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Lambros Papaeconomou

 
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  • Safe Bulkers: Would Low Valuation Lead To A Management Buyout? [View article]
    Enrique,

    Thank you for the feedback. The lower the stock price gets and the longer the freight market stays depressed, the higher the likelihood of a management buyout.

    Successful ship-owners buy low and sell high. Except when they sell high and then buy low.
    Dec 19 12:50 AM | 1 Like Like |Link to Comment
  • Safe Bulkers: Would Low Valuation Lead To A Management Buyout? [View article]
    Robert,

    Thank you for the correction. The annualized dividend should read 6.3%.
    Dec 15 07:07 AM | Likes Like |Link to Comment
  • Assessing The Risk Exposure Of Safe Bulkers [View article]
    The $20-$25 million per vessel is probably based on a charter-free valuation. You should add the value of the period deals to your NAV calculation. I have been researching a new piece on SB and hope to publish it soon.
    Dec 5 08:50 AM | Likes Like |Link to Comment
  • Assessing The Risk Exposure Of Safe Bulkers [View article]
    Asset write downs will have a psychologically negative effect, however stock prices reflect (or should reflect) current market values and not book values. Watch this space; I will be publishing a full valuation article on Safe Bulkers this week.
    Nov 26 08:14 AM | 1 Like Like |Link to Comment
  • Assessing The Risk Exposure Of Safe Bulkers [View article]
    Regarding Maritsa & Marina being on T/C to Daiichi, what is the source of your information? If just a guess, I would not want to assume that every long-term deal is with one charterer. Also for these two charters make sure you take into account the current cash rate and not the average T/C rate recognized in the books.
    Nov 19 12:55 PM | Likes Like |Link to Comment
  • Overseas Shipholding: Rumors Of Its Financial Demise May Not Be Greatly Exaggerated [View article]
    Why are OSG’s shares currently trading between $0.60-$0.70 over the counter? (new stock symbol OSGIQ)
    Nov 15 11:45 AM | Likes Like |Link to Comment
  • Overseas Shipholding: Rumors Of Its Financial Demise May Not Be Greatly Exaggerated [View article]

    Tomorrow is the beginning of the last chapter in this saga. OSG just filed a notification of late filing for its third quarter 10-Q report. Please see below.

    http://1.usa.gov/QF7bMk

    I don’t know first hand whether failure to produce timely financial statements constitutes by itself a breach of the company’s loan agreements.
    Nov 13 07:38 PM | Likes Like |Link to Comment
  • Assessing The Risk Exposure Of Safe Bulkers [View article]
    Thank you very much for your note and calculations.

    The exposure figure in my article ($41 to $45 million) was stated on an annualized basis. What does that mean you may ask. I estimated that the total exposure was $58 million as of December 31st, 2012 (Which is pretty close to your estimate of $59.5 million). The average charter duration as of that date is 1.39 years. By dividing these two numbers, I came up with the average exposure on an annualized basis.

    I apologize if I did not explain how I estimated the annualized exposure better, or did not include the total estimated exposure in my article.

    Now with regards to SEC filings, my understanding is that companies are required to disclose (in their annual and quarterly reports) whether they have major customers, each generating more than 10% of their annual gross revenues. Some shipping companies (for example SB) also elect to disclose the actual names of their major customers. Other shipping companies (for example EGLE) keep the identities of their major customers confidential.

    Apart from SEC rules, many shipping companies choose to disclose more details of their charter deals, but I have found from experience that the level and quality of disclosure varies greatly from company to company.

