20.03.2008 - Genmar tankers in sales scrutiny

A tanker player is said to have stepped up efforts to sell its 11-strong suezmax fleet.

For sale or not for sale? That is the $1bn-plus question hovering over General Maritime Corp (Genmar)'s modern fleet of suezmaxes.

Market sources have the impression that Peter Georgiopoulos's New York-listed tanker company has stepped up efforts to encourage a sale en bloc of the 11-unit fleet in recent weeks but a Genmar executive said this week that there is nothing new.

"I can only repeat what Peter has said on virtually every [earnings] conference call and that is that we are sellers at the right price and we are buyers at the right price," said John Tavlarios, president of General Maritime Management.

"Beyond that, there's really nothing that I can comment on," Tavlarios said.

However, one shipowner says Genmar has quietly stepped up efforts to gauge market interest in the vessels over the past few weeks. The suezmaxes have not been circulated generally by shipbrokers.

"It's a beautiful suezmax fleet but their idea of price something in the area of $1bn to $1.1bn is a little high," he said.

Genmar's suezmaxes are considered the gem of its 21-tanker fleet, which also includes 10 aframaxes. Aside from one older unit built in 1991, all of the suezmaxes were built in 1999 or later. Three newbuildings were delivered in 2007 and one in February. All but one of the suezmaxes carry time charters, ranging from late-2009 to early-2011.

"They're nice ships with quality charters but the charters don't affect the valuation much," said one broker. "With asset valuations as full as they are, the net effect of the charters is probably neutral.

"The selling point is, how many places are you going to get 11 modern suezmaxes in one shot? Not many. So do they deserve a premium if they sell them en bloc? They think they do but I don't think all potential buyers agree."

By the same token, the field of potential buyers is limited by the size of the price tag. Market sources say public tanker companies like Teekay Corp, Overseas Shipholding Group (OSG) and Tsakos Energy Navigation (TEN) could be candidates.

Any discussion of a sale comes in the context that Genmar is a perennial acquisition candidate. Georgiopoulos has indicated for years that the company can be had for the right price and shipowners John Fredriksen and the BW group have held double-digit shares stakes in recent years.

"Peter is always willing to buy low and sell high," said one broker.

Joe Brady, Tradewinds

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