Billionaire Greek Ship Owners Surface as Home Economy Sinks

By Tom Metcalf

(Bloomberg) — More than a thousand delegates from the transport trade gathered final month on the Hilton Athens for the Greek Shipping Forum, a day of speeches and panel discussions on personal fairness, ship recycling and financing.

The packed reception corridor was a testomony to how the nation’s ship house owners nonetheless dominate the trade a long time after Aristotle Onassis and Stavros Niarchos dominated the waves. The Hellenic fleet is the world’s most dear at $106 billion, based on VesselsValue.com, accounting for 19 p.c of the world’s tankers.

Greece’s seafaring mastery is a exceptional feat for the world’s Forty second-largest financial system, the place financial and political turmoil has left 1 / 4 of the inhabitants unemployed.

“This is a business that’s part of their soul,” Matt McCleery, writer of “The Shipping Man” and president of Stamford, Connecticut-based ship finance consultancy Marine Money International, mentioned in a telephone interview. “It’s so important to their culture, to their identity, and to their history.”

It’s additionally made billionaires of the nation’s 4 largest ship house owners by tonnage: John Angelicoussis, George Prokopiou, Peter Livanos and George Economou. The quartet management a mixed fortune of $7.6 billion, based on the Bloomberg Billionaires Index. None of them seem individually on a world wealth rating.

Fleet Valuations

The richest is Angelicoussis, whose corporations personal 96 energetic vessels with a capability of greater than 18 million deadweight tons, the trade’s normal measurement for a way a lot ships carry, based on knowledge for December compiled by maritime newspaper Shipping Finance. His household’s stake within the fleet is valued at $2.4 billion, based on knowledge compiled by Bloomberg.

“He’s one of the great men of our industry,” Harry Fafalios, chairman of the Greek Shipping Co-Operation Committee, mentioned in an interview in London.

The 66-year-old’s fortune is calculated based mostly on knowledge supplied by London-based VesselsValue.com, an internet ship valuation database. It contains his energetic fleet and vessels below development and relies on the ships’ measurement, age and earnings, and excludes charters.

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The worth of the vessels are discounted by 60 p.c to approximate the everyday degree of financing Greek ship house owners can acquire immediately, based on Anthony Zolotas, chief govt officer of ship financing adviser Eurofin SA.

Angelicoussis declined to touch upon his web value.

Prokopiou has a fortune valued at $2 billion, based on the Bloomberg rating. Livanos controls at the least $1.7 billion and Economou has a web value of $1.5 billion. Their fortunes are comprised of stakes of their publicly traded transport companies and intently held vessels.

Livanos is the largest shareholder in liquefied pure gasoline service operator Gaslog Ltd. and tanker proprietor Euronav NV. Prokopiou listed Dynagas LNG Partners LP on the New York Stock Exchange in 2013. Economou’s Dryships Inc. operates bulk carriers. Together, their fleets exceed 40 million deadweight tons. Livanos operates 83 vessels, whereas Prokopiou has 89 and Economou has 116, based on Shipping Finance.

The three billionaires declined to touch upon their web value, based on spokesmen.

Hellenic Fleet

Greeks have lengthy dominated the transport enterprise. The nation’s fleet, numbering 3,669 vessels in 2013, is the most important on the earth, based on the annual report of the Union of Greek Shipowners, making up greater than 7 p.c of the Greek financial system and offering 192,000 jobs in 2013.

Greece’s transport magnates management 23 p.c of the world bulk service fleet, based on the report, at the same time as their residence nation accounts for lower than 0.4 p.c of the world financial system.

Their success in one of the international industries stands in distinction to their nation’s home troubles, the place 36 p.c of the inhabitants was vulnerable to poverty or exclusion from social advantages on the finish of 2013, based on Eurostat, the statistics company of the European Commission.

“There is a humanitarian crisis,” mentioned Spyros Economides, a professor in worldwide relations and European politics on the London School of Economics. “It’s not just the problems on the street, it’s much more endemic and deeper than that with people fearing they might get evicted from their homes, who can’t pay their electricity bills, who are having problems feeding their families.”

