The Greek owner of a product tanker that has been under arrest since December is fighting efforts by mortgage holder TMF Trustee to force an auction at what it says is a low-ball price.
Five other financial and trading creditors have joined TMF in arresting Oxygen Maritime Management's 74,600-dwt Megacore Philomena (built 2010). But some or all of those creditors are siding with the shipowner and against TMF, which wants a sale done by 25 April with a minimum price of $17m.
Oxygen controls four ships, all Hyundai Mipo Dockyard-built product tankers from the fleet of bankrupt Omega Navigation Enterprises. The other three are the 37,000-dwt Megacore Honami and 46,200-dwt Alpine Marina (both built 2010) and 46,100-dwt Alpine Duke (built 2009).
Oxygen managing director Charilaos Loukopoulos is a former executive vice president at George Kassiotis-controlled Omega. Oxygen's ships are under the commercial management of and occasionally on time charter to O2 Trading. The Megacore Philomena and Megacore Honami ultimately are owned by a company called OD Investments, whose address is listed at Oxygen's headquarters in Athens.
The Megacore Philomena has been under arrest by TMF at Long Beach, California, since 18 December. TMF took the action as agent for lenders Bank of America and hedge fund Davidson Kempner affiliate Burlington Loan Management, which bought the mortgage rights in September 2013 from Bank of Scotland.
Cass Technava valued the LR1 tanker at nearly $24.9m at the end of August 2017, but the mortgage holder arrested it on the grounds that its market value and that of the Megacore Homani had fallen below loan covenant levels.
A trial date is set for August, but TMF has asked the Central District of California federal court to order a speedy sale and to appoint Clarksons as sole broker.
Oxygen, through registered owner Hurricane Navigation, is fighting the arrest, the acceleration of mortgage repayments that triggered it and now the bid for the quick sale.
Loukopoulos has told the court the arrest reflects a squeeze by distressed asset investors.
In October 2017, TMF declared an event of default because the value of the Megacore Philomena and Megacore Honami had fallen below 125% of the outstanding loan value of nearly $34.5m. TMF claimed their value had fallen to less than 120% of that.
Loukopoulos, who did not immediately respond to a request for comment through his office staff, has disputed the valuation figures from brokers Braemar and Barry Rogliano Salles as failing to take account of the high specifications of the ships.
He also told the federal court that the lenders had put up financial obstacles to the vessels' profitable operation, including a quarterly cash sweep, $5.69m in extra loan pre-payments over the past two years, and efforts to sell the ships while his company is trying to save them.
"Unfortunately, Hurricane's continuing efforts at securing the release of the vessel through a re-financing deal have been actively hampered by the plaintiff's efforts at actively promoting the sale or pre-sale of the vessel in the same financial circles in which Hurricane is attempting to secure new financing," he wrote in an affidavit last week.
"Moreover, the fact that the vessels were constantly under an imminent threat of arrest prevented the proper trading of the vessels and limited income-generating ability."
