Navios companies also appear to be pursuing a similar strategy.
Two Greek shipping companies appear to be pursuing similar strategies of segregating their fleets of container and dry bulk ships.
Euroseas Ltd. said Tuesday it will split into two companies, one devoted to the dry bulk business, the other to container shipping.
The Euroseas announcement comes on the heels of one by Navios Maritime Partners, another Greek shipping firm with a mixed fleet of dry bulk and container ships. It said that in April it had sold two of seven container ships to a sister company Navios Maritime Containers Inc. NMCI or “Navios Containers”is part of the larger Navios Group of companies that own 39.1 percent of its stock. Navios Containers was created last year to acquire 14 ships from the insolvent Rickmers Maritime Trust and has been purchasing other container ships from banks and other owners.
Both companies are publicly traded, and the investment bank Jeffries said it expected Navios Maritime Partners “will continue to ‘drop down’ its five remaining container ships to NMCI in the coming quarters while also pursuing additional dry bulk vessel acquisitions.”
Euroseas has a fleet of seven dry bulk vessels, with capacities ranging from 46,667 deadweight tons to 82,000 dwt and 11 container feeder ships with capacities between 1,169 TEUs and 2,788 TEUs.
The separation of Euroseas into two companies will be accomplished by spinning off the dry bulk fleet into a new company called EuroDry Ltd.
Aristides Pittas, chairman and chief executive officer, said, “We believe that separate dry bulk and container ship investment options will give our shareholders the flexibility to adjust their holdings, if they so wish, between the two sectors. We also anticipate that the creation of sector-focused companies will allow the capital markets to appreciate the value that our public platforms can create as consolidators in their respective fields.”
Pittas also said that the company believes “both EuroDry and Euroseas will trade much closer to their net asset value, like their peers, than the combined company does now.”
He said, “We plan to take advantage of growth opportunities in each of the two sectors to increase the size of each respective company as we believe that they are both well positioned to do so both in terms of their capital structure and their contract mix. Each of them being a public company with a cost-effective operating structure could be attractive to other small or large private fleets looking for opportunities to engage in transactions with acquirers.”
In April, Navios Containers agreed to acquire from Navios Maritime Partners the YM Utmost and YM Unity, two 2006-built container ships each of 8,204 TEUs for an aggregate purchase price of $67.0 million. In March it acquired a 2010-built 10,000-TEU container ships from an unrelated party for $50.25 million. The company said it expected delivery of all three ships in the current quarter. Prior to the purchase of those ships, Navios Containers had a fleet of 22 container ships, all smaller, with capacities ranging from 3,450 TEUs to 4,730 TEUs.
In the first quarter of 2018, Navios Containers had a profit of $3 million on revenue of $29.9 million.
Meanwhile, Euroseas said it had a net loss of $3.2 million in the first quarter of 2018 on revenues of $12.9 million compared with a net loss of $2.2 million on revenue of $8.3 million during the first quarter of 2017.
Pittas said revenues rose “following the continued improvement in both dry bulk and container markets,” and attributed the loss to the expense of having ships in drydocks during the quarter.
“We expect both sectors to continue to register positive results in the future if the markets maintain their current levels and the company to revert to profitability for the remainder of the year,” he said.
Euroseas segregating dry bulk, container fleets