Perama Clinic

That’s evident on the Medecins du Monde clinic in Perama, Athens’ poorest suburb. It gives free medical assist to locals with out entry to Greece’s well being system and has seen its affected person numbers double because it opened in 2010 amid the erosion of state well being protection.

As social pressures mount, the privileged tax standing of the transport trade has come below rising scrutiny as successive Greek governments look to spice up income. The trade pays no tax on worldwide earnings introduced into the nation below guidelines included in Greece’s structure in 1967.

Constitutional Cover

“All these laws are to protect ship management companies that serve mostly international trade and commerce,” mentioned Ilias Bissias, a lecturer in worldwide transport coverage at Alba Graduate Business School in Athens. “This regime should not be changed as it is similar and in line with international tax laws that exist in most maritime centers in all parts of the world.”

Even with this constitutional cowl, the Union of Greek Shipowners reached a voluntary settlement with the earlier authorities in October to double the tax paid by the trade within the three years from 2014.

Whether that will likely be sufficient for the nation’s new anti- austerity Syriza-led authorities isn’t clear. In a February letter to creditor establishments, Greece Finance Minister Yanis Varoufakis mentioned the brand new regime will “ensure that all sections of society, and especially the well-off, contribute fairly to the financing of public policies,” as a part of reforms that secured the continued availability of bailout funds for Europe’s most indebted nation.

Formidable Reputation

“Shipping together with tourism are the two main sources of income for the country,” mentioned Eurofin’s Zolotas. “The government would be ill-advised to make it less attractive for ship owners to remain in Greece because ship owners are providers of a lot of employment.”

With restricted demand from their home market, Greek ship house owners have lengthy appeared past residence shores for enterprise. While it’s helped shelter them from the worst of the Greek disaster, the trade remains to be fraught with challenges.

The Baltic Dry Index, a blended measure of charges for dry vessels, is down 51 p.c this 12 months to file lows. Meanwhile, low oil costs have precipitated the tanker market, one other space that’s been a standard Greek energy, to endure a renaissance, although the market usually reverses inside three to 6 months, based on Michail Kokkinis, founding father of Piraeus-based ship dealer Golden Destiny.

“Greek ship owners are gamblers,” Tony Foster, founding father of London-based transport asset supervisor Marine Capital. “The history of Greek shipping is that they take risks. The shipping market is volatile and highly cyclical. Greeks are willing to embrace that risk.”

Spiro Latsis, the nation’s richest man, diversified his household’s transport dynasty into banks and now controls a $2.7 billion fortune.

Golden Greeks

Niarchos and Onassis, dubbed the Golden Greeks due to their wealth and movie star, competed through the second half of the twentieth century. They raced to construct the world’s largest fleets and outdo one another with the dimensions of their islands, yachts and weddings. Stavros’s son Philip inherited a lot of his artwork assortment from his father’s property.

Their affect remains to be seen immediately. The Stavros Niarchos Foundation, endowed with a portion of the household’s property following Stavros’s dying in 1996, is liable for the town’s largest development challenge on the positioning of a former racecourse on the south finish of Syngrou Avenue, which bisects the underside of the town.

The $800 million enterprise, designed by architect Renzo Piano, will home the nationwide library and opera firm and have a 42-acre park on the roof.

Adjacent to the park is the Onassis Cardiac Surgery Center. Other donations from transport dynasties pockmark the town, together with the Eugenides Foundation’s planetarium and the Goulandris Museum of Cycladic Art.

Today’s prime transport tycoons are extra inclined to maintain a decrease profile, significantly because the disaster hit.

“They’re very hard working and often humble people,” Marine Money’s McCleery mentioned. “For the most part you find these guys who are dedicated and very family orientated. They work their tails off way beyond any monetary need.”

–With help from Maria Petrakis, Paul Tugwell and Nikos Chrysoloras in Athens, Marine Strauss in Brussels and Alaric Nightingale and Naomi Christie in London.