US-based shipowner Sophocles Zoullas has been looking back on a shipping career lasting more than three decades.
The owner of private New York company Zenith Shipping is a born-and-bred New Yorker and the scion of two Greek shipping families.
He started out running a privately held fleet before founding Eagle Bulk Shipping and taking it public in New York in 2005, before leaving 10 years later after a restructuring.
Asked if public or private is better, he told the Marine Money Ship Finance Forum in London: “Having seen it all, my takeaway is there is no right or wrong answer. There is the right time to do something and the wrong time to do something.”
Being private now has its own advantages, he explained.
“I ended up building up a fleet of ships five or six years ago at the bottom of the market, mostly bulkers,” Zoullas added.
“Being private allowed me the flexibility to transact in the market without people knowing what I was doing because I thought if people knew I was buying they would ask [for] more money when they saw me coming,” he said.
The idea behind setting up Eagle Bulk was to build a world-class shipping company, not to work some kind of arbitrage between private and public fleets, the Zenith boss explained.
Bringing together shipping and financial institutions
“I managed to form a marriage between shipping and institutional capital, which I always saw as an obvious path for shipping,” he told the conference. “It was almost a foregone conclusion, but I didn’t know exactly when.”
The IPO wave depended on two factors: an alignment of values, and transparency, Zoullas argued.
“Charterers were starting to ask who the ultimate beneficial owners were. That was a pretty interesting time,” he said.
It only took eight months from founding the company to going public, whereas Zoullas’ aim had been to build the company up for a couple of years.
But DryShips came out with an IPO, then the Navios group.
“I was approached by quite a few investment banks, and they said, listen, there’s a real appetite, would you consider doing this?” Zoullas said.
“If anyone is considering the capital markets in the US, I would say the IPO is almost the beginning to get to your ultimate goal. It’s not the finish line, it’s actually the starting line. It allowed us to build up the company faster,” he added.
The ‘wild west’
The company floated with 10 or 11 ships, which would not happen now, Zoullas believes.
“It was a little bit like the wild west. There was tremendous optimism, tremendous opportunity,” he told the conference.
Public shipping companies split into two groups, Zoullas believes.
One saw the capital markets as an investor-friendly way to reach their goals more quickly.
The other viewed an IPO as “like a pot of gold”, he said.
“That’s where I think people ran afoul because they didn’t fully appreciate the requirements for disclosure and transparency,” Zoullas added.
Eagle Bulk is still going strong and has this month finished a short trip from the Nasdaq in New York’s Times Square to its new home on the New York Stock Exchange.
