Shipping stocks at bay

Shipowners are changing course, turning away for now from their ambitious plans to list their companies on the New York Stock Exchange. The decline in freight rates in recent months combined with the expected saturation of investors from the consecutive listings of shipping firms in the last six months – with almost one every week – could only affect negatively the plans many Greek companies had. The Greek curtain at Wall Street was raised by the public listing of Aries Maritime owned by Gavriil Petridis (who also controls Magnus Carriers). The company was forced to reduce the amount of shares on offer and failed to reach the price of $14-16 that was the original target, falling after the first day’s closing to $12.5. Gradually, though, investors seem to be trusting Aries Maritime more, as the share’s price reached $14.85 recently – a rise of 18.8 percent. The company was endowed by Aries Energy, its parent company, with a 12-vessel fleet (seven ships carrying oil products and five carrying containers). The tankers are modern and double-hulled, while all Aries Maritime ships are time-chartered with long-term contracts. Aries Maritime suffered losses when, just before its listing, a scandal was revealed involving one of its top officials, which the firm’s management replaced. He had allegedly organized the explosion of a ship in the past to cash in the insurance compensation. The bad news from Aries Maritime and several foreign shipping firms led Petros Marinakis, the main stakeholder of Barclay Shipping, to cancel his plans for listing a section of the subsidiary Capital Shipmanagement, named Capital Maritime & Trading, aimed to draw about $250 million. The second victim was Stealth Gas of Haris Vafias, the youngest in the well-known ship-owning family. Vafias decided to postpone the planned listing in the Nasdaq market before even submitting the relevant application. These two Greek shipowners did not want to see their stocks enter the market at a lower price than planned, as investors seem to take it for granted now that they can purchase shipping shares at a considerable discount. Both they and other shipowners with similar plans will probably have to wait at least until September when the atmosphere traditionally changes at Wall Street. Marinakis’s future intentions remain unknown, as he has withdrawn his application for listing Capital Maritime & Trading. The most resounding listing postponement came from another Greek company, Golden Energy Marine of the Restis Group. Golden Energy was originally forced to curb its expectations, reducing the target amount from $230 million to $200 million. The company was about to offer 8 million shares at a price range of $24-27 per share. Yet according to NYSE sources quoted by the TradeWinds publication, during the first months of the processing of the company’s public listing it had aimed for net proceeds of $700 million. On July 26, Golden Energy asked for its listing to be postponed until September. Restis Group The Restis Group ranks fifth among Greek shipping companies, according to their tonnage, as its 70 vessels reach 4.6 million dwt. It was also among the companies to make headlines last year by purchasing 32 cargo carriers from MISC for $740 million. Still, many analysts had rushed to note that Golden Energy, which controls a fleet of cargo vessels, tankers, and oil product carriers, would have a hard time attracting public investors. In part, that’s because of the company’s plan to add nine panamax cargo ships to its fleet with the funds it would have drawn. It now seems investors are after shipping companies with a specific fleet and stable revenues. The latter was also worrying investors as the company had intended to spread its ships between the spot market and the time-chartering one (for contracts of at least one year). Rate fluctuations, particularly in the spot market, have now troubled investors. Another issue was the existence of a large fleet that would not negotiate publicly, under the roof of Golden Energy. There were many people wondering whether the most beneficial contracts would be channeled to those vessels or to the Golden Energy fleet. On the other hand, Petros Georgiopoulos chose not to wait and listed the stock of Genco Shipping & Trading – his second company after the particularly successful business and stock market course of Genmar, which is now among the biggest Greek-interest companies. However, not even the good impression US investors have of Georgiopoulos could reverse the course of Genco, which owns cargo ships operating in Asia-Pacific. Initially Genco was forced to cut the number of shares to be traded publicly from 11.5 million to 11.3 million, also reducing the price range from $24-27 to $22-23. Yet eventually on the first day of trading 11.8 million shares were allocated at $21, drawing $247.5 million instead of $293 million. With the end of the first day Genco’s share had fallen to $20.87, while last week it was at just over $19.