Greece attracted just a single bid for its biggest and most historic shipbuilding facility, sparking speculation that the country will pull the plug on the sale.
The only offer for Hellenic Shipyards — better known as Skaramangas — came from Pyletech Shipyards, an entity led by low-profile Greek shipping investor Theodore Priovolos, which offered €15.1m ($18.4m) for the yard.
Some observers were underwhelmed.
“One spends more money to buy a kiosk on Omonoia Square [in central Athens],” Hellenic Shipyards' labour union Trident commented wryly.
The Greek finance ministry will likely cancel the tender, Greek media reported.
The special administrator in charge of the sale said in a rather laconic statement that he would take the matter for a final decision to Ηellenic Shipyards' creditors, which include the state, banks and workers.
Ηellenic Shipyards' assets that are up for sale include 350 acres (1.4 square km) of land to the west of Athens, including a graving dock said to be among the biggest in the eastern Mediterranean, with a capacity to handle ships of up to 400,000 dwt.
That would give the facility the potential to revive shipbuilding and ship repair business in Greece.
'Suicide mission'
Pyletech dismissed notions its bid was underpaying for the yard.
Total investment would exceed €700m and create 1,600 jobs directly and 6,000 indirectly, the company said in a statement.
Priovolos also argued that Hellenic Shipyards has already been stripped of much of its value.
According to Pyletech, the special administrator already sold the company’s two floating tanks a couple of years ago for scrap metal.
Hellenic Shipyards' ship lift for submarines and small boats is excluded from the sale and the new owner will have to rent it from the state for a steep €400,000 per year. Its only remaining shipbuilding tank is from the 1960s and requires extensive investment to become workable.
Even if Priovolos gets his way and acquires the yard at the price offered, Greek shipping players are sceptical he will be able to navigate Greek politics, labour unions and a toxic legacy of lawsuits to turn a profit.
“It’s a suicide mission,” one owner told TradeWinds.
The words were not chosen lightly. Costis Peraticos, the last Greek shipowner to invest in his home country’s shipbuilding capacity, was gunned down in the 1990s by a left-wing terrorist group after his family bought a ramshackle state shipyard.
However, times may have changed. Softened by years of industrial decline and job losses, labour unions acquiesced to Onex Technologies, a Greek-US investor, taking over Neorion — another formerly defunct ship-repair facility on the Aegean island of Syros.
Even Onex, which finds Hellenic Shipyards too tough a nut to crack, offered just €1m for the facility. Onex stated that this was a “symbolic” bid, submitted in order to be able to follow proceedings.
Originally founded by legendary Greek shipowner Stavros Niarchos, Hellenic Shipyards was nationalised and put in liquidation in the 1980s. It was privatised again in 2001 but, in 2013, the government fell out with the company's last private owners — international shipbuilding group Privinvest.
A bitter wrangle between Greece and Privinvest continues in court. To make matters worse, European Union fines keep piling up on Greece to the tune of €14.4m each year, for granting illegal state aid to Hellenic Shipyards.
In bed with MSC
However, Priovolos, who holds a PhD in economics from the University of Pennsylvania, is still optimistic that he can turn the yard around.
He heads the North Star Group, a Switzerland-based investment fund active in several industries, including Niki Shipping — an Athens-based company involved in bareboat leasing deals for containerships.
According to North Star's website, Niki Shipping “has a successful financial track record and proven expertise in sourcing, arranging and managing maritime assets through about $3.5bn of sale-and-leaseback transactions".
It added that these arrangements provide “a cost-effective alternative to direct vessel ownership for shipping liners”.
Niki's fleet list features about 50 containerships, mostly operated by Mediterranean Shipping Co, as well as four bulkers and two car carriers.
TradeWinds understands Niki arranged one large-scale deal with MSC last year, with financial involvement of Greece's Piraeus Bank. It is said to cover around 40 vessels, mostly smaller boxships built before 2000.
