We are an international shipping company with extensive operational experience
that owns and operates a fleet of dry bulk carrier vessels. On a fully delivered
basis, we will have a fleet of 76 vessels consisting primarily of Newcastlemax,
Capesize as well as Kamsarmax, Ultramax and Supramax vessels with a carrying
capacity between 45,588 dwt and 209,537 dwt. Our vessels transport a broad range
of major and minor bulk commodities, including ores, coal, grains and fertilizers,
along worldwide shipping routes. Our highly experienced executive management
team, with a combined 120 years of shipping industry experience, is led by Mr.
Petros Pappas, who has more than 35 years of shipping industry experience and
has managed approximately 300 vessel acquisitions and dispositions.
Our fleet, which emphasizes large Capesize vessels, primarily transports minerals
from the Americas and Australia to East Asia, particularly China, but also Japan,
South Korea, Taiwan, Indonesia and Malaysia. Our Supramax vessels carry minerals,
grain products and steel between the Americas, Europe, Africa, Australia and
Indonesia and from these areas to China, Japan, South Korea, Taiwan, the Philippines
and Malaysia.
Our primary objectives are to grow our business profitably and to continue
to grow as a successful owner and operator of dry bulk vessels. The key elements
of our strategy are:
Preserve liquidity during the current dry bulk market downturn through efficient
operations and vessel sales
Dry bulk charterhire rates have reached historically low levels recently, which
if prolonged could severely impact the dry bulk shipping industry overall. The
Baltic Dry Index, or the BDI, an index published daily by the Baltic Exchange
Limited, a London-based membership organization that provides daily shipping
market information to the global investing community, is a daily average of
charter rates for key dry bulk routes and has long been considered as the main
benchmark against which industry specialists and dry bulk shipping owners monitor
the movements of the dry bulk vessel charter market and the performance of the
overall dry bulk shipping market. In this environment, we are taking all necessary
actions to preserve our liquidity through vessel sales, renegotiation of price
and delivery dates with the shipyards for our newbuilding fleet, as well as
optimization of vessel operations to reduce voyage and operating costs. Our
management is focused on making us a leading operator in terms of cost without
sacrificing the quality of our operations.
Capitalize on potential increases in charterhire rates for dry bulk shipping
The dry bulk shipping industry is cyclical in nature. The recent historically
low dry bulk charterhire rates act as a catalyst for ship owners, who scrap
a significant number of vessels, until equilibrium between demand and supply
of vessels is achieved. Based on our analysis of industry dynamics, we believe
that dry bulk charterhire rates will rise for the medium term due to drastic
supply cuts that we expect will result from owners’ actions in the short
term. The supply of dry bulk carriers is dependent on the delivery of new vessels
and the removal of vessels from the global fleet, either through scrapping or
loss. As of the beginning of February, 2016, the global dry bulk carrier order
book amounted to approximately 15% of the existing fleet at that time. The level
of scrapping activity is generally a function of scrapping prices in relation
to current and prospective charter market conditions, as well as operating,
repair and survey costs. Generally, dry bulk carriers at or over 25 years old
are likely candidates to be scrapped. During 2015, a total of 30.5 million dwt
was scrapped, representing the second highest level in the history of the dry
bulk industry.We have also observed the conversion of a number of newbuilding
dry bulk vessels to tanker and container vessels, which we consider has the
positive consequence of reducing dry bulk vessel deliveries and hence supply.
We expect that the historically low freight rate environment will continue to
dissuade ship owners from ordering further dry bulk vessels. By reducing vessel
supply, we believe that the above three factors will have a positive effect
on freight rates in the future. While the charter market remains at current
levels, we intend to operate our vessels in the spot market under short-term
time charter market or voyage charters in order to benefit from any future increases
in charter rates.
Charter our vessels in an active and sophisticated manner
Our business strategy is centered on arranging voyage and short term time charters
for our vessels given the current low market levels. This approach is also tailored
specifically to the fuel efficiency of our newbuilding vessels. While this process
is more difficult and labor-intensive than placing our vessels on longer-term
time charters, it can lead to greater profitability, particularly for vessels
that have lower fuel consumption than typical vessels. When operating a vessel
on a voyage charter, we (as owner of the vessel) will incur fuel costs, and
therefore, we are in a position to benefit from fuel savings (particularly for
our Eco-type vessels). If charter market levels rise, we may employ part of
our fleet in the long-term time charter market, while we may be able to more
advantageously employ our newbuilding fleet in the voyage charter market in
order to capture the benefit of available fuel cost savings. Our large, diverse
and high quality fleet provides scale to major charterers, such as iron ore
miners, utility companies and commodity trading houses. This arrangement will
allow us to take the full benefit of the vessels’ increased cargo carrying
capacity as well as potential savings arising from their fuel efficiency, as
we will be compensated on a $/ton basis, while being responsible for the voyage
expenses of the vessels. We seek similar arrangements with other charterers,
providing the scale required for the transportation of large commodity volumes
over a multitude of trading routes around the world.
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