Unlocking Capital in the Shipping Industry: Seanergy Maritime Holdings’ Approach

In the latest episode of Capital Link's Expert Talks podcast, Anthony Paizes , Partner and Head of Ship Finance at Hill Dickinson's Greek office, sits down with two prominent figures from Seanergy Maritime Holdings, CFO Stavros Gyftakis and General Counsel and Corporate Secretary Theodora C. Mitropetrou . The episode centers around the theme of Access to Capital and explores how Seanergy Maritime has raised capital through various financing strategies, offering valuable insights into the evolving landscape of ship financing.

To watch the full interview please follow the link below:

Seanergy Maritime Holdings at a Glance

 Seanergy is a Nasdaq listed shipping company specializing in dry bulk transportation, specifically focusing on the Cape-size segment. The company operates 19 vessels, including 18 Cape-size vessels and one Newcastlemax, with a total cargo carrying capacity of approximately 3.42 million deadweight tons. These ships are engaged in transporting key commodities like iron ore, coal, and bauxite, with contracts primarily tied to major global miners and operators such as Cargill, Glencore, and Uniper.

Seanergy has adopted a strategy that relies on index linked time charters, allowing it to maintain predictable, long-term revenue while still benefiting from favorable market conