“From our experience I can say for sure size matters,” Spyros Capralos, chairman of Star Bulk, told the Marine Money Asia conference in Singapore.
Star Bulk has become the largest US-listed dry bulk shipowner with a fleet of 103 through its mergers and acquisitions of Oceanbulk and Excel Maritime backed by private equity investor Oaktree Capital, which is also its largest shareholder.
According to Capralos much enlarged size of Star Bulk has lowered its cost of finance, enabled it to have a stronger bargaining position with its suppliers and given benefits of economies of scale.
He also said it provided “a good opportunity for investors as our liquidity goes up”. Star Bulk’s market cap is now around the $1bn mark.
Capralos also backed the role of private equity in shipping and as having more of a long term horizon than investors such as hedge funds. “The good thing about private equity is they have a five to seven year timeline” As a result private equity are willing to wait for the right time to realise their investments.
“They are different from hedge funds, they are very particular, they need to make returns for their investors,” he stated.
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