Onassis snaps up capes as shipping exposure 'recalibrated' - 15/10/2014

Legendary name is back with a focus on secondhand acquisitions and retrofits

THE Onassis Group has acquired two capesize newbuilding contracts as resales, furthering an acquisition programme aimed at strengthening shipping’s relative importance among its business activities.

The latest purchases bring to 15 the number of vessels the group has acquired in the space of about 12 months, rejuvenating its tanker fleet and re-establishing itself in the dry bulk market.

It has always operated dry cargo vessels – with the exception of the last couple of years after selling a series of veteran handysize bulkers – although this has often been obscured by the group's reputation as a big tanker owner.

The two 180,000 dwt newbuildings, though, will be the first ever foray into the capesize segment by group shipping arm Olympic Shipping & Management.

The owner confirmed the acquisition to Lloyd's List, but declined to name the yard or previous owner, citing confidentiality agreements. However, it is believed likely that the two vessels are being built in Japan.

Prior to the two capesizes, the Olympic-managed fleet stood at 20 vessels — 13 tankers and seven bulk carriers — up from a low of 12 units last year.

The group opted to “take a pause”, in management’s words, during the boom years and shipping slipped to third place behind real estate and asset management as a proportion of the Onassis Foundation's overall business activities.

The current fleet tally does not include its investments in two joint ventures, also recent.

Since 2013 Onassis has emerged as a major investor in Peter Livanos-controlled liquefied natural gas carrier owner, GasLog, in which it currently has a stake of 8%. It has also taken a smaller shareholding in recent master limited partnership spin-off GasLog Partners.

Pangaea Logistics involvement

Separately, Onassis is also a partner in a three-way joint venture owning three Oshima-built ice-class panamax bulkers and another three currently under construction.

The six vessels are under the auspices of a partnership with newly Nasdaq-listed Pangaea Logistics and a major trading house, but Olympic will manage two of the newbuildings itself.

“We are a traditional shipping company,” said Onassis Foundation president Anthony Papadimitriou. “We have always been in shipping and hopefully we always will be.”

Throughout its history the group, founded by legendary tycoon Aristotle, has focused almost entirely on newbuildings. But the last new delivery was 10 years ago and, according to Mr Papadimitriou, by 2012 shipping had sunk “too low” in comparison with the foundation’s other business areas.

“We decided to recalibrate the three business activities,” he said.

The foundation, which was created after the death of Mr Onassis in 1975 and inherited half of his fleet, also decided that now the balance of risk and opportunity favours good-quality secondhand vessels.

In the last 12 months four very large crude carriers have been acquired – two 2005-built tankers from American Eagle Tankers and two from Today Makes Tomorrow’s Chapter 11 sell-off.

The former TMT ships are the 2011-built Fortune Elephant, now sailing as Olympic Light, and the 2010-built B Whale, renamed Olympic Luck. The Greece-based owner made bids for two other TMT VLCCs but was not successful, despite reports to the contrary.

In addition two 2008-built aframax tankers have been acquired from D’Amato. At the same time, three older tankers have been sold.

On the dry side, prior to the capesizes the group purchased three kamsarmaxes from Korea Deposit Insurance and it has also acquired four supramaxes.

Olympic has been retrofitting all the newly-acquired and younger existing vessels to improve fuel efficiency.

“The aim is to ensure the ships are very competitive in terms of fuel consumption and we have good results so far,” said Mr Papadimitriou.

He said that the results were “very comparable” to newbuildings.

Although the secondhand route seemed a more attractive proposition as an investment, in the current climate the group also wanted to avoid adding to the new orderbook.

With the latest acquisitions, Onassis has achieved its overall aim of rebalancing its business so that shipping, real estate and asset management each represent about one-third of its portfolio.

But it is not ruling out further acquisitions. “We are looking at opportunities,” said Mr Papadimitriou. “If we find investments that we believe are opportunities, we would consider them very seriously”.

in www.lloydslist.com 15/10/2014