundberg will take a role.
Then, of course, we look forward to welcoming people from MSS into the DOF organization. We will have a process on that that ensures that the talent can get relevant, interesting, prominent positions also in DOF. Of course, it is a growing industry. It is an industry where there's a scarcity of talent. We look forward to that. We expect that this new entity will be even more attractive as an employer for the key people. With regard to the current structure, DOF is organized with four regions that has the commercial responsibility. I would say, and I can say it as I just joined a year ago, from what I see, they are very talented, very strong, have very excellent client relationships, and really are commercially agile in a way that I think is quite rare.
So it's great, and we will continue to build on that. Then on top of that, we have an asset operation entity that manages the fleet and basically sets the price that the regions have to relate to. And then there are two competence centers, one in conventional and subsea, and one is renewables. Whether this will be the exact structure going forward, that's a discussion to be had. But it just shows the kind of the system currently run by DOF. So if you go to the next page on governance, so the board currently has five members, as shown on the left-hand side. In the transaction agreement, it states that A.P. Møller Holding will have the right to nominate two new board members. And the names for those positions will be put forward in the EGM that Mons mentioned that will be called for end July this year.
Of course, as a chairman, I look forward to welcoming these people into the board. I think it will be a good board. It will be a balanced board. And they will bring interesting capabilities to the board. On top of that, there's in the agreement that A.P. Møller Holding will have the right to nominate the chair of the nomination committee for the next two years, which, of course, I also look forward to it. And I think it's also, of course, it's not for me to say, but of course, it is an illustration that, at least for me, that A.P. Møller Holding has a long-term view on this position, that they are eager to add value to DOF, and that they want to play a constructive role in the governance of the company.
At least my personal reflection is that after this transaction, we will have a very attractive shareholder base in DOF with A.P. Møller Holding in the lead position, but also with some large competence, industrial, and financial owners that adds value to DOF. Of course, happy to welcome additional shareholders. We hope this transaction really shows what the company is able to deliver. With that, I give the word back to Hilde and Mons.
Yeah, please, Hilde, you take this one.
Yeah. It's our view that we are still a financially robust company. If I look to the right, here you see the financing planned for this transaction. On closing, we will draw a loan of $500 million. We have a commitment from four banks. I will come back to that. If you look at the loan-to-value of 38%, that is on broker estimates of the fleet by 1 April. But if you assume the net interest-bearing debt at the lockbox account, the 31st of December 2023, the leverage is lower. You have a net debt of $377 million. Or if you use at the time of closing, which we expect the fourth quarter, sometime in fourth quarter this year, the net interest-bearing debt is assumed of $277 million.
And here we have included the private placement that is planned for $125 million in total, of which $100 million is in place already. So that gives a net loan-to-value of 29% versus 21%. So that gives a financially robust transaction and with lower leverage than in DOF today. This is our fifth silo. And you see the others. They are already funded. And just one word on that. We see the risk of refinancing for the rest of the group to be modest because DOF Rederi, we see a zero financing risk on Norskan. We have long-term funding with the Brazilian Development Bank. So what we plan to refinance is actually the DOF Subsea fleet loan, estimated refinancing need of $350. And to do that in combination of this new silo gives more options and possibilities on the refinancing for the group. Yeah.
Yeah. And of course, just to repeat, of course, we see very strong markets. We see strong growth potential across the combined companies' key markets. So offshore oil and gas, we see steady market growth, strong market growth. And of course, we see both on offshore and subsea side, we see our global presence. And on the increased scale, of course, we see we become even more attractive for all of our clients around the globe. And as on the offshore wind side, of course, we also see high market growth going forward. And of course, we plan to take over part of that market going forward. And the assets we are buying now are perfectly suited for that market as well. So that is the summary. And as we say, we will become the largest owner of CSVs globally.
We will also become the largest owner of high, very high and anchor handlers globally. We see a strong market for both asset classes. And we see a combined very strong organization that will be able to add a lot of services on top. And we have admired, I personally have admired Maersk's organization and fleet for two years. And I really, really look forward to working together with them to build an even greater combined company. So then we, I guess, are ready for the Q&A session. So I don't know what we're going to do. We have Martin here with us as well. So you're really classy, Martin. And Questions.
It's 15 minutes left of the presentation as well.
A few of the questions are on similar subjects. So we'll read them all.
Yeah.
Yeah.
First, the practical one, a list of the ships acquired, and that is included in the presentation. So that will.
Yeah. There is in the attachment, we can show it quickly. We can do that quickly if you want to.
Yeah. But if you can say a few words on the financing as well, Hilde, when you are on that page.
Yeah. As I said, these are the four banks that are funding the transaction. It's DNB, Danske Bank, Danmarks Skibskredit, and Deutsche Bank. So the funding is committed. It's non-recourse to DOF Group ASA. So this is a silo, a separate silo as the other. Yeah. The annual amortization of $71 million. And the interest is 3.5 in margin.
Yeah. And perhaps one from me, I guess there is a cash covenant, minimum cash of $40 million.
Yes.
