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Lambros Papaeconomou

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  • Overseas Shipholding: Rumors Of Its Financial Demise May Not Be Greatly Exaggerated [View article]
    OSG is an asset-rich company operating in several business segments (crude carriers, product carriers, lng, US-flag vessels/barges, to name a few). The equity may prove to be worthless, but I do not anticipate a company-wide wholesale clearance.
    Oct 23 11:43 AM | Likes Like |Link to Comment
  • How To Make Sense Of EBITDA In The Shipping Industry [View article]
    I like to think that a company is conservative (or fiscally prudent if you like) when it takes steps to manage a particular risk or exposure.

    For example, SB is conservative when it comes to interest risk, because it has fully hedged its interest rate exposure using interest rate swaps.

    Another example, SB is conservative regarding its operating costs, because it has been among the lowest cost providers in the industry.

    Now when it comes to its dividend policy (which I personally like), many people have expressed frustration that SB has not taken a more conservative approach to conserve liquidity. Remind you that SB has done three secondary offerings during the past three years to finance its new-building program. So paying a dividend comes with a cost too.
    Oct 19 09:19 AM | Likes Like |Link to Comment
  • How To Make Sense Of EBITDA In The Shipping Industry [View article]
    I will give you an example. If you own (or otherwise commercially control) one vessel for the whole year, then you have 365 ownership days at your disposal to trade the vessel and earn revenue. You may also see the term revenue days, which means the same thing.
    Oct 17 08:54 AM | 1 Like Like |Link to Comment
  • How To Make Sense Of EBITDA In The Shipping Industry [View article]
    I like to think that increasing natural gas production in the US will come at the expense of domestic coal production and crude oil imports. That is bad news for tankers and possibly good news for dry cargo vessels in case domestic coal finds a destination overseas.

    The potential for slower Chinese growth is real and perhaps not fully priced yet in shipping stocks. If you have time you may want to read today’s WSJ article regarding Iron Ore prices and deceleration in China’s economic growth

    http://on.wsj.com/R0ODV0
    Oct 15 09:43 AM | Likes Like |Link to Comment
  • Safe Refuge In A Shipping Portfolio [View article]
    Thank you for the note. I agree that financing a new-building program and paying a dividend at the same time, has led to the past secondary offerings. Also, a future secondary offering cannot be ruled out. It really depends on the timing of capital out-lays, cash flow from vessels operating in the spot market, and how much debt leverage the company wishes to have.
    Sep 21 11:07 AM | Likes Like |Link to Comment
  • Assessing The Risk Exposure Of Safe Bulkers [View article]
    Daiichi is a much better signature and in a different league than Sanko or Korea Line. Also one of Safe Bulker’s strength has been its relationship with “Japan Inc.”. SB has ordered most of its new building vessels in premier Japanese shipyards, it has been able to obtain long-term low cost financing from the Japan Bank for International Cooperation when other ship-owners struggle to get financing at any terms, and it has relationships with Japanese charterers that any ship-owner will covet.

    But to render unto Caesar the things which are Caesar’s, I would like some more clarity from the company where it stands with these charters, and the rest of its long-term deals.
    Sep 21 10:59 AM | 2 Likes Like |Link to Comment
  • Assessing The Risk Exposure Of Safe Bulkers [View article]
    If you have some free time, I recommend that you read my previous article on Baltic Trading Ltd. for a good insight on the company. SB and BALT are two different animals in terms of risk/reward profile, but are both worthy for consideration in a diversified shipping portfolio.

    http://seekingalpha.co...
    Sep 21 10:28 AM | 1 Like Like |Link to Comment
  • Assessing The Risk Exposure Of Safe Bulkers [View article]
    I am long SB because I like the company’s business strategy, management, and low operating cost. But like any investment, I have to do my due diligence and assess what risks I am assuming.
    Sep 19 04:31 PM | 3 Likes Like |Link to Comment
  • Safe Refuge In A Shipping Portfolio [View article]
    Thank you for the note. I will follow up on the company's credit exposure.
    Sep 19 09:11 AM | Likes Like |Link to Comment
  • Safe Refuge In A Shipping Portfolio [View article]
    Safe Bulkers has its two cape size vessels on long-term charters (M/V Pelopidas until 2021, and M/V Kanaris until 2031). It also has another one under construction, scheduled for delivery later this year, that has a 10-year T/C attached. Do you know if Daiichi has chartered any of these vessels?
    Sep 18 10:08 AM | Likes Like |Link to Comment
  • Safe Refuge In A Shipping Portfolio [View article]
    You are absolutely right. Stock awards, on top of already generous cash compensation, have been a major concern for me too. I have been just as critical in my article, and have described in detail the dilutive effect of stock awards on shareholders.
    Sep 11 08:40 AM | Likes Like |Link to Comment
  • Safe Refuge In A Shipping Portfolio [View article]
    Do I get a prize if I answer correctly? I would say senior secured notes with no convertible features do not dilute shareholders if debt is repaid, but if company is liquidated or goes belly up they have a senior claim to common equity.
    Convertible senior secured notes will dilute shareholders if conversion price is in the money (i.e. conversion price is lower than the stock price). I assume in this scenario that note holders will act rationally and convert their notes. They also have a senior claim to common equity in case of liquidation, bankruptcy, etc.
    Not to be a stickler but senior notes (convertible or not) are usually unsecured. That was the case with General Maritime where the note holders got just a few pennies on the dollar (of’ course the shareholders are still holding the bag)
    Sep 10 03:58 PM | Likes Like |Link to Comment
  • Safe Refuge In A Shipping Portfolio [View article]
    I did not mean to put you on the spot regarding the order book figures. I am amazed that there should be such discrepancy between RS Platou and BRS (Two of the most prestigious ship-broking firms). But order book data are always subject to major revisions, especially if you are looking beyond the next 12 to 16 months. Many orders are really options that may or may not be declared. Many firm orders can be converted to different types of vessels. Shipyards may make room for an extra berth here and there and so on. Only after the keel is laid and the construction has begun, can we be sure that the vessel will be delivered (perhaps not to the owner who placed the order, but this is irrelevant with regards to supply).
    I also owe you a reply regarding shelf registration. Shelf registrations are subject to rule 17 CFR 203.415 (or simply rule 415). Rule 415 stipulates (among several other provisions) that shelf registration statements must be filed every three years for certain offerings, including securities to be sold on an immediate, continuous or delayed basis.
    Sep 10 12:34 PM | Likes Like |Link to Comment
  • Safe Refuge In A Shipping Portfolio [View article]
    The numbers are what they are. I must confess (and I have alluded to this in my article) that I like how DSX executes its business plan, but it runs one expensive operation.
    Sep 7 09:36 AM | Likes Like |Link to Comment
  • Safe Refuge In A Shipping Portfolio [View article]
    According to Platou, the total order book as of the end of August was 1,978 vessels, consisting of 1,483 bulk carriers and 495 tankers. Ramisle must have mixed his numbers up, but 1,483 vessels is still a tall order.
    Sep 6 09:41 PM | 1 Like Like |Link to Comment
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106 Comments
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