Billionaire distressed debt investor Wilbur Ross is continuing to look for more investments in the battered shipping industry.
Ross is famous for combining distressed steel companies that he later sold to ArcelorMittal (MT). He also restructured Corus loans in south Florida which has been a massive success.
Last year Ross said that highly leveraged operators without long-term contracts would most likely go out of business. He saw opportunities in dry bulk shippers and container companies.
Far more distressed sales of ships were likely, Ross said. On some tanker routes, spot-market rates have fallen so far in recent weeks that shipowners have been paying customers to let them transport their cargo.
“The number of distressed shipping deals grows daily, mostly from individual owners of small numbers of ships,” Ross said. “We do expect further opportunities over the next 12 months. You never know where the exact bottom is until after the recovery has begun, but it is clear that we are already much closer to the bottom than the top.”
The shipping sector stocks have been battered in 2012 and the pain continues as tax loss selling accelerates. For example, DryShips (DRYS, Financial) and Box Ships (TEU, Financial) are down about 50% off their 2012 highs.
Ross is famous for combining distressed steel companies that he later sold to ArcelorMittal (MT). He also restructured Corus loans in south Florida which has been a massive success.
Last year Ross said that highly leveraged operators without long-term contracts would most likely go out of business. He saw opportunities in dry bulk shippers and container companies.
Far more distressed sales of ships were likely, Ross said. On some tanker routes, spot-market rates have fallen so far in recent weeks that shipowners have been paying customers to let them transport their cargo.
“The number of distressed shipping deals grows daily, mostly from individual owners of small numbers of ships,” Ross said. “We do expect further opportunities over the next 12 months. You never know where the exact bottom is until after the recovery has begun, but it is clear that we are already much closer to the bottom than the top.”
The shipping sector stocks have been battered in 2012 and the pain continues as tax loss selling accelerates. For example, DryShips (DRYS, Financial) and Box Ships (TEU, Financial) are down about 50% off their 2012 highs.
