The impact of private equity funds and US capital markets’ financing of the Greek newbuildings program was debated in Athens, Greece, at the Tradewinds Shipowners Forum that took place during the Posidonia shipping event on 3 June.
A panel of major shipowners discussed the funding sources of the Greek newbuilding program order book, which last year alone committed upwards of $13bn for 275 vessels of more than 24.5m dw and increasing the dwt total on order for Greeks by 364 percent. The panelists also debated the pros and cons of going public or staying private.
Arguing his case on behalf of the privately held shipping companies, the managing director of Eastern Mediterranean Maritime Limited, Αthanasios Martinos, said:”We feel the competition growing stronger as a result of access to liquidity from the markets or PE funds, but on the other hand we welcome investment activity because it is beneficial to the overall industry and the economy at large as this gives business to ship yards, creates innovation, reduces transportation cost to the benefit of consumers, fuels vertical sectors such as consultants and contributes to cleaner seas.”
“It is also true that the listed space offers you opportunities to manage generational change,” he added.
According to Mr. Martinos, there is an apparent trend for Greek shipping going public in the future. “The sector will be less private and more public which is better for everyone as the Greeks can offer the world shipping expertise and knowledge,” he said.
Regarding the potential tonnage oversupply that growth funding may create, Mr. Martinos said that investors could be directed to the second hand market to avoid oversupply of tonnage.
On his part, Evangelos Marinakis, director and chairman of Capital Product Partners, said that private equity investments have to be dealt with professionally and that the companies who operate this tonnage should not be doing so for speculation purposes but should adopt a more measured and realistic approach to their returns.
The panel included George Economou, president and CEO of Dryships Inc; Angeliki Frangou, CEO and president of Navios Maritime Holding; Emanuele Lauro, chairman and CEO of Scorpio Bulkers; and Nikolas Tsakos, president and CEO of Tsakos Energy Navigation.
The Posidonia shipping exhibition is taking place at the Athens Metropolitan Expo and will run until 6 June.