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 Post subject: Re: Rand Chapter 11 filing
Unread postPosted: February 8, 2018, 4:33 pm 

Joined: January 17, 2018, 9:13 am
Posts: 2
Guest wrote:
Maybe Im wrong but didn't Algomas or CSLs new builds cost around 30-40 mill I thought they quoted that.


Yes, but this is because they are not subject to the Jones Act and were built overseas (much cheaper).


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 Post subject: Re: Rand Chapter 11 filing
Unread postPosted: February 7, 2018, 1:44 pm 
An interesting thought!
Is it possible that the American division after bankruptcy might be sold off or scraped all together and leave the Canadian disivion lower lakes towing separate
The Canadian division generates almost three quarters of there profit
Return it to what it was in the beginning a Canadian shipping company that made money


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 Post subject: Re: Rand Chapter 11 filing
Unread postPosted: February 3, 2018, 12:09 pm 
Maybe Im wrong but didn't Algomas or CSLs new builds cost around 30-40 mill I thought they quoted that.


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 Post subject: Re: Rand Chapter 11 filing
Unread postPosted: February 3, 2018, 5:40 am 

Joined: December 7, 2014, 10:33 am
Posts: 69
navarch wrote:
A new ship would be SIGNIFICANTLY more than $30 million - this high cost is one of the reasons you see old ships being rebuilt and no new ones being built. For example, the Buffalo cost $25 million to build in 1978. Taking into account inflation, that is just under $100 million today!


In a sense, yes, but production flow at shipyards have also improved to bring down overall construction costs. The increase in material costs, however, are a different subject, in addition to design requirements further requiring additional expenditures in a new build construction.

A new build ship would be required to confirm to current regulations, of which existing ships are exempt from in certain respects - for instance, integrated fire detection systems, ballast water treatment systems, various SOLAS rules, and others. These all add to the increase in cost. Economies of scale also play a part, as building three ships of a class is lower cost per unit than building a one-off design.

Fincantieri should consider a partnership as done with NASSCO and DSEC (Daewoo Shipbuilding) or Aker Philly and Hyundai. They could gain expertise of a major shipbuilder in producing subassemblies and engineering work, but use a local yard and labor to assemble the sections, as is done in San Diego and Philadelphia. Bay Shipbuilding has the talent to fabricate ship components, but they cannot beat the efficiency of working with a shipyard that launches a new ship each week. Though, the transportation from ocean coast to inland is likely to offset any gains in cost reductions. The Fincantieri Group brings to the table a history of building cruise ships, yachts, and military vessels...hardly a beacon of efficiency required in commercial ship construction.


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 Post subject: Re: Rand Chapter 11 filing
Unread postPosted: February 3, 2018, 3:53 am 
History repeats it's self. A riverboat company can't compete in this age in shipping. Tomlinson, Reiss O.N. The list goes on. The contracts are probably too competitive to profit long term. As the fall of Rand in bankruptcy. Who is next to pick up these contracts. I seen imported steel take away our mills. Thousands unemployed. Dredging very costly for drafts. Now the 700ft plus will need take do these hauls if possible. The bigger haulers will need to compromise, docks will dissolve. Less competitive. If coal becomes obsolete the footer's can handle the ore contracts. They can't go up the river. So older boats cost more to operate! I'm sure. Seen a decline since the 70's and continuing. Not to offend. My thoughts only. Thanks. Andy.


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 Post subject: Re: Rand Chapter 11 filing
Unread postPosted: February 2, 2018, 8:34 pm 
Welder wrote:
How do you know they spent 30 million on 3 dockings?


Literally, from the post you quoted:

This is all taken from the legal document rand filed into the court


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 Post subject: Re: Rand Chapter 11 filing
Unread postPosted: February 2, 2018, 6:13 pm 
Welder, please read this document that was filed with the courts. https://www.csbankruptcyblog.com/wp-con . tion-3.pdf

The company spent $29.2 million on capital expenditures, mainly on the Calumet (2), Manitowoc and Menominee due to "substantial steel renewal" as part of a USCG special survey. The document states that maintenance and repairs had been deferred on those three ships, and the moving of the ships from Lloyds Register to ABS Group safety and regulation. The standards were apparently more strict, so additional steel thicknesses has to be added in certain areas to meet ABS Group guidelines.

This can be found in section 56 of the document link provided above.


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 Post subject: Re: Rand Chapter 11 filing
Unread postPosted: February 2, 2018, 5:27 pm 
Rand defaulted on 150$ million loan in 2015 as they failed to maintain a debt to ebitia ratio and the “change of control caused by the non renewal of scott bravener’s employment agreement with the company”
Does anyone know what brought about his leaving the company??

navarch wrote:
A new ship would be SIGNIFICANTLY more than $30 million - this high cost is one of the reasons you see old ships being rebuilt and no new ones being built. For example, the Buffalo cost $25 million to build in 1978. Taking into account inflation, that is just under $100 million today!


