Favilla (Express Holding) explained the strategy of its fund for Italian shipping
Besides the relaunch of Finbeta (which is already looking for modern vessels), the new platform will focus also on dry bulk
Genoa – Following the recent take-over of the Savona-based shipping company Finbeta, the Italian shipping industry welcomed the newly established Express Holding platform, headed by Paolo Favilla. The latter has long been working for Aldo Grimaldi, first at Grandi Navi Veloci, and then at Grimaldi Holding, and he was also the Italian representative of the Genting group, active in the cruise and shipbuilding sectors.
In fact, a few years ago partner and founder of the financial advisoring company Kt Finance Favilla started to actively deal again with shipping. More precisely, since Express Holding started purchasing non-performing credits with bulk carriers as underlying assets. Before taking over Finbeta on July the 31st, the company already owned one handysize and one supramax bulk carrier, managed through a partnership with ESA Shipmanagement.
As a matter of fact, the credit institution (Banca Carige), the shipping company facing difficulties (Finbeta) and the future financial investor (Express Holding) met thanks to ESA Shipmanagement managing director Gian Enzo Duci.
The Bertani family’s company had a debt exposure slightly above 60 million euro, and the non-performing loan was purchased at less than 30% of its nominal value (in line with market values).
Favilla explained to Ship2Shore that “Chemtank and its parent company Express Holding are an innovative platform” managing non-performing loans, and that in the future this model may be applied both to the liquid and dry bulk cargoes sectors.
“We do not want to be simply one of the creditors, rather we make transactions only if we have the absolute majority. We want to be the ones who lead the game”, explained Favilla.
As concerns the Finbeta deal, they did not take over the non-performing loans by acquiring the credit in exchange for equity financial instruments, rather they did so by liquidating the position completely, thus discharging the company fully.
On top of that, they allow the shipowner to carry out its activity, although the ships no longer belong to him, or he only holds a small share in them.
In fact, Luca and Alessandra Bertani currently hold a 5% share, which may increase in the future, depending on the results achieved. In any case, they still manage the company and its commercial relations.
Talking about Express Holding’s approach to the shipping sector, Favilla explained that “the management of NPLs created a clearing house between finance and enterprises”, and that is exactly where they want to operate. “Since the bank cannot manage the assets related to bad debts directly, and since restructurings are continuing for too long over the years, the capital gets consumed because meanwhile assets get old and lose value”. The new platform aims at preventing this from happening.
At present, Finbeta has no debts and a high capitalization (its debt was converted into capital), and it boasts a consolidated commercial presence in a niche market, i.e. the Baltic sea, which many operators did not manage to enter.
The renewed shipping company is also planning to modernize its fleet (having an average age of 19 years), although holds made of stainless steel ensure a long useful life. The company achieves an annual turnover of some 25 million euro, with 20 employees and 150 crew members working on its 5 ships, who must necessarily be managed internally, both at a technical and at a commercial level (for which the company has a specific office in Hamburg, where it operates through Chemcharter).
“Usually NPL operators focus only on the book value of the asset, while we took into careful consideration also the value of goodwill, which has a special strategic value for a company such as Finbeta”, continued Favilla, pointing out that, in turn, the company “may become a platform to carry out other future transactions in the liquid bulk sector”.
Our priority is consolidating our activity and relaunching our business. Finbeta is looking for opportunities to renew its fleet. “To that end, two ships are being visited in Turkey”, Express Holding head continued, preferring a bare boat charter rather than a purchase.
Finally, as concerns the dry bulk sector, he revealed: “So far, we created a centre of expertise to manage a dozen ships with Esa Group. In 2020, we might carry out a transaction like the one involving Finbeta in the dry bulk market, thus taking over an entire company”.