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Target Maritime Transport: Which owners are in trouble?

London: Following on from his enormously popular Contribution on this site yesterday, Maritime CEO decided it was high time to profile Panos Patsadas. The Greek national wrote yesterday about how many young men and women were mistakenly entering the world of shipbroking in the misguided belief that it might lead them into the rarified shipowning arena.

Patsadas founded Target Maritime Transport in London in June 2014. The company is a niche broker specialising in the project/heavy lift market worldwide and on the South American bulk market.

Patsadas is a keen watcher of shipowners and their moods.

“Prudent owners, who piled up the cash in the good days, see this as a period of opportunity, and there is plenty of good opportunities out there, especially for those looking to renew their fleet,” he says. These are typically owners with up to eight vessels, who have sufficient cash to keep a fleet of five vessels going for three or four years and a good chunk of cash left to buy a few new or modern secondhand vessels.

“The headache of covering opex still remains, nonetheless they posses the necessary liquidity to keep going and will survive,” Patsadas says.

Smaller owners have a different set of options. Patsadas explains they are faced with a choice of keeping two or three vessels afloat but risk having them withdrawn by the banks holding their mortgages for default on payments. Alternatively, they may choose to exit the market at a loss in terms of the investment, reserve the cash, and reenter the market at a later stage.

“The decision in this case is not always governed by reason, but also by ego,” says Patsadas.

Listed companies are the ones with the biggest problem Patsadas reckons. As their financial standing and longevity is very much tied to asset values, they not only have to fight a bad freight market, they also have the investors to answer to. A few Greek companies listed on the NYSE have been put on notice for failing to maintain a share value above $1 per share for more than 30 consecutive sessions. Some companies have been forced to sell assets to third parties, or resort to reverse splits to artificially raise share price, or in some cases the owners themselves had to purchase company assets from their private wealth as a means to inject cash and improve the cash-flow position of the companies.

“My view,” Patsadas says, “is that they are the most pessimistic as they have a number of fronts to fight on, and the bad freight market is only one of them.”

Large private Greek owners are “livelier”, he reckons.

“Aside from the fact that they have been in business for generations, and it is another cycle for them, they have diversified fleets, and the liquid or gas fleets at the moment are compensating for their dry counterparts,” Patsadas says.

In terms of what makes a good buying opportunities in 2016, Patsadas suggests supramaxes as they are very fragmented cargo-wise and are less reliant on China to prosper.

Any consideration for investment in project / MPP / heavylift vessels – a speciality of Patsadas – should be aiming at economic tonnage, medium capacity cranes, (up to 500mt combined) and hold / hatch openings in line with the next generation of windmill towers/ blades, which remain still one of the strong segment drivers.

“An eco MPP tweendecker vessel is a safe bet as it is versatile enough to take advantage of both the bulk as well as the higher paying project market,” he concludes.

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