Though the freight market is now more positive, the number of shipping companies finding themselves stretched for cash is also increasing. Further, banks are not lending the money which would enable struggling owners more breathing space or allow those in better shape to take advantage of the opportunities before asset prices begin to rise.
Indeed, sine the dawn of 2014, a week has not gone by without at least two, on occasion four, Greek companies has announced plans to go to the equity market for funds, usually to used funds pocketed for "vessel acquisitions". Any balance left invariably goes "for general corporate purposes, including working capital" and "the repayment of debt".
Though renowned analysts like Ted Petropoulos of Petrofin Research, rightly point out the equity markets will never replace traditional banking, outside investors are certainly filling a gap at the moment enabling companies to expand and upgrade when acquisition opportunities appear.
While, large financially strong public and private Greek companies can find some ship finance, in the first six weeks of 2014, Greek shipowner interests have tapped to equity market for over $1bn. Among those who have turned to investors are some of the industry's best known names. In all, Greek-linked companies have been involved in 14 raids so far in 2014, with at least three more imminent.
Latest to join the hunt is newcomer, Stalwart Tankers, which is set to go to investors with a prospectus to raised $100m on the NYSE to built a chemical tanker fleet.
The chemical transportation company maybe a new name, but its roots in shipping run deep. Stalwart is controlled by Ekaterini Lanara and Dimitrios Souravlas, part of the Lanaras clan. With an initial fleet of five ships, the company’s IPO filing says it plans acquisition of a further 11 units, including six newbuildings.
The company says it has signed a LOI with an unnamed South Korean shipyard for four 25,000 dwt eco-design newbuildings, an investment worth $174m with deliveries expected to begin in 2016. It also has the option to acquire an additional two sister ships for $87m with potential delivery in 2017.
With an initial fleet consisting of five ships ranging from 23,322dwt down to 11,560 dwt, built between 1994 and 2006, Stalwart said it intends to acquire five unidentified secondhand stainless steel tankers of between 20,000 dwt and 25,000 dwt, all built in Japan between 2005 and 2010.
Lanara, who was described as vice president and Souravlas as ceo own all of the company's issued and outstanding common shares. The two are also linked to Elmira Tankers Management, which has five chemical tankers, and Elmira Shipping & Trading, which has three general cargo ships and a ro-ro.
Stalwart says it is looking to take advantage of a market in early stages of a recovery from cyclical lows, and will also use proceeds from the IPO to repay debt.
Stalwart’s $100m target is average for Greek companies making raids on the equity market in 2014. Sums raised range from $29m to near $200m.
These have included in January, Peter G Livanos-led GasLog scooped $199m in an equity issue and private placement to help fund a $468m sale-and-leaseback deal with BG affiliate Methane Services. The Livanos / Marc Saverys-led Euronav also completed a $50m equity issue with shares sold to new investors.
Ever expanding Angeliki Frangou-controlled Navios Group has made two raids, with subsidiaries raising, $50m and $101m, with a third for $57m underway. Container ship owner Costamare / Costis Constantakopoulos grossed $100m through a public offering of 4m preferred shares.
Oslo-listed VLGC operator Dorian LPG / John Hadjipateras raised $100m through a private placement to finance its newbuilding VLGCs.