It is par for the course for public shipping executives to “talk their own book” on quarterly earnings conference calls.
But Ardmore Shipping chief executive Anthony Gurnee drew some attention last week not by doing that, but by essentially talking up ships he does not have.
Gurnee made the case that it is a good time to buy somewhat older MR product tankers that pre-date the most modern “eco” tonnage, and even the “eco-modified” vessels in Ardmore’s fleet.
He even said that a nine-year-old MR, which is among Ardmore’s oldest, had likely been its best performer in capital returns.
Gurnee did not seem to be talking his book, but was he doing something else? Was he perhaps dropping hints about a deal Ardmore has in mind?
At a time when “consolidation” is a buzzword in the products market, the Ireland-based owner has been identified as a potential merger-and-acquisition partner of privately owned Diamond S Shipping.
Diamond just happens to own 33 MR product tankers with an average age of nine years that were built in South Korea, one of the two yard nations, along with Japan, raised by Gurnee.
So, was there more to Gurnee’s comments than just idle musing?
The Ardmore boss essentially laughed off the question when contacted by TradeWinds this week.
Japanese-built in focus
“I was referring particularly to Japanese-built MRs built from 2008 to 2010, which are selling today at very attractive levels, plus they are much more fuel efficient than [South] Korean ships of that vintage,” Gurnee said.
He added that Ardmore bought one such unit, now the 47,500-dwt Ardmore Sealancer (built 2008) — the same tanker he had referenced in his remarks to analysts.
So, is there anything to the talk regarding Diamond? Gurnee would not be cornered. “Regarding M&A, we are the perennial candidate in the rumour mill and I suppose that won’t change,” he said, without further comment.
Gurnee is right. Talk persists that its 25-strong fleet could be an ideal partner for Craig Stevenson-led Diamond, whose private backers led by WL Ross & Co are understood to have retained advisory firm Moelis & Co to explore strategic options.
Diamond could benefit from Ardmore’s New York Stock Exchange listing as a platform for investors seeking to exit their bets, most of which are seven years old.
Meanwhile, the Diamond fleet would push the combined company to nearly 60 tankers, ratcheting it up the ranks towards rivals such as Torm and Scorpio Tankers.
Whether intentional or not, Gurnee’s remarks last week are unlikely to chill speculation among observers who are playing the consolidation parlour game.
Yet at the same time, a new name has emerged as a potential partner for Diamond: Capital Product Partners, the Nasdaq-listed vehicle of Greek shipowner Evangelos Marinakis, which has 21 MR product tankers among its 37 vessels. As with Diamond, their average age is about nine years.
Similar average age
Marinakis is no stranger to running crude tankers in his private companies and even Capital Product owns four suezmaxes and an aframax.
This could present other possibilities as Diamond also owns 12 suezmax tankers. The Connecticut-based owner was once thought to be keen to either float the company, or sell it whole. More recently, it has seemed willing to seek separate deals for the clean and crude fleets, sources said.
Capital Product did not respond to a request for comment by TradeWinds’ deadline. Stevenson has previously declined to comment on Diamond’s consolidation, dismissing such talk as “rumours”.
