Bob Burke

‘Shipowners at heart are somewhat of a gambler’

Bob Burke on the freewheeling freedoms of being a private shipowner

Arguing the case skilfully for being a private rather than public shipowner was Bob Burke at Marine Money’s recent London Ship Finance Forum, who found himself on a panel with Gary Vogel from listed Eagle Bulk (see page 31).

The Ridgebury Tankers boss said he preferred the free reins he had to operate and argued his access to capital was as good as any listed counterpart’s.

“Public companies have a bit of a different agenda than the private companies,” Burke told delegates.

At Ridgebury, Burke said he could buy up an assortment of assets based upon how his company sees value with different parts of the age profile or asset class while most public companies have a “story” or “investment thesis” that they have to stick to fairly consistently.

“They can’t be all over the place otherwise their investors don’t know what they’re doing, they send mixed signals and it takes time to change,” Burke said.

At Ridgebury, Burke recounted how he was able to very quickly transition from product to crude tanker purchases.

He did praise public companies for being efficient, professional sellers, unlike many private firms who can dither and change terms.

Burke also took time to slay the often trotted out line that public companies can access capital easier.

“With good investors behind you and a proven track record of what those investors will do if there’s a problem and a management team that has responded over time proactively to what the what the lenders expect you to do there’s as much access to capital as a public company,” Burke said, adding: “ As a private company we don’t have an ATM and a lot of the other things that [listed companies have] access to but we have shareholders with big wallets.”

Then there is the issue of NAV - the purchase price, the cash flow and the exit price.

Buyers of public companies often do not realise the exit value, Burke suggested, quipping: “What buoys the S&P market is the biggest fool in the world at that point in time puts a higher value on on the exit price so it over-inflates what’s the so-called NAV.”

Ultimately, Burke said it was horses for courses. “Shipowners at heart are somewhat of a gambler and I think what the public companies provide is more of a trading platform for that asset class during a shorter period of time. They know they can get in and out efficiently if they have confidence in what the management’s doing,” he concluded.●

Spot on Ridgebury Tankers

US-based owner with mix of VLCCs, suezmaxes and product tankers led by Bob Burke.