Global Ocean Carriers Seeks Perpetual Status

The real money in shipping, says Michael G. Jolliffe, president and CEO of Global Ocean Carriers Ltd., isn’t to be made in chartering ships, but in the sale and purchase market.

This is the basic reason why the management of Global, which is holding its annual meeting on May 21 in Geneva, Switzerland, is seeking to turn the company into an ongoing concern.

Like many of the shipping IPO’s set up in the late 1980′s, Global Ocean was set up as a company with a limited life span. To attract investors to the shipping industry, the company purchased older vessels, passed along cash-flow to shareholders in the form of dividends, and planned to dispose of its fleet when prices turned up.

But the market has zigged when many in the industry thought it would zag. Last summer, dry cargo rates as measured by the Baltic International Freight Futures Index hit their lowest level since the summer 1987, bunker fuel prices zoomed last fall after the Iraqi invasion of Kuwait, and secondhand ship values plummeted – though in recent months they have begun to rise.

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