* Ross, First Reserve, CIC, Fairfax commit to invest
* Diamond to buy 30 product carriers from Cido Tanker
(Adds details, analyst quote in paragraphs 5,6)
By Krishna Das and Jonathan Saul
BANGALORE/LONDON, Aug 1 Diamond S Shipping said
WL Ross, First Reserve and some other global institutional
investors had committed about $1 billion in equity to the
privately held U.S. shipping group as it looks to expand its
fleet amid rising demand for oil.
Diamond will buy 30 medium-range refined product carriers
from privately owned Cido Tanker Holding Co under a deal
expected to close in this calendar quarter. This will add to its
fleet of 10 tankers under construction in Korean shipyards.
To ensure a smooth transaction of existing charters,
third-party management contracts, flags and classifications of
the ships, the Cido deal was structured as the purchase of stock
in companies that own the 30 product carriers.
Diamond CEO Craig Stevenson Jr told Reuters it was "very
attractive to buy assets" as the shipping industry grapples with
vessel oversupply issue.
Diamond was founded in 2007 by private investment firm First
Reserve and Stevenson to create an energy-focused shipping
company. Prior to that, Stevenson led OMI Corp that is now owned
by Teekay Corp and Torm A/S .
"This deal is significant and is quite a significant step
for both Diamond S and First Reserve and is one of the largest
deals in maritime history within the product carrier segment,"
Dahlman Rose & Co analyst Omar Nokta said.
Apart from First Reserve and Ross, the other equity
investors in Diamond are China Investment Corp , Fairfax
Financial Holdings Ltd , Morgan Creek Capital Management
and PPM America Capital Partners.
"We have been looking for the right opportunity in the
shipping industry for some time," said Wilbur Ross Jr., Chairman
of WL Ross & Co.
Replying to a question whether the investments were a
prelude to Diamond going public, Stevenson said: "When you add
all the ships together, the 40 ships, it's identical to the
public company that I was in... so it would resonate with the
(Reporting by Krishna N Das in Bangalore and Jonathan Saul in
London; Editing by David Cowell and Gopakumar Warrier)