If an investor was to give you $50m to use as you wish, how would you spend it?
That was the question that product tanker owners were asked by moderator Randy Giveans, lead shipping equities analyst for Jeffries, during the Capital Link conference in London on Tuesday.
But none of four executives on Giveans' panel said they would spend the imaginary money on newbuildings.
Kim Ullman, chief executive of Concordia Maritime, and David Morant, managing director of Scorpio Tankers, both said they would pick up secondhand tonnage with the fantasy cash.
Ullman said right now is an "excellent opportunity" to buy rather than build, adding that he would focus his investment on secondhand medium-range (MR) tankers.
"Not necessarily because they are better than any other segment, but because they are in our fleet already," he told the conference, which was held as part of London International Shipping Week.
He also pointed to the historically low MR orderbook, relative to the live fleet.
Morant said he would look to acquire prompt-delivery resales of modern tonnage, particularly within the LR2 segment, as well as using the cash to reduce the company's leverage.
Carlos de Balestra di Mottola, chief financial officer for d'Amico International Shipping, said the question was "an easy one for us".
He said the Italian tanker company would spend the hypothetical $50m on buying back its shares.
The securities are currently trading at around a 50% discount to its net asset value (NAV) on the Milan Stock Exchange, which would put the firm in a good position to buy back, he said.
Any spare cash leftover from the imaginary $50m could also be spent on exercising purchase options on some of the vessels sold by the company previously and leased back, de Balestra di Mottola said.
"But we are in no hurry whatsoever to buy back these vessels," he added.
Jacob Meldgaard, chief executive of Torm, was perhaps the most conservative of all the panellists.
He said the Danish tanker company already has a huge capital expenditure programme, comprising newbuildings, scrubber installation and other vessel upgrade projects.
Rather than invest the imaginary cash in any further tonnage, he told the conference:"We would be patient and wait."