An interesting thought does anyone know how many new builds have been completed on the American fleet compared to the Canadian fleet
I know both csl and algoma have invested millions in the last few years on fleet replacement and forbody replacement

I would like to clarify that I in no way intended to insult rand or any of there shipping companies or the fine people who work there
I am only trying to understand what happened to cause a large shipping company to declare bankruptcy
I try my best to only post factual information to foster a discussion among members


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 Post subject: Re: Rand Chapter 11 filing
Unread postPosted: February 2, 2018, 4:45 pm 
Pjwh12 wrote:
After some further reading of the banckruptcy statement rand filed in court in deleware they claim the following reasons for bankruptcy
1. 60% of there profits are in Canadian dollars which is worth less than American dollars
2. 70% of there expenses and 100% of there interest payments are in American dollars
3. Manitoulin Was built and payed for with American dollars but is Canadian flaged so it’s profits are in Canadian funds rand states this is a major reason for there not being able to pay the interest on the money owed to build her
4. in 2017 rand spent 30 million on dry dock and repair 3 times what they usually spend
This was a result of the Calumet ll Manitowoc Menominee all required extensive steel renewal due to years of neglect and poor maintience
This is all taken from the legal document rand filed into the court

So it seems the Canadian dollar is rands reason for going broke!!
That and trying to patch holes on 3 ships that outlived there normal hull life by decades! and building a new ship they could not afford
All this to me points to the corporate mismagement at rand

As a side note the Canadian dollar is worth about 80 cents to 1 American dollar
So if rands customer pays rand 1 dollar Canadian it only recieves 80 cents American so rand looses 20 cents on every dollar it is paid
I have a feeling this is why rand is the only shipper on the lakes with a Canadian and American fleet
Perhaps the other shipping companies know better

Questions:
Do you work or sail for Rand?
How do you know they spent 30 million on 3 dockings?
How do you know there were "years of neglect and poor maintenance"?
I happen to work at one of the shipyards were the work was done, and that's all a bunch of crap.
Their boats left the yard is pretty damm good shape, and have not outlived their life.
Believe me the "big boys" as you call them, took notice.


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 Post subject: Re: Rand Chapter 11 filing
Unread postPosted: February 2, 2018, 2:19 pm 

Joined: January 17, 2018, 9:13 am
Posts: 2
A new ship would be SIGNIFICANTLY more than $30 million - this high cost is one of the reasons you see old ships being rebuilt and no new ones being built. For example, the Buffalo cost $25 million to build in 1978. Taking into account inflation, that is just under $100 million today!


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 Post subject: Re: Rand Chapter 11 filing
Unread postPosted: February 2, 2018, 12:54 pm 
30 mill in drydocking and repairs how much is a new ship not much more than that, that seems very steep!


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 Post subject: Re: Rand Chapter 11 filing
Unread postPosted: February 2, 2018, 7:02 am 

Joined: December 13, 2017, 6:46 am
Posts: 9
Surely accounting would have taken the Canadian dollar income and American dollar operating expenses into account when they quoted contracts. Its not like the Canadian dollar suddenly went from par to 80 cents.

Regards, John


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 Post subject: Re: Rand Chapter 11 filing
Unread postPosted: February 2, 2018, 1:00 am 
After some further reading of the banckruptcy statement rand filed in court in deleware they claim the following reasons for bankruptcy
1. 60% of there profits are in Canadian dollars which is worth less than American dollars
2. 70% of there expenses and 100% of there interest payments are in American dollars
3. Manitoulin Was built and payed for with American dollars but is Canadian flaged so it’s profits are in Canadian funds rand states this is a major reason for there not being able to pay the interest on the money owed to build her
4. in 2017 rand spent 30 million on dry dock and repair 3 times what they usually spend
This was a result of the Calumet ll Manitowoc Menominee all required extensive steel renewal due to years of neglect and poor maintience
This is all taken from the legal document rand filed into the court

So it seems the Canadian dollar is rands reason for going broke!!
That and trying to patch holes on 3 ships that outlived there normal hull life by decades! and building a new ship they could not afford
All this to me points to the corporate mismagement at rand

As a side note the Canadian dollar is worth about 80 cents to 1 American dollar
So if rands customer pays rand 1 dollar Canadian it only recieves 80 cents American so rand looses 20 cents on every dollar it is paid
I have a feeling this is why rand is the only shipper on the lakes with a Canadian and American fleet
Perhaps the other shipping companies know better


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 Post subject: Re: Rand Chapter 11 filing
Unread postPosted: February 1, 2018, 10:57 am 
Rand was in debt 253 million dollars
2 years ago they defaulted on a 150 million dollar loan
AIP acquired rand by assumeing 90 million in debt ?
So does that mean the balance of rands debt is in bankruptcy ?
As you can see I’m no account just trying to understand the math


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 Post subject: Re: Rand Chapter 11 filing
Unread postPosted: February 1, 2018, 10:32 am 
The entire babkruptcy filing can be found at the Securities and Exchange Commission's website: https://www.sec.gov/Archives/edgar/data . k-rand.htm


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