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Greece: Safe Bulkers Inc. to Buy Ten Vessels Next Year

Safe Bulkers Inc(SB.N), the fourth-largest U.S.-listed dry bulk carrier by market value, may buy up to 10 vessels next year as the weak market promises cheap bargains

Greece: Safe Bulkers Inc. to Buy Ten Vessels Next Year
15 July 2011 - 14:45


Safe Bulkers Inc(SB.N), the fourth-largest U.S.-listed dry bulk carrier by market value, may buy up to 10 vessels next year as the weak market promises cheap bargains, its top executive said.

The company expects the new vessels to start operating by 2013, helping it cash in on the improving market where demand will outpace deliveries leading to better freight markets.

“By this time next year, we will have opportunities to order more ships as prices next year will be lower which will enable us to buy more reasonably prices ships,” Chief Executive Polys Hajioannou said in a telephone interview from Athens.

The Greece-based company has a fleet of 16 vessels — mostly from Japanese shipyards — which mainly carry thermal and coking coal and it has 11 vessels scheduled to be delivered at various times through 2014.

Hajioannou expects to have a “fire power” of about $320 million to buy vessels, with $160 million of that being raised as debt by offering ships as collateral.

“We hope that the shipyards, mostly Japanese, should deliver competitive prices next year. At the moment they are not delivering competitive prices because the yen is strong now,” Hajioannou said.

Since the downturn, the price of a panamax vessel has fallen almost 30 percent to about $33.5 million currently and is expected to drop further to $30 million by the end of the year.

Ship owners went on an ordering spree before the economic turmoil, resulting in an oversupply condition that hit the market hard. This has also forced companies like DryShips Inc (DRYS.O) to diversify into drilling and tanker businesses.

Safe Bulkers, valued at $545.8 million, however, has no such plans.

“We will remain dedicated to bulk shipping,” Hajioannou said. “We don’t believe that companies should be active on too many fronts, as it becomes difficult to monitor all markets.”

The CEO expects a better dry bulk market next year as Japan, a big commodity consumer, will import more iron-ore and coal to help the reconstruction of the quake-hit country.

Commenting on the issue of piracy, Hajioannou, who is also a founding member of the Union of Cyprus Shipowner, said the shipping sector will have to live with the reality of piracy off the Somalia coast.

Piracy attacks have risen by a third in the first half of the year, and become more violent, with pirates using grenade launchers, machine guns and other weapons.

“I don’t think there’s a political will from the governments to intervene,” the football fan said.

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