Success in shipping means access to capital, and requires

Euronav has had recent success with its IPO, announcing an upsizing late last week to $230m, events that were fresh in the mind of delegates at the Marine Money conference in London today.

"It's not very effective for shipowners or people in shipping to look at the capital market and say 'what's wrong with them?' The capital markets are never wrong," Rodgers asserted, "The issue is what's wrong with us? What is it we're really selling? What should we be focussing on?"

For Rodgers, success is about capital - even in the personality and gossip focussed shipping industry, capital is the most significant factor in success. "The reality of a successful or an unsuccessful shipping company is down to access to capital, not to people, except to the extent that those people enable access to capital."

Rodgers identified the financial crisis of 2008 as a turning point for listed shipping companies, as it closed credit lines that used to be available to smaller shipping companies from high street banks. Such credit lines were leaving public shipping companies in the cold, as they could not access capital on any better terms. "The reality was you had no advantage from all of the transparency, organisation and administration of being a public company," Rodgers stated.

The collapse of these systems, the subsequent bankruptcies and bank exits from the area have not reduced the demand for capital however, which has to come from somewhere.

"We had a wall of money coming at us, not from earnings, but from private equity to finance fleet expansion. Classically the people that were encouraging that in were doing so for their own reasons."

Some of those private equity firms have now found that exiting the market is not as simple, with some shipowners unsuitable for public listing, and little liquidity in the sale and purchase market.

"It is easy to become a shipowner, and very difficult to stop being one," Rodgers quipped.

"Who can replace this? Where can we go next? I think public market can have a role to play. They are going to demand size. When you are big you attract liquidity and with liquidity people who won't have risked being a shipowner can now be a ship investor. They can buy and sell at any point in the cycle, it gives them the chance to say 'today I am going to be a shipowner.'"

The key to liquidity, Rodgers offered, is transparency. A company needs to be completely straightforward and honest about the way the whole business works.

"We as a tanker owner sell shipping services as a commodity. We don't know how much we are going to get for all this high quality work we do. We sell it, we net back and see if we've made a profit. That is a message every investor should know and understand; we can not guarantee a better return on their investment than the market will allow."

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Success in shipping means access to capital, and requires transparency, says Euronav ceo