Taking Mitsui O.S.K. Lines on as a 14.86% shareholder in an offshore alliance (2023)

The 15 billion yen that turned a project partner into a shareholder

What this resolution selected was not the amount of money raised but the party it was allotted to. $107.4M (¥15bn) is less than a quarter of the $457.7M (¥69bn) operating profit Modec would report two years later for the year to December 2025. For that money it diluted existing holders by 21.16% and issued at ¥1,264 a share, 9.97% below the previous day’s close of ¥1,404. Borrowing and bonds would push down the equity ratio; a public offering costs time and money and brings no capital-and-business alliance with it — the process of elimination set out in the disclosure can be read as an explanation of the instrument chosen and, at the same time, of the counterparty chosen.

Taking capital from the party you do projects with means making that party a shareholder outside the projects as well. Mitsui O.S.K. Lines had already been co-investing in the special-purpose companies Modec sets up, and when a party with money in the same assets holds 14.86% of the shares outstanding, a charter project’s creditworthiness in the eyes of a lender rises. For the same reason, the alliance agreement wrote in that Mitsui O.S.K. Lines would nominate one director candidate and one executive-officer candidate. While the projects keep coming, the price of having the project counterparty on the register stays off the page. What decides the day an alliance bound by capital ends is the 5% line written into the contract — not Modec.