2007

Looking Closer at Quintana, Glitnir & their $250 million Deal

Traditionally the use of sale leasebacks in shipping was limited at least in part by owners’ desire to keep free exciting and sometimes very profitable asset play opportunities. As more shipping companies are public, however, the value added by asset play has become more limited. Investors value stocks based on their expectations, and it is entirely unrealistic to think that the average public shipping equity investor will be able to anticipate how a shipowner will anticipate the unpredictable shipping markets and be able to assign a fair and reasonable value to the prospects of asset play and windfall profits.

As such it’s hardly surprising that we continue to see a divergence between the business of owning ships and the business of profitably operating ships. Quintana Maritime was the latest public company to get in on the game, with the seven-vessel sale leaseback done with Glitnir Finance it announced last week. In the transaction Quintana will sell seven of its oldest panamax for a price of $250 million vessels and take them back on 8-year bareboat charters at an average rate of $12,700 per vessel per day.

This is only an excerpt of The Week in Review – 07/12/2007

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