Frangou: We could buy dry and layup

Greek tycoon says option open to purchase bulkers and make money while they sit idle.

Angeliki Frangou raised the prospect of buying bulkers and placing them directly into layup after her Navios Maritime Partners yesterday abandoned its payout to investors in order to preserve some dry powder.

Frangou, chief executive of the MLP, told investors in a conference call that dry cargo vessels were available second hand at unique prices and boxship buys were also an option.

“Today you are looking at the BDI 40% below the 30 year low,” she said.

“If you realise that we are not going into a global recession and the world won’t be leaving tomorrow, these are assets that you can pick up at unique prices.

“We don’t have a liquidity issue and you can always buy vessels and even idle them if you want and have the capital appreciation. These are opportunities that we may see.”

Frangou noted that fleet deals with banks, which Navios has executed in the past, could involve a mixture of vessels some of which could be idled after purchasing.

Navios Partners is saving around $70m per year after chopping the payout, a decision which sent its shares crashing yesterday.

“An MLP without a distribution is not an MLP,” wrote Evercore ISI analyst Jonathan Chappell in a post-earnings report.

While Chappell said many of the reasons for suspending distribution were sound, the decision to completely eliminate distribution from an MLP structure with a shareholder base that almost only cares about yield is a curious one.

“Most existing holders will likely be forced by the mandates of their funds to liquidate positions,” he said.