Evangelos Pistiolis, the Times Square-quoted
tanker and bulker owner’s CEO, says fears surrounding the company’s long-term
forecast are “laughable” and has no doubt about its ability to survive a
downturn that continues to wreak havoc on some of shipping’s brightest stars.
“Maybe some people want to see problems,
maybe they want to bad mouth us but I don’t care,” he told TradeWinds. “We are
one of the few companies that didn’t have to restructure our loans post-Lehman.
We are current on all our payments and have strong, visible cash flows.”
Pistiolis is confident the company’s lone
supramax bulker and six medium-range product carriers, which are due to earn between
$9,000 and $14,500 daily through 2018 and 2019, are helping to pave a path
toward profitability.
“If there were a major disaster and
something changed, if one of my top three charterers died in my hands tomorrow-
maybe we would have a problem then but if nothing really big happens I don’t
see any problem with our company. We are in a good position given the times.”
When the price is right...
While steady cash flow is vital to
weathering the storm, Pistiolis also intends to move forward with another round
of cost cutting measures that will target salaries and other areas like fees
paid to third parties such as Central Mare- the Pistiolis family’s ship
management wing.
The CEO says he has no immediate plans to
offload assets unless “the price is right” even though the company’s 2011 annual
report set the stage for vessel sales based on “projections that found cash provided by operating activities will not
be sufficient to cover scheduled debt repayments”.
“It sounds a lot more dramatic than it
actually is,” he said when asked about the warnings. “These are comments that
all listed companies in the world have to make in times where balance sheets
and cash flows are tight because of the auditing and legal aspects of the
matter.
“Legally I cannot put it another way, I
have tried, I have talked with the lawyers who say: ‘I understand and you are
right but you are going to present the situation in a way as if you were to die
tomorrow.’
“The
excess loans that can’t be covered by cash flow will be forwarded by one or two
years so hopefully soon we won’t have that issue anymore. Once these things are
covered then we will be able to take it easy and focus on cash flow, it’s that
simple, wait for the market to normalise.”
Pistiolis, who controls approximately
80% of the company’s shares, says he will continue to focus on the preservation
of liquidity in the near-term and admitted that curing a Nasdaq minimum market
value deficiency is not the most pressing item on his list of top priorities.
“Cash flow is the main issue, I am
trying to prioritise problems,” he continued. “We are examining options to
bring the share price back up but right now, and for the past two years, there
hasn’t been an appetite for shipping stocks in the [US].
“When the appetite becomes higher in the
States we will do a lot to get the message across. It will turn again like it always
does but right now spending $200,000 doing road shows or marketing in times
where money is of great importance- it would just go down the drain.
“So let’s say marketing helps [shares]
go to $1.20 or $1.80, big deal, it doesn’t save anyone from the story. It would
not be money well spent at present, maybe in six months or a year but not now. I
hold 80% of the company, what am I going to do, market to myself?”
Appropriate percentages, expansion and offshore
When investors return to the shipping
sector Pistiolis says the time will be right to “start doing offerings” while
taking steps to reduce his stake in the Athens-based owner to around 20%- a
percentage he described as “appropriate” for an individual in his position.
“I am tired of answering silly
backstabbing comments about me trying to takeover the company,” he added. “I just
laugh at them because I could have taken the company a long time ago but in
reality I wanted to put my money where my mouth is; show my faith in the
company.
“When the time comes we are going issue
shares to buy new things and then people we see what I am talking about. I will
go down to 20%, somewhere where a founder CEO should be. I don’t like where I
am but I am facing the music, it’s not my fault the world collapsed.”
Pistiolis, who described himself as a more
of an “expansion person” than “conservative person", did not elaborate on which
sectors Top would target but made the case for a strategy that he claims will
continue to serve the company well.
“You have to be adjustable to the times, you
have to know when to shrink and know when to expand,” he said. “If I didn’t shrink
in 2008 I would have had huge problems, poor values and poor cash flows, it
would have been a disaster.
“Shrinking and expanding is an art,
saying ‘I want to grow ‘is nice to say but you have to do it right. Not every
day is a growth day. Some days you have to go back to go forward. 2008 and 2009
was the time for steps back. Sometimes you have to clear the past to get to the
future.”
The executive did not rule out any potential
growth segments, however, and readily admitted that a decision to appoint a
representative in Brazil was motivated by an interest in the burgeoning offshore
sector.
“We have one guy in Brazil who focuses
on looking at offshore, meeting with Petrobras and maybe doing something new,
finding some new business,” he said. “I think it makes sense having someone
down there, maybe he will get his hands on something that makes sense.”
