Re-post: ‘Not all equal’: Why Aristides Pittas’ latest spin-off could actually work for investors
Original article as featured in TradeWinds via their Streetwise newsletter.
When a New York-listed Greek owner began 2025 by spinning off three older containerships into a separate public listing, it could be forgiven if a certain amount of eye-rolling ensued.
After all, haven’t we been down this road before, usually with Greek owners employing the New York-based investment bank Maxim Group?
Shares get issued, shares lose value, investors gripe, and a reverse stock split may follow.
Rinse, wash, repeat.
Not like the others
Except this deal looks different, as has been pointed out to Streetwise by shipping financier and investor James Lightbourn, whose resume includes experience at places such as Arctic Securities, CIT Bank, Alterna Capital and OSM Maritime.
Lightbourn first held forth in a LinkedIn post why not all of these Greek spinoffs should be placed in the same pot. He met with us this week to expand on that idea.
The latest spinoff proposal comes from Euroseas and offshoot Euroholdings. And as Lightbourn notes, the Aristides Pittas-led company has been down this road — and with decent results.
In 2018, Nasdaq-listed Euroseas spun off six dry bulk carriers into a new entity EuroDry. The offspring held its share value over the first year of trading, falling by only 0.7%.
If that performance doesn’t sound overwhelming, consider the outcomes Lightbourn is comparing it with:
2021 Diana Shipping spins off three dry bulk carriers into OceanPal. Shares decline 95.7% in the first year.
2021 StealthGas hives off four tankers into Imperial Petroleum. Shares sink 95.4% in the first year.
2022 Castor Maritime — based in Cyprus— spins off eight tankers into Toro Corp. Shares decline 57.7% in the first year.
2023 Imperial Petroleum sends two bulkers into C3is. Shares plummet 99.9% in the first year.
“Most of those spinoffs have been disastrous even looking at the share price 12 months after the spin,” Lightbourn told us.
“I looked at the spinoff of EuroDry and it was interesting to note the contrast with that more recent batch.”
But the rationale in favour of Euroholdings doesn’t stop there.
The combined market capitalisation of Euroseas and EuroDry at the 30 May 2018 spinoff was $27.6m. Measured a day later, the combined value was $38m.
This represents a 38% increase overnight when, in theory, the numbers should have been unchanged.
What happened then could happen again with Euroholdings, though likely at a smaller premium, he reasons.
Lightbourn tells us he is long on shares of Euroseas in anticipation of the transaction but has no other business relationship with the company.
The finance man says his chief motivation in sharing the analysis is trying to make clear that not all of the recent deals are built the same way.
“They’re not all created equal,” Lightbourn said. “The market can tend to paint things with a very broad brush and sometimes that’s not warranted when you look into the respective managements of these companies.”
Asked what made the Maxim-tied pack of deals different, Lightbourn noted a key factor.
“Most if not all of those companies had dilutive follow-on equity offerings after they were spun out.
“If you had to isolate one difference it was those dilutive offerings which often came with detachable warrants. These also were made possible by dual-class shareholding structures that protected management.”
Put another way, management could shelter its control position from dilution even as common shareholders suffered.
Like most public shipping companies, Euroseas is currently trading at a steep discount to its net asset value — about 50% of NAV, Lightbourn estimated.
If the ships entering Euroholdings are valued the same way, they’ll be about even with their scrap value, he said.
Meanwhile, the vessels have charter cover and a visible revenue stream.
Euroseas has announced that one of the three — the 2,008-teu Diamantis P (built 1998) — has been sold to an unrelated third party for $13.15m.
Euroholdings will book a gain of about $10.2m from the sale, which will stay in the coffers of the new company.
“So now they have cash on the balance sheet. There is contracted charter revenue and then the terminal value is the scrap value. I think the appeal is the simplicity of the valuation. It doesn’t leave a lot of ambiguity,” Lightbourn said.
Lightbourn is currently serving as an investor and independent financial advisor under his own Cavalier Shipping banner. But he’s worn quite a few hats since entering shipping a dozen years ago.
He grew up in the Bahamas. His family expanded a construction company into ownership of a fleet of small vessels, later transforming into a stevedoring business in the Port of Nassau.
Lightbourn’s first job out of college was with MSC in New York was “data entry and filling out bills of lading”.
He recalls booking off sick one day to attend a Marine Money conference in Manhattan. It stoked his shipping interest and led to a job at sale-and-purchase brokerage Compass Maritime, where he spent time learning vessel valuations.
Next was a job with CIT in New York under then-shipping chief Svein Engh, followed by a stint with alternative financier Alterna.
Lightbourn went to work with OSM and ADS Maritime in 2019, leading to the chief financial officer’s post at the newly launched Norse Atlantic Airways.
He worked mostly recently in the New York outpost of Arctic Securities from June 2022 to September 2023 before that office closed.
Now under his own shingle in Norwalk, Connecticut, Lightbourn splits his time between some investments and “an advisory business, acting as an outsourced CFO and putting some deals together,” with a keen eye on others’ deals as well.
Disclaimer: I am long shares of Euroseas in anticipation of the Euroholdings spin-off.
This post is strictly for informational purposes and should not be considered investment advice.
