Euronav chief executive officer Paddy Rodgers dominated attention at the Marine Money conference in New York with his outspoken opinions on public markets, customer relations, Korean shipyards and Scorpio president Robert Bugbee.
“In shipping, we always say, ‘Don’t fall in love with the assets’. You also shouldn’t fall in love with your customers,” claimed the head of the NYSE-listed tanker major. “It would it would be terrible if I was great friends with my customer and a stranger to my shareholder. I want a satisfied customer, not a happy customer. I want a happy shareholder.
“If I end up having a great relationship and going on holiday with somebody in an oil company and the [tanker] company doesn’t get the value it deserves [from its business with that oil company], I’m letting myself down, I’m letting this industry down and I’m letting my shareholders down.”
Rodgers also reiterated his long-running argument against newbuilds. “If you were a big real estate owner in Manhattan, you wouldn’t go and organise building another Manhattan, would you? You would just wring every last dollar out of value out of the Manhattan you’ve got. That’s the way shipowners have to think. Building more ships is the worst investment you could ever make.”
Rodgers jokingly referred to Korea as “that dreadful place [one] must never go to…l mean the shipyards, of course. It’s a lovely country”.
He described the three former executives of tanker company OMI – Kathleen Haines, Craig Stevenson and Robert Bugbee – as “the good partner, the bad partner and the very naughty partner”. He opined that Haines had gone on to become an executive of the Heidmar pool, which supports consolidation; Stevenson went on to Diamond S and ordered new ships “with private equity, other people’s money”; and Bugbee went on to Scorpio Tankers where he was “a very naughty boy” whose private-equity-backed company ordered a huge number of newbuilds.
According to Rodgers, “The disparity in the way people are rewarded for their investments with other people’s money makes a mockery of public markets. This is not what public markets are about. Public markets are not about taking egregious fees for raising capital and ordering assets. That’s no achievement. The achievement is running those assets and returning investments to shareholders.”
Rodgers also voiced a controversial opinion on why shipping companies went public several decades ago versus the rationale required today. “When people first talked about capital markets and shipping in the 1990s, it was a ‘bigger fool than I’ theory,” he claimed. “The idea the idea was that shipowners, who were very clever, were going to find some mugs on Wall Street to buy their ships at ridiculous values. This is a broken model. If that’s what you’re thinking today, this isn’t the right place for you.”