Mr. Diran Majarian

GLG News by Mr. Diran Majarian, Managing Director

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Diamond S. a new business model for shipping?

August 17, 2011

Analysis of:Diamond S getting that OMI feeling | www.tradewindsnews.com

The Diamond S deal with Cido for a US$ 1 bn block purchase of product tankers has been the talk of the town, especially with the involvement of 'King of Bankruptcy' Wilbur Ross who has decided to enter shipping and bankroll a large portion of this project. From the feel of this venture backed by private equity First Reserve and Ross, it seems more likely to be a flip over asset play rather than an effort to create a long-term shipping business like TeeKay with intrinsic value.

NewLead in forced asset sales

August 17, 2011

Analysis of:NewLead in struggle to stay afloat | www.tradewindsnews.com

NewLead is reported to be offloading the 135,000-dwt Newlead Spartounta (built 1989) and the 34,700-dwt Newlead Prosperity (built 2003) after breaching a loan with FBB-First Business Bank. They recently hired the Moelis & Company and Fried, Frank, Harris, Shriver & Jacobson to help it fight its debts, which stand at US$ 581.9 mio. The bad news adds to an ever longer list of struggling shipping companies: TBSI, Omega, Top Ships, Zachello, etc. selling assets or fighting with their creditors.

TOP Ships: a lemon or an Apple?

August 4, 2011

Analysis of:Top issue on hold | www.tradewinds.no

Top Ships is probably the antithesis to Apple. Apple CEO Steve Jobs was a Reed College drop out who could not live in a structured environment and became a creative entrepreneur for new products. Jobs made millions for himself and his shareholders. Apple is now trades at US$ 384. Evangelos Pistiolis has gone from one ill fated business decision to another. TOPS is currently trading at US$ 2,59 after two reverse splits and just announced US$ 103 mio quarterly losses - a spectacular lemon!

Does the CIDO deal mean tanker values are on the upside?

August 3, 2011

Analysis of:Stevenson's spur | www.tradewinds.no

Jonathan Chappell argues that Craig Stevenson's massive US$ 1 bn product tanker acquisition deal to purchase the 30-vessel CIDO fleet is good news for tanker asset values. He estimates a US$ 40 mio price tag per vessel up from his previous US$ 36-37 mio valuation for a three year old tanker. He believes that supply and demand will improve in this sector this year and in 2012 seeing this a 'smart money' deal. I am more skeptical.

Omega in bankruptcy: Test case for other weak listed shipping companies

July 26, 2011

Analysis of:Omega filing stokes row about banks | www.tradewinds.no

Omega Navigation (NASDAQ: ONAV) is a product tanker play with fleet of 12 vessels plus a joint venture with Glencore . Most of its fleet is on time charter to Glencore. The fleet is divided between MR and LR 1 units all built in Korea. The company only had really one good year in 2007. It was hard hit by the 2008 meltdown. It had been filing for delays in publishing accounts, but known to be in protracted debt restructuring and suffering from high leverage.

TBSI: dry parcel liner service beleaguered by losses and financial problems

July 26, 2011

Analysis of:TBS boss going full out with $7.58m equity buy | www.tradewinds.no

TBSI has recently been under pressure with operating losses of US$ 16,7 the first quarter this year and senior lender pressure to increase capital by US$ 10 mio coming. When TBSI went public through Jefferies under John Sinders in 2005, its chequered history of its 2000 Chapter 11 reorganization surfaced. The company operates a parcel liner service with a large number of tween deckers and heavy presence in Latin American ports, an unusual trade largely superseded by container vessels.

Greek economic crisis in a nutshell

July 5, 2011

Analysis of:Partying on the Edge of the Eurozone Volcano | www.economonitor.com

The Greek crisis is a toxic mixture of politics and economics. The show case Eurozone project is in jeopardy by the looming sovereign default of one of their members. Greece made a Faustian Pact with the European Union that allowed its political elite to freeload the system, using EU transfer money and cheap credit to buy local political patronage rather than building a sound goods and services economy. The Euro destabilized the balance of payments. Local production waned and imports soared.

Top Ships revisited in recent bulker sale

July 5, 2011

Analysis of:US-listed Top Ships is said to have sold the 76,000-dwt Astrale (built 2000) to an undisclosed buyer for $23m. | www.tradewinds.no

Top Ships recently sold the 'Astrale' for US$ 23 mio, which seems low compared to the recent sale of a sister vessel. They bought this unit in August 2007 for US$ 72 mio (peak boom-era prices) in hopes of diversification to dry cargo in response to massive losses that they were taking on the tanker fleet. This company became a penny stock. I was among the first to signal the risks in an article in April 2008. Events so far appear to have vindicated my views.

Awilco LNG listing with promising business plan

July 4, 2011

Analysis of:Awilco readies LNG listing | www.tradewinds.no

The AWILCO LNG start-up is attracting investor interest from blue-chip investors. The Awilco Group of the Wilhelmsen family in Norway is well known for Wilhemsen Marine Services, a major ship management company as well as their investment in Royal Caribbean Cruises. The business plan to enter the LNG market was conceived last fall. They made a debut in March and April this year purchasing three elderly LNG units from NYK LNG. In June, they closed an order at Daewoo for two new LNG units.

Shake up at Dahlman Rose

July 4, 2011

Analysis of:Rose retires from Dahlman | www.tradewinds.no

Dahlman Rose, a premier shipping growth story, has seen a major management shake-up. The firm is undergoing senior management changes with Simon Rose retiring and Kim Fennebresque, replacing him as chairman. His partner Ernie Dahlman opted out as a manager a month earlier to devote his time to sales and trading. They also lost their top equity analyst, Omar Nokta. Dahlman Rose faces some serious challenges ahead.