    I cannot tell with certainty that the Daiichi legacy charters are the only charters that SB has with Daiichi at this moment (I suspect not). I sincerely hope that some analyst, or myself if given the opportunity, will ask the question in the upcoming earnings conference call.
    Nov 2 10:45 AM | Likes Like |Link to Comment
  • Overseas Shipholding: Rumors Of Its Financial Demise May Not Be Greatly Exaggerated [View article]
    I don’t know the structure of the particular pool to be able to help you. As broad guidance, a shipping company in financial distress should not have a problem trading its own vessels in the spot market, since it is being paid to provide the transportation service. But it may have to deal with tighter credit terms for vessel supplies, bunkers, etc.
    Oct 25 10:15 AM | Likes Like |Link to Comment
  • Overseas Shipholding: Rumors Of Its Financial Demise May Not Be Greatly Exaggerated [View article]
    I would start by reading the IPO prospectus, and in particular all pages regarding the market structure of the industry. For your guidance, CPLP & NNA had relatively recent IPO’s.
    Oct 25 10:09 AM | Likes Like |Link to Comment
  • Overseas Shipholding: Rumors Of Its Financial Demise May Not Be Greatly Exaggerated [View article]
    Based on my notes and the company’s press release for the quarter, DHT has two vessels on time charter with OSG (OVERSEAS CATHY & DHT ANN) that will be redelivered during the next six months (Jan & Apr 2013). In addition DHT has two vessels on bare-boat charter with OSG (OVERSEAS LONDON & OVERSEAS NEWCASTLE). One of the bare-boat charters expires in 2014 and the other in 2018.
    Please also note that DHT took a $92.5 million impairment charge on the carrying value of its fleet, to reflect the recent announcement by OSG regarding its solvency and the continued weak tanker markets.
    Oct 25 10:01 AM | Likes Like |Link to Comment
  • Overseas Shipholding: Rumors Of Its Financial Demise May Not Be Greatly Exaggerated [View article]
    OSG has plenty of cash (its proforma cash position as of June 30th was in excess of $550 million) to fund its day-to-day operations and CAPEX requirements for the year. So it has flexibility when to file for bankruptcy, should it decide to go down that way. The $1,500 million facility matures in early February of next year, so we have ways to go. OSG is also required to file its 9-month interim report with the SEC by November 10th (40 days after the end of the fiscal quarter). If it must disclose non-compliance with loan covenants, or chooses not to file a timely report, then game will be over.
    Oct 24 09:16 AM | Likes Like |Link to Comment
  • Overseas Shipholding: Rumors Of Its Financial Demise May Not Be Greatly Exaggerated [View article]
    I do not cover NNA or CPLP and would not want to offer an opinion. But I notice that CPLP has three vessels on bare-boat charters to OSG expiring in 2018, that is they still have approximately 6.5 years to go. The bare-boat rate is $13,000 per day (or if you like the equivalent TCE rate is about $21,000+/-). If OSG files for bankruptcy protection there is a high risk these charters will be repudiated by the trustee. That will not be good news for CPLP.
    Oct 24 09:00 AM | 2 Likes Like |Link to Comment
  • Overseas Shipholding: Rumors Of Its Financial Demise May Not Be Greatly Exaggerated [View article]
    Unfortunately I do not have any NAV figures.
    It goes without saying that if you are a vulture investor, you are better off buying the bonds at a deep discount than the equity. But the risk regarding the tax issue has to be clarified first (please also read my comment below)
    Oct 23 01:29 PM | Likes Like |Link to Comment
  • Overseas Shipholding: Rumors Of Its Financial Demise May Not Be Greatly Exaggerated [View article]
    Barry,
    I have no insight as to what the value of OSG’s US-flag business may be.
    Now with regards to the tax liability, the $287 million mentioned above is probably the sum of “Deferred Gain on Sale and Leaseback of Vessels” and “Deferred Income Taxes and Other Liabilities”. As of June 30th, 2012 these two items amounted to a little over $287 million.
    However, I do not think that the tax issue is about the $287 million figure, which was known anyway. 
    OSG is a domestic corporation, and its international income is tax deferred (not tax exempt like almost any other publicly traded shipping company), but only to the extent it is re-invested in foreign assets and not repatriated.
    As of June 30th, 2012, OSG’s unrecognized deferred US Income tax attributable to its foreign operations was approximately $770 million. Please note that this figure is both deferred and unrecognized, i.e. it is not in the books. OSG could get away with it because it intended to permanently reinvest its foreign earnings. Perhaps the tax issue may have something to do with a portion of that $770 million unrecognized tax liability.
    Now, my guess about the tax issue may be as good as anyone’s. But I have to believe that it will somehow result in a deferred tax provision, and will further lower the company’s net worth in the books. This will put even more pressure on covenant compliance. That is why I think the $900 million facility may not be a done deal.
    Oct 23 01:16 PM | Likes Like |Link to Comment
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