In a conference call with investors, Pittas said the New York-listed operator of bulkers and boxships doesn’t have any deals in the pipeline but hopes to pull the trigger in the months to come.
“We think that the prices are really at the lowest that they have ever been right now,” the executive told investors and analysts, adding: “I think that this environment may continue for another six, seven months or so.
“We have to use the limited resources that we have in buying the best deals that we can find. So we are not in a tremendous hurry to invest, but we do believe that we will invest both [through] [Euroseas] and Euromar, [which] is mainly looking at containers ships at this point.”
Pittas said Euromar, a joint venture with Eton Park Capital and Rhone Capital that controls ten containerships, has about $44m at its disposal for “further acquisitions and other corporate matters” going forward.
When Michael Webber of Wells Fargo asked about the state of the S&P market he noted they have seen “an abundance” of “elderly” ships, a term he used to describe tonnage that is between 15 and 20-years-old, at prices close to scrap value with no charters attached but not many “modern” units.
When pressed about whether Euroseas and Euromar were keeping an eye on panamaxes and larger asset classes with higher utilisation rates Pittas said “yes” and indicated that there “have been discussions” about shifting gears and breaking into new size segments.
“Yes, we are having some discussions to do something on a different scale but these are very preliminary discussions so I can’t say that there is any conclusions there or any agreements there,” he explained.
“We are obviously looking at various options available. We do think that it makes sense for people to be buying containerships today, yes the younger ones as well but you need more equity to do that and we don’t currently have it.”
Observers tell TradeWinds that there is “no shortage” of private equity companies and hedge funds that would consider teaming up with Euroseas, and certain competitors with strong reputations, if they needed cash to pursue fleet expansion by exploiting the decline in prices.
While Pittas applauded the partnership with Eton Park and Rhone Capital, critics are quick to point out that asset values have “deteriorated significantly” in the years following the launch of the 2010 alliance and believe the Wall Street duo’s debut may have been “somewhat premature”.
Euromar’s fleet of containerships boasts an average age of 9.3 years and a combined carrying capacity of around 24,289 TEU, according to a fourth-quarter earnings presentation that can be read in full by clicking on the link located to the right of this article.
