Greeks look to blend traditional strengths with market gains

Listening to Nikolas Tsakos, one of Greece's leading shipowners, talking about his grandmother reveals much about why his compatriots control such a high proportion of the world's ships.

Even as she neared her death aged 98 in 2001, Tsakos recalls, Maria Tsakos continued to believe there was no higher calling for a man than that of a sea captain - a role which in her formative years also equated with being a shipowner. It reflected the value system during her childhood on the Aegean island of Chios in the early 1900s.

"When you would introduce her to someone who was a doctor or a lawyer, she would say, 'Oh dear, the poor man couldn't become a captain'," Tsakos recalls.

Yet the story of Tsakos' grandmother also illustrates how readily Greece's traditional shipowning culture has adapted to the growing complexity and scale of demands on the sector. When Tsakos' grandmother was growing up, her family, who have owned ships since 1880, were captain-shipowners taking Chios's lemons and other cargoes around the Mediterranean. In 1970, her son, Panagiotis Tsakos, founded the private Tsakos Group, which owns 61 vessels, mainly dry bulk carriers for products such as iron ore.

By the time she died, another family enterprise, Tsakos Energy Navigation (Ten), whose chief executive is Nikolas Tsakos, was listed on the New York Stock Exchange. The company, which owns 43 oil and gas tankers, is still 30 per cent owned by family interests.

The half-public, half-private model is becoming increasingly common among the clutch of larger owners that stand out among the 1,000-plus shipowning companies in the country.

George Economou, chief executive of DryShips, the largest publicly listed dry bulk shipowner with 38 ships, holds another 52 dry bulk ships and 23 tankers through Cardiff Marine, his private company.

Stelios Haji-Ioannou, founder of easyJet, the budget airline, founded Stelmar, a New York-listed tanker operator since taken over by a competitor, before entering the airline business. At the same time, his father was maintaining privately held Troodos Shipping, one of the world's largest owners of oil tankers.

The challenge for Greek shipowners is to blend the advantages that come from public listings with the traditional strengths of the privately owned companies.

According to Nikolas Tsakos, the listing trend started partly because of the pressure, after pollution disasters such as 1989's Exxon Valdez oil spill in Alaska, to be open and accountable.

Need for maturity

He became interested in public listing after writing a thesis at London's City University in the 1980s on the role of publicly listed partnerships in real estate, which he saw as a similar industry to shipowning.

"I felt that the industry needed to mature and go onto the equity markets," Tsakos says. The family first listed the now-defunct Global Ocean Carriers on the American Stock Exchange in 1988 and took TEN public - initially on the Oslo Stock Exchange - in 1993.

Gabriel Panayotides, chairman and controlling shareholder of Athens-based, New York-listed Excel Maritime, says listing has also brought quicker, easier access to capital than the traditional accumulation of retained profits. "The capital markets do offer this mechanism of being able to attract large capital," he says.

Public listing also guarantees owners their legacy will not dissipate like that of Aristotle Onassis and the other Golden Greeks who dominated the post-second world war shipping boom, according to John Coustas, president and chief executive of Danaos Corporation, an Athens-based, New York-listed shipowner.

"If you look around all the big names of the 1960s - Niarchos, Onassis, Latsis, every one guys who were really kings of the oceans - now their presence is either zero or minimal," he says. "That's because really nobody in the second generation was interested."

However, the worry is that Greek owners' traditional adroitness in buying or selling ships just as volatile markets are changing could be sapped by the need to meet public disclosure requirements.