A New York private equity firm has sold a significant position in Greek boxship owner Danaos Corp two years after acquiring it through a debt refinancing deal.
In August 2018, Cerberus Capital Management, which is focused on distressed debt investing, received 3.1m shares, representing a 15% stake in Danaos. It obtained the stake through its role as the beneficial owner of $2.2bn of refinanced debt held by Hamburg Commercial Bank (HCB).
Cerberus first revealed the position in John Coustas-led Danaos Corp on 20 November, when it bought the shares outright from HCB with the intent of selling them a few days later.
Chief financial officer Evangelos Chatzis told TradeWinds on Tuesday that Cerberus had always planned to sell the shares since acquiring them in 2018 but was just waiting for the best time to offload them.
"We have discussed this with them in the past," he said.
"As soon as they saw a good price they sold them. They were believers in the company."
'A good thing'
He said Cerberus' sale of the major position is actually beneficial to New York-listed Danaos because it increases the company's liquidity for the next shareholder.
"This is just a good thing," he said.
"Cerberus was just sitting on them anyway. The fundamentals of our company are such that investors will realise a valuable position."
Danaos shares, which trade on the New York Stock Exchange under the ticker symbol DAC, fell 18.5% to $12.10 in the first minutes after Tuesday's opening bell on Wall Street.
Cerberus did not immediately return calls for comment.no change to the share count.
"We view this pullback as an attractive buying opportunity."
Jefferies analyst Randy Giveans also saw the divestment as a positive for Danaos.
"We view the sale as good news as it removes an unnatural holder and the overhang of the eventual share sale," he wrote in a client note.
"We view this pullback as an attractive buying opportunity."
Top Danaos shareholders include NatWest Markets, which holds a 12.3% stake, and No Street GP, which owns 5.9%.
Danaos improved its earnings for the third quarter as rates recovered faster than expected during the pandemic.
The Athens-based owner of 63 containerships posted a $42.8m profit, versus a $33.9m profit during the same period last year.
Adjusted net income came in at $47.3m compared with $37.9m, resulting in a $1.91 earnings per share that beat analyst consensus by $0.05 but fell short of last year's $2.46.
Revenue came in at $118m, versus $112m a year ago, amid the unexpected recovery.
