A bulker joint venture founded by US commerce secretary Wilbur Ross is facing the retreat of a key partner as four ships are circulated on the sale-and-purchase market.
Nautical Bulk Holdings is circulating the ultramaxes at the behest of founding investor Solus Alternative Asset Management, which is looking to exit its bet on the company, according to sources in the dry market.
Solus is understood to have retained advisory firm PJT Partners to explore the sale within the past several weeks.
The four bulkers roughly approximate Solus’ share in the venture, as Nautical has 13 units, including 12 ultramaxes, in its fleet.
The scenario is yet another case in which a private equity firm has run out of time or patience with a shipping investment and looked to arrange a deal, the sources said.
Don’t bank on quick sale
The effort is likened to last month’s decision by private equity’s Kelso & Co to sell 11-bulker Delphin Shipping to public company Star Bulk Carriers in a $139.5m deal.
Two sources in the dry market said Nautical also explored a sale of its entire fleet about two years ago in a quiet process that had not previously come to light.
Ultramaxes with the characteristics of those in the Nautical fleet have been assigned values of between $17.3m and $19.9m by VesselsValue. They were built between 2015 and 2018, all at China’s Jiangsu New Hantong Ship Heavy Industry.
At the moment, buyers don’t seem to want to make a call — they’re in a holding pattern for now
Dry bulk market source
One player in the dry market thinks a comparable vessel available for sale might be Star Bulk’s 63,000-dwt Star Anna (built 2015), from the same yard. The Greek owner is said to have set price expectations at $18.5m.
Nautical may not find quick success, the source said.
“At the moment, buyers don’t seem to want to make a call — they’re in a holding pattern for now,” he added.
“The spot market is fairly subdued. There is more sales liquidity for somewhat older, lower-priced ships than for vessels of this vintage.”
Nautical was formed in 2013 as a partnership between WL Ross & Co, Solus, Fearnley Advisors and Conti Shipping of Germany. Ross was still in a key role at WL Ross at the time, but has since separated as a requirement of his post in the Trump administration.
TradeWinds reported at the time of the order that the newbuildings were costing $24.9m each. Unlike other owners, Nautical did not seek to tap the Norwegian bond or equity markets for a capital raise.
However, as with other bulker investments from that era, the investment appears to have been under water for the life of the company.
The fleet attained a maximum value of $328m in July 2014, based on 11 ships on the water or under order, according to VesselsValue.
It has 13 bulkers today, including one supramax, and an estimated fleet value of $228m, VesselsValue said.
In April, Nautical sold the 56,900-dwt Nautical Amethyst (built 2011) to Chinese buyers for $10.5m.
