A "wild" 2018 landed Aegean Marine Petroleum Network in bankruptcy court, but 2019 is shaping up to be a big year from the New York-listed bunker supplier.
It's a global network. I think it's really feeding the network with both the balance sheet as well as the capabilities that Mercuria can provide
Tyler Baron
Aegean director Tyler Baron tells TradeWinds the company is poised to emerge from chapter 11 in March stronger than ever thanks to the backing of Mercuria Energy Group.
"We're at the point now where we're in the final stages of the recapitalisation and the change of ownership to Mercuria, which is a $100bn revenue per year company," said Baron.
He touted the Swiss commodities trader's "sterling balance sheet" and "second to none access to capital".
"It's kind of migration from being the challenged industry player to being a platform to be the industry's leading player in the future," the executive said.
Two weeks ago, a federal judge in Manhattan approved a revised bankruptcy plan for Aegean Marine, capping off a turbulent year.
In February 2018 the company announced it was buying founder Dimitris Melissanidis' HEC Europe for $367m. The deal was scuttled a month later by rebel shareholders led by Baron.
The board was recomposed in May. In June, the company disclosed that it may have to write off $200m in accounts receivable. The same month, court papers tied to its bankruptcy revealed, Aegean Marine had several key terminals running dry, thanks to dwindling credit.
In August, Mercuria stepped in as the company's sole lender. In October, it said the $200m was part of a larger fraud scheme that creditors would later allege was perpetrated by Melissanidis.
The company declared bankruptcy the next month and hashed out a plan with dissident bondholders in December.
Baron said the proceedings are "in the window of largely statutory milestones".
He described the December deal — in which creditors get $40m plus rights to proceeds from litigation against Melissanidis with Mercuria receiving all the equity — keeps the restructuring moving.
"Obviously, with duration comes cost, disruption or just kind of market perception over a long period of time," he said. "Being able to get assurity of process and a path forward really gives you confidence from a duration perspective."
We have key terminals, we're blenders ... We will certainly be prepared for 2020
Tyler Baron
Moving forward, Baron said the Aegean Marine has an underutilised network of terminals worldwide and 41 bunker vessels.
With Mercuria's backing, he said the company has the liquidity to ramp up the business.
"It's a global network. I think it's really feeding the network with both the balance sheet as well as the capabilities that Mercuria can provide," Baron said.
Aegean Marine and IMO 2020
Sal Drago, Aegean’s global director of trading, said the company is planning for the International Maritime Organization's limits on sulphur fuel content.
He believes the company will be well-prepared to provide low sulphur fuel, low sulphur diesel or high sulphur fuel, depending on how its customers intend on complying with the new rules.
"2020 favors very well-capitalized companies," Drago said. "You have to be well-capitalized and that's where we're going to be."
Echoing Baron's praise of Mercuria, Baron said its capabilities would be an asset.
"[Mercuria has] a wider range and access to barrels worldwide. Obviously, we have Aegean's vast customer relationships across a lot of the key bunkering locations across the world," he added.
"We have key terminals, we're blenders ... We will certainly be prepared for 2020."
