Through his new endeavour Alba Maritime, Sotiri Dushas, the architect behind the recent $1.1 billion deal bringing the newbuilding fleet of Anemi Maritime in the arms of NY-listed Eagle Bulk Shipping, talks to Hellenic Shipping
News about the investment opportunities in today's market. He also reveals of a new investment scheme, which will soon invest again in supramax vessels, after completing the contracting arrangements for building 24 bulk carriers, of which 12 are capesizes and 12 are panamaxes, a total investment of $1.5 billion.
Alba Maritime is a relatively recent entity, being founded some months ago. Could you provide us with some details on what activities and investments has the shipping company been engaging into?
We have invested in newbuilding orders with 12 orders for capesizes in Korea (STX Shipbuilding) and further 12 panamax vessels in Indian shipyards. So, our total orderbook in the dry bulk market reaches 24 vessels. The investment cost reaches approximately $1.5 billion.
Are there any vessels under operation currently?
No, we've sold all of our ships and we have invested everything in newbuildings. Alba Maritime is divided in two separate companies, or investment groups if you'd like. The first one is Avra which deals with the capesizes and the second one is Avgi, which deals with the panamaxes. Of course, behind both schemes are investors, which believed in this effort. Most of the vessels are already chartered to companies like Hanjin, Korea Line Corporation and Glorywealth. At the moment we are not thinking of any new deal, which would the vessels being sold, but we can't also rule out such a scenario. But for now, we intend to see the vessels coming into the market.
Furthermore, we will soon be ready to launch a third investment scheme, also in the dry bulk market, but this time on the supramax size.
Which shipyard will deal with the new project in the supramax size?
Most probably we will return to China, not so much due to better pricing, but because of the relationship we have developed in the past. We worked together, we've learned together in the previous years, so it's easier for us to return to China and Sungdong Shipbuilding & Marine Engineering.
How did you become involved with shipping?
Well, my family was the main reason. My father was the owner of a shipping company and I began working there, until the age of 19 years old, which also involved working on board the ships. Later on I left Hellas and began working as a shipbroker and a few years later in other shipping companies, most notably for Teekay in Vancouver of Canada.
Why did you decide to invest in the dry bulk market?
The answer is easy to that question. This was the market with the most promising investment potential.
Prior to Alba, you had set up Anemi Maritime which was sold recently to Eagle Bulk.
That's right, through Anemi, we ordered 6-7 vessels which we had them all chartered and then decided to sell all of them to NY-listed Eagle Bulk Shipping for a price tag of approximately $1.1 billion. The deal was finalised at late July, which makes it a rather quick transaction. We were lucky, because the market conditions were ideal. But at the end of the day, that's why we're working, to make money isn't it?
Is it safe to say that there is a new trend in the market with private shipping companies, acting as "feeders" of public companies, taking the risks necessary early on and later cashing in by selling entire fleets of newbuildings to listed companies, which often can't afford to take a larger risk? I'm asking that, not only after Anemi's deal, but also noticing Metrostar's deal with Genco of Mr. Peter Georgiopoulos and a few years back with Quintana Maritime?
I wish that this is the case, if indeed we all have found a way of doing business together! But seriously, when the market is that good, everything is possible. This so-called trend is dependent upon the market conditions. If we see a fall in the rates, then these deals won't appear for sometime in the future. Another thing has to do with the difference in prices between the cheaper newbuildings and the much more expensive operating vessels in the second hand market. You have to be able to seize any opportunity, instead of waiting for 2-3 years, until you take delivery of the vessels under construction.
How was it possible for a shipowner without a strong "base" of ships, to begin investing so heavily in the market?
Besides the all so necessary contacts with banks and investors, our main argument is that we do exactly what we say that we'll do. In all of our agreements with banks, shipyards or charterers, we are delivering everything that we promised. Of course, we had a small base of three older vessels, built between 1982 and 1989, which we sold in order to enter the business more actively. But our strength isn't management and operation of the vessels. We leave that to experts, which assign for the job. As a result we don't dedicate so much of our time and resources into management, thus leaving more room to design a strategic investment, like prepare a big shipbuilding order. So, after selling these three ships, we bought four younger vessels, which we also sold later on, when the market was high and began investing more heavily in newbuildings. The shipyard we went to was relatively new, which meant that they needed some training, something we provided. But we also learned from them, as well as the classification society, attaining the proper experience to pursue larger goals. This was the first successful deal, which was the "prologue" to Anemi Maritime. By that time, we had established a good reputation which all parties involved, making things a lot easier for us.
Do you believe that in today's shipping market, characterised by consolidation, leaves room for the survival of small shipowners?
Of course there is room, but one has to take bigger risks and greater chances by investing more money in the market. If he's prepared to take that risk, he can grow, there's nothing secret about that. We've seen that happening. That's what we did, by taking advantage of the positive market conditions. I believe that there is still room for growth in the dry bulk market at least for the next couple of years. But there are also opportunities in the wet sector, with the market there taking a plunge. I am talking not only for the product tankers, but also for the crude carrying aframaxes.
Where can be attributed this record dry market?
First of all, it's a matter of offer and demand, but also a matter of positive sentiment. We noticed a slight downfall during the summer months, when the market traditionally is quieter, but we see now a recovery to record levels, which will continue like that at least until the end of the year, especially in the capesize market, which after all drives the whole market. In this category is where everybody is investing these days, with large numbers appearing, assets growing constantly, thus providing resale opportunities even within one single year. Another important factor is that most big and well-known charterers are present in the capesize market, making it easier to work with them, but also providing extra insurance to the banks that finance the investment.
Are you considering a possible IPO of Alba Maritime, given the fact that you have created a rather interesting "story" to sell to the potential investors?
We must have that thought on our minds. For now though, our primary concern is to finance this programme mainly through bank loans and then operate the vessels. To be honest with you, we don't believe that an IPO is what we'll be looking for in the future.
What about Athens Stock Exchange? Will we see Hellenic shipping companies choosing this market in the future to finance their activities?
My answer to that is undoubtedly yes. In fact, we'll see not only big companies, but also smaller ones, provided that the proper formula is designed.
Nikos Roussanoglou,Hellenic Shipping News