New York-based Swiftbulk has become a tanker owner only, after calling the top of the dry bulk market and cashing out of the sector in $67.7m-worth of deals.
The sale of its bulkers comes as the company has scored a decisive courtroom win in a protracted dispute with its former investment banker.
Swiftbulk chief executive Stefanos Kasselakis confirmed to TradeWinds that the 55,800-dwt Osios David (built 2012) and 82,100-dwt Thestelia K (built 2009) have been committed for sale, but he underscored that money has not yet changed hands. A stock exchange announcement disclosed this week said that vessel sales would bring in some $46.2m.
Speciality insurer Tiptree, whose subsidiary Tiptree Marine trades its small fleet of bulkers and tankers under the name Swiftbulk, told investors the sale proceeds were 47% over book value. The deals agreed in May are expected to close in the third quarter.
Four years ago, the company bought the Osios David for $17.4m and the Thestelia K for $16.65m.
Swiftbulk’s ships, funded from its parent’s insurance premium income, are all debt-free.
The transactions come on the heels of Swiftbulk’s first bulker sale, that of the 55,600-dwt Stilianos K (built 2010), which was delivered to its new owner on 27 May. The $21.5m price tag on that ship reflects the sale-and-purchase market of March.
That leaves two MR2 product tankers, which Swiftbulk is holding onto for now.
“Of course, one always needs to look at the opportunity cost of asset appreciation relative to operating earnings, but right now we see products earnings outperforming,” said Kasselakis. “I still think product tankers are worth purchasing.”
He downplayed the risk of losing touch with the dry bulk trades.
“I believe we have established a good track record,” he said. “We would happily reinvest in dry bulk if we see an attractive entry point again.”
Nasdaq-listed Tiptree acquired Kasselakis’ Swiftbulk project in 2018 along with his family’s marine coatings company and funded the purchase of three bulkers and two tankers during that year and the next.
But Tiptree’s funding of the project brought a campaign of litigation from Kasselakis’ former investment banking advisor, Silver Leaf Partners.
Silver Leaf sole principal Fyzul Khan, himself a lawyer, brought a suit on behalf of the company, claiming its former partner Kathleen Lauster had put in extensive work for Kasselakis and only received $2,000 in compensation.
TradeWinds reported last year that legal action was underway in federal and state courts, in addition to arbitration proceedings, starting with a $22m claim and fraud allegations. Silver Leaf later cut the claim to $4m, withdrew the fraud allegations and replaced Khan with outside legal counsel.
In a 23 June decision, New York state judge Andrea Masley dismissed Silver Leaf’s last remaining lawsuit and ordered Khan personally to pay $5,000 in sanctions for bringing a frivolous lawsuit.
A hearing transcript from May seems to imply that Silver Leaf and Tiptree were negotiating a settlement over Lauster’s compensation. Lauster, is now managing director of her own boutique firm, Fairfield Capital Advisors.
Kasselakis said Silver Leaf’s litigation had ruled out any settlement for Lauster.
“I am glad the outcome vindicated us after this long process,” he said.