Wall Street investment banking firms face bear market in shipping issues

July 4, 2011

Analysis of:IPOs are dead but bankers keep busy | www.tradewinds.no

The IPO market this year is dead except for LNG and containerships. Latest containership issues for the Diana and Paragon spin-offs have barely been placed. Only the TK LNG Partners and Golar LNG issues went well. Public-equity issuance in the first six months of the year — which includes follow-on shares sales and IPOs — fell 51% from last year. This is creating stress on the investment banks (and their managers) active in shipping deals.

PT Arpeni Pratama staves of bankruptcy: Pyrrhic Victory?

June 28, 2011

Analysis of:Arpeni victorious | www.tradewinds.no

Just months after Arpeni narrowly staved off bankruptcy proceedings last October initiated by Korea Securities for US $2.25 mio, Keppel yard arrested a half-converted FSO project over unpaid bills. The Group is in technical default on principal repayments of debt obligations with its senior lenders. It has been discussing an acquisition plan with Saratoga Capital and it has appointed N.M. Rothschild as financial advisors. Is Arpeni insolvent and beyond the brink?

Lack of transparency and honesty in the EU on bailouts

June 23, 2011

Analysis of:Quo vadis, Euroland? European Monetary Union between Crisis and Reform | MPI for Collective Goods | www.coll.mpg.de

The Eurozone crisis is largely a hidden banking crisis rather than a currency issue per se. Europe has a chronically undercapitalized banking system of which the Germans are among the largest offenders. EU politicians have addressed this as a liquidity problem with its Periphery in order to hide these issues and avoid any open discussion on the ultimate costs involved in transferring risk from the financial industry to public balance sheets and ultimately to EU taxpayers.

Debate and shaky start for Diana containerships IPO

June 22, 2011

Analysis of:Latest offering puts solid bulker owner Diana on 'shaky' ground on box front | www.tradewinds.no

Diana Containerships (NASDAQ: DCIX) recently completed a US$ 107 mio follow-on shares offering in New York last week at a steep discount to the company’s net asset value (NAV) and its previous share price. This new IPO follows the Paragon/ Boxships offering and has many of the same inherent defects as a pure asset speculation play rather than a coherent entry into the containership business.

Seaspan aiming for another giant containership order

June 22, 2011

Analysis of:Seaspan in ultra-big box gambit | www.tradewinds.no

After penning a US $2.5 bn deal at China’s Jiangsu Yangzijiang Shipbuilding for seven firm 10,000-teu vessels plus 18 options and then inking a letter of intent for 10 vessels of 14,000 teu at STX Offshore & Shipbuilding plus 10 options at $140m apiece, Seaspan is showing interest in 18,000-teu vessels and has approached South Korea’s Daewoo Shipbuilding, Hyundai Heavy Industries and Samsung Heavy Industries. There are never enough container vessels deals for its CEO Gerry Wang!

More woes for Genmar shareholders in potential ATM share offering

June 22, 2011

Analysis of:Dilution jitters in Genmar approach | www.tradewinds.no

General Maritime (NYSE: GMR) stumbled badly last year in the timing of its massive Metrostar(BAK:METRO-F) block tanker acquisition deal. Earlier this year, it made a US$ 200 mio recapitalization agreement with Oaktree Capital for needed funding. Now Genmar management is considering an additional US$ 50 mio ATM share offering for additional liquidity.

Berlian Laju losses widened significantly in 2010

June 22, 2011

Analysis of:BLT stretches loss | www.tradewinds.no

Berlian Laju Tankers (BLT) delays in releasing latest corporate earnings never boded well for investors There is a lot of money out on this too big to fail company with its recent massive US$ 685 mio senior debt restructuring by a 6-bank consortium plus a US$ 90 mio sale leaseback deal with Standard & Chartered (S&C). What if these lenders are wrong on their turnaround story and market recovery does not come as anticipated?

Does Greece have more leverage with the EU than perceived?

June 22, 2011

Analysis of:naked capitalism | www.nakedcapitalism.com

As the EU dithers in interminable discussions, it seems to be digging themselves into an ever bigger hole. Yesterday acting IMF head John Lipsky told them to cut short debate on private sector involvement. US authorities seem terrified of a Greek default event. Likewise the ECB trembles at the mere reference of the 'R" word. In this backdrop, what if Greece turns down the new bailout facility, refusing to accept more austerity, shrinking GDP, massive unemployment and rising public debt?

Greece and EU: Glasnost and viable policy decisions

June 16, 2011

Analysis of:Sugarcoating a Bitter Pill: Can EU Policy Makers Agree on Greece? | www.roubini.com

Time for coherent policy in Greece based on three propositions: 1.) urgent need to restructure national debt to avoid disorderly default 2.) need to reduce public expense and restructure the public sector for a developmental model based on direct private investment and 3.) new EU/ EZ/ ECB monetary policy that addresses the EU Periphery rebalancing needs or a departure of the EZ periphery to flexible exchange rates with the Eurozone restricted to Core members, so their straight jacket is removed.macromarketmusings.blogspot.com/2011/06/ecb-monetary-policy-mess-in-one-picture.html

Stolt in enviable position to issue bonds and lower its cost of capital

June 10, 2011

Analysis of:Stolt-Nielsen places bonds | www.tradewinds.no

Stolt Nielson is chemical tanker leader with a strong contract base, consistently good P+L results and moderate financial leverage. They recently tapped the bond market to fund expansion opportunities and raise general corporate funds. After a swap, this results in a low fixed-rate US Dollar obligation. How are beleaguered peers like Eitzen Chemical and Berlian Laju Tankers (BLT) under the weight of their heavy debt loads/ leasing obligations with high finance costs going to compete with Stolt?

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