Maritime Compass Llc
1. How much is the Bet Performer worth based on comparable transactions? What ship is the best reference transaction? (the closest comparable)?
Comparable transaction is a conventional method of evaluating the value of something that is ready for sale. To value a ship, one had to identify a set of “comparable” ships where comparability was based on four main factors: ship type, size (DWT), age, and condition.
The Bet Performer was a 11 year old ship, built in 1997, 172,000 DWT capsize bulk carrier. From the Exhibit 4, there are five ships which are the most comparable to Bet Performer. They are Martha Verity, Ingenious, Sumihou, Cape Sun, and Coppersmith. These ships all have the most similar characteristics, in terms of ship type, DWT, ship age and gears. We have to have atleast 5 benchmark transactions to identify the purchase price.
Sale Date Ship Name Ship Type DWT Year Built Age at Sale Gear Purchase Price
Mar-07 Martha Verity Capesize 158.0 1995 12 gearless $63.0
May-07 Ingenious Capesize 170.0 1996 11 gearless $64.2
Nov-07 Sumihou Capesize 171.1 1996 11 gearless $106.0
Mar-08 Cape Sun Capesize 171.7 1999 9 gearless $135.0
May-08 Bet Performer Capesize 172.1 1997 11 gearless $133.0
Jul-08 Coppersmith Capesize 149.7 1995 13 gearless $101.0
The closet comparable transaction was that of Sumihou Capesize, and so Bet performer’s best reference/comparable transaction might be $ 106 mln.
2. Regression Analysis
a. What is the expected relationship between ship price and each factor listed in Exhibit 4 (size, age and charter rates)? What is the economic logic for why each factor might
Comparable transaction is a conventional method of evaluating the value of something that is ready for sale. To value a ship, one had to identify a set of “comparable” ships where comparability was based on four main factors: ship type, size (DWT), age, and condition.
The Bet Performer was a 11 year old ship, built in 1997, 172,000 DWT capsize bulk carrier. From the Exhibit 4, there are five ships which are the most comparable to Bet Performer. They are Martha Verity, Ingenious, Sumihou, Cape Sun, and Coppersmith. These ships all have the most similar characteristics, in terms of ship type, DWT, ship age and gears. We have to have atleast 5 benchmark transactions to identify the purchase price.
Sale Date Ship Name Ship Type DWT Year Built Age at Sale Gear Purchase Price
Mar-07 Martha Verity Capesize 158.0 1995 12 gearless $63.0
May-07 Ingenious Capesize 170.0 1996 11 gearless $64.2
Nov-07 Sumihou Capesize 171.1 1996 11 gearless $106.0
Mar-08 Cape Sun Capesize 171.7 1999 9 gearless $135.0
May-08 Bet Performer Capesize 172.1 1997 11 gearless $133.0
Jul-08 Coppersmith Capesize 149.7 1995 13 gearless $101.0
The closet comparable transaction was that of Sumihou Capesize, and so Bet performer’s best reference/comparable transaction might be $ 106 mln.
2. Regression Analysis
a. What is the expected relationship between ship price and each factor listed in Exhibit 4 (size, age and charter rates)? What is the economic logic for why each factor might