Ultrapetrol: Stressing the Importance of Relationships

by Alan Ginsberg

Sometimes picking a winner is easier than you think it is. We were sold on this deal before we finished reading the Summary. The first page of the Offering Memorandum reads like poetry: “The Company… has concentrated on providing specialized oil products transportation for an identified group of customers through direct contracts rather than through contracts arranged by ship brokers. This approach enhances customers’ ability to transport cargoes at agreed rates generally without regard to the uncertainties associated with the spot, or single voyage, charter markets. In 1997, approximately 3% of the Company’s revenues were derived from operations in the spot charter markets.” By the time we finished reading the laundry list of oil companies who are major customers of the Company (see box) are hearts were all aflutter. Please do not get us wrong, there are risks in the deal. But the credits in this deal greatly outweigh the debits.

This is only an excerpt of Ultrapetrol: Stressing the Importance of Relationships

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