We have estimated on $155-$170 million cash in the Maersk entity year-end 2024. Of course, it is interesting to see if we are able to actually start dividend payments already done early in 2025. But that we have to come back to. But at least it's something we are looking at.
Yeah. So if you can add to that, Mons, that it is the belief of the company that this transaction will add material dividend capacity to DOF beyond basically the impact of increased shareholding, and that it will accelerate the ability to pay dividend as compared to the assets. We'll revert to more specifics on that when we get to the Q2 and Q3 presentations of the company.
Yeah. So yeah, here is the fleet. You can study that yourself. And of course, here you see the Maersk CSVs at the bottom here. So of course, it's two vessels with 250 ton cranes. So of course, it's four vessels with 400-ton cranes. There's one vessel with a 200 ton crane and then one with a 50-ton crane. So a very interesting fleet for us. And then the Maersk Connector, big cable layer 7,000 ton carousel capacity. So very attractive assets. And perhaps the hottest vessel market in our space. So it's interesting. Then there's the DOF fleet. We don't do that. And then you see the anchor handling fleet here. So I don't go through all of it.
But as we mentioned, I think majority here is above 200-ton bollard pull, and then seven of them above 200-ton bollard pull. And very interesting big boats. For instance, the Maersk M class is 25-meter beam. So it's a small beam here and then the other anchor handling boat in the market. So of course, which also gives it a perfect platform for doing subsea projects and similar projects. So I leave it like that. If you, of course, have questions to the fleet, you feel free to call us anytime. We love to talk about boats. So I leave it like that. So the presentation don't last forever now.
A question from Christopher Mørdal in SpareBank 1 Markets. Could you disclose any financial details regarding Maersk Supply Service with regards to current revenues and EBITDA levels?
I don't think we are allowed to do that. So I don't think we should comment too much on that before after close. So I'm afraid we cannot go into any details on that.
There is another one from Christopher as well. The cash generated in Maersk Supply Service from acquisition announcement to entry closing. Will that be retained by Maersk Supply Service Holding, or will it, in fact, reduce price paid by DOF Group?
It will be buying the transaction that we are buying this lockbox to the 1 December 2023, both entities. So for their 25% shareholding, they get access to the earnings in DOF in 2024. And likewise, 50% of the Maersk Supply, we get access to their cash flow and cash. So their cash flow and the cash is, and of course, that's why we had on this page, what page was it where we showed the DOF estimates for year-end. Of course, we are doing that, of course, because we are keeping the cash flow and the cash generated through the year. So that's why we, of course, are showing this slide where we estimate the enterprise value, including the estimated cash at year-end. So showing $937. And then on this slide, we have estimated $155 million in cash by year-end.
It will be retained in Maersk Supply.
Yeah. Then maybe also the current debt structure in Maersk implies that the debt currently sits one level above the operating entity, which meant that from the cash generated, there will be no deductions for the financing cost of the entity. But we will pay interest rates from a certain cut of date on that accumulated cash until closing.
Yeah. So you see it here, the transaction perimeter that we are buying, there is no debt. The debt is in the holding company, Maersk Supply Service Holding, that we are not buying. And then we are buying lockbox interest on the cash amount from 1 July.
So we have Stig Erik Kyrkjeeide there with a few questions as well. First of all, congrats on a great deal. Why don't you include the LNM class and anchor handlers Maersk vessels operating in Brazil? Are there any purchase options for DOF to acquire these vessels at a later stage?
There are no purchase options. Why are not included? I guess the short version, of course, is that we did not agree to include them. I think we are focusing on the 22 boats we are buying.
You highlight 11 very high and modern vessels. Some of the remaining 11 vessels older and smaller than typical DOF vessels, should we expect some of those to be disposed of?
Yeah. Of course, we see the combined fleet at close would be 65 vessels. And then we have 56 boats on charter. So we have control, let's say, 70 boats with 71 boats commercially at close. And of course, what is the strategy for DOF? Of course, it is the high-end anchor handlers that we can use on our subsea projects globally, especially the mooring projects where we make good margins on top. And there is the on the subsea side. So I think there are a few boats in the Maersk fleet, but also a few boats in the DOF fleet that could be candidates for sale. And of course, it all depends on pricing because for all of these assets, the markets are very strong. So of course, it has to reflect to sell a boat, it has to reflect underlying earning potential.
So yes, the answer to the question is that it will be looked at and it is not unlikely that there will be selling a few boats and, of course, increasing further the debt reduction in the combined group.
Adding a couple of points. Number one, of course, since the IPO, vessels have been divested and that process will continue. There were some vessels that were defined as kind of less kind of core vessels for DOF. We looked at three different models for those. We looked at selling a subset of the portfolio. We looked at carving out in a separate entity. We looked at basically selling vessel by vessel. The clear conclusion based on that process was that it's most value-adding for DOF to sell vessel by vessel because, yeah, we basically get the premium that specific vessel buyers can extract from the marketplace. That's a process, as Mons said, that will continue.
That's saying that the short answer is that we don't expect that all the 65 boats in the combined fleet will be owned long-term by DOF.
Then there is the related: are all Maersk vessels included as first priority in the financing, or can we sell or dispose of some vessels without repaying debt?
The fleet loan is structured that every vessel has a kind of portion of the loan. So if the price is above that, then it's cash to the company.
Yeah. I guess the gross loan-to-value without including cash is kind of 38%. Meaning that if that is average value, give 38% to the banks and 62% to the company as cash.
Yeah. Obviously, the oldest vessel has the lowest portion.
There are a few questions on cash and cost synergies. Can you just generally comment on that? Any levels or?
Of course, we have, of course, the first meeting we had with Maersk representatives was actually in September last year. And then next meeting, October, and after that, long discussion. So we have been through boat by boat in both companies. We've been through partly the forward on the structure on the onshore side. And it's a bit too early to put any numbers on input, but of course, we expect cost synergies and we expect, of course, also utilization and earnings synergies from larger combined fleet. So I guess we will not comment on details on that before after close. But there is a plan.
Then we have Håkon Amundsen in ABG. How do you expect the transaction will impact the timing of a group refinancing or start of dividend payments?
So as we said, the last one here commented already by Svein Harald Øygard, Hilde Drønen, we expect, of course, this to actually increase the dividend capacity and also position us for paying dividends earlier. And on the refinancing, of course, the timing is the same. It will be done probably start looking at this fall and do it in, let's say, I would assume first half 2025. And we think this will only strengthen it, higher market cap, lower gearing, more attractive company. And from new banks into the financing of Maersk. So we think this will only be positive for refinancing of the group.
Yeah, I totally agree. Having this acquisition is just strengthening our position. The point is on the refinancing is to secure a more flexible structure within the group, which enables the DOF Group also to pay dividend.
Yeah. So we will get rid of the silos. We will have free flow to cash. We will have no restrictions on dividends or anything. And we have said we're going to get on to debt of the 1.5, and we want to stay there. So that's the plan.
Is increased presence in the North Sea and North America a priority, although you do any repositioning of the acquired fleet?
Of course, it's easy to answer that. We go where we make most money. Of course, the good thing about both is that the float can move. If you look at the DOF fleet, of course, it's moving around the globe all the time. Vessels moving from the North Sea to Africa to North America to South America. It's going to be marketed globally. I would expect, of course, a few of the North Sea assets to move to other regions. Of course, we see strong opportunities for them both in APAC, in West Africa, and in South America. This will be as normal in DOF, we go where the money is best.
Perhaps lastly, do you intend on increased focus on cable-laying business moving forward?
Of course, it is, as we said, we have looked a bit at that market. We have seen what is happening in that market. And we, of course, see it's high growth and very strong. But as we said, the connector is on contract in Taiwan firm and 2025 and then option and 2026. And so we have time to look at that. But of course, we have ambitions in the renewable space. But we have to come back to that. Of course, as always, we go after the money. And so if we could even consider selling that boat if the price was fantastic. But as we say, she is now busy on a very nice contract until 2025. And likely the option will be taken to 2026. So we have time to review that. But we like that segment quite a lot from a market perspective.
A short one on Maersk U.S. listing beyond the cards for 2025.
We have been kind of busy lately. Now it is time for some holidays. Hopefully, I luckily can go on some holiday because the backlog I promised has materialized. Then we come back. Of course, nothing is ruled out, but it's not something we have been discussing internally.
Adding, of course, yeah, we are looking at actions that we could take to broaden, strengthen the shareholder base, and to add liquidity to the share. This transaction, we believe, will help on that. Also with the share issue that we had very successfully yesterday evening, that at least added some potential liquidity to the market. And of course, we grew in size and we grew in scope, which of course also should make us more relevant for international investors. With this, we will be the number one leading company in this specific segment. So any investor that would look to have a material position in this specific segment will, of course, look to DOF. And that's also, of course, part of the more financial transaction rationale. As part of that, of course, we will have a process to discuss a possible U.S. listing based on the timeline and the priorities that Mons set out.
Tom, any more questions?
There are more questions, but I think we'll...
If you have one interesting question, we'll answer that. And then, of course, we will have a session later on today, 3:00 P.M. on web. And we also have a lunch presentation in Oslo, 1:00 P.M. today. So you are welcome on both of those. And we will answer questions on those as well. So do you have one final question before we round it off?
Include a second one from Haakon Amundsen in ABG. When do you expect MSS to generate the illustrative mark-to-market EBITDA provided on page 17?
I get on page 17. What was the page 17? That's one.
Next one.
Yeah. So of course.
I'll probably refer to the next page.
I guess Håkon, you see it yourself. So you see, I guess it will be gradually through 2025. And then you could say for 2026, you see on this, it's only for five boats that have contracts or options into 2026. And of course, a few of them already are on market rates. So let's say then gradually through 2025, but into 2026, if we are clever and able to do what we hope to do, we think we're going to be almost at market rates for the entire fleet in 2026. But as I said, with a couple of three, four exemptions. So that, I guess we are on over time. But thank you very much for listening. As Anna and you understand, we are excited.
We really look forward to work with the MAS team and the Møller team and continue to build a very strong combined company in what we believe is a very strong, long-lasting cycle for our industry. Thank you very much.