Greek shipowners George and Christos Economou are to buy out the lead shareholder in four LNG carriers after they were threatened with hard-­hitting legal action in the US.

Documents filed in the Supreme Court of the State of New York show that the case brought by Oceanus LNG — which is 85.7% controlled by US equity firm MatlinPatterson — against the father and son has been dropped by both ­parties.

TradeWinds understands that George and Christos Economou have agreed to buy out Matlin­Patterson’s lead shareholding in the four tri-fuel diesel-electric (TFDE) LNG carriers, giving their family interests 100% ownership of the vessels.

Sources following the case said the Economous have opted to pay close to the ­market price rather than duke it out with MatlinPatterson’s interests in court.

They revealed that several Greek shipowners had shown interest in buying the four South Korean-built vessels — the 160,000-cbm Corcovado LNG, Kita LNG, Palu LNG and Yari LNG (all built 2014) — that Matlin­Patterson had been keen to sell.

Oceanus LNG's four tri-fuel diesel-electric vessels
Ship nameSize (cbm)BuiltYard
Corcovado LNG159,8932014DSME
Kita LNG160,0042014DSME
Palu LNG160,1182014DSME
Yara LNG160,1062014DSME

In October 2020, GasLog was understood to have emerged as the preferred purchaser of the vessels. The Peter Livanos-controlled company is believed to have been ready to pay nearly $90m per ship.

But the Economous are said to have wanted to keep the vessels in their own stable.

In December’s court filing, Oceanus detailed that it had received an offer for all four LNG carriers from “one of the world’s largest LNG shipping companies”, without naming the outfit.

But it said the Economous blocked the buyers from receiving information about the ships.

The pair were also accused of chartering out some of the vessels on time charters at below-market rates, against the directions of Oceanus’ board.

In the filing, Oceanus accused the Economous of an “unrelenting campaign” to “sabotage” the sale of the four ships “through brazen acts of intimidation, insubordination, and borderline piracy”.

It said the father and son pressured potential bidders to stay away, fixed out the vessels on multi-­year charters at sub-market rates and made Oceanus a lower offer to buy the vessels.

‘A ­single goal in mind’

The TMS Cardiff Gas-managed Yari LNG is one of four vessels set to be fully taken over by the Economous' interests. Photo: TMS Cardiff Gas

“The Economous have only a ­single goal in mind: to destroy the value of Oceanus and its ships so that [MatlinPatterson], and its secured lenders, have no choice but to sell the company or its ships to the Economous,” Oceanus alleged.

Asked about the settlement, lawyers acting for MatlinPatterson’s interests said it is not something they could comment on.

Christos Economou, chief executive of TMS Cardiff Gas, which manages the four vessels, and ­GasLog have been contacted for this article.

MatlinPatterson has long been trying to shed its stake in the four vessels as the fund originally formed to finance them approached maturity.

The LNG carriers were circulated on the market in 2019, with a test vessel being offered to buyers again in mid-2020. At the time, brokers valued the ship in the region of $80m.

Oceanus, in which George ­Economou’s interests control the remaining 14.3%, originally paid $900m for the quartet.

Aside from the four TFDE ships, TMS Cardiff Gas controls 11 modern LNG carriers fixed on long-term contracts and one steam-­turbine ship — the 147,895-cbm Fuji LNG (built 2004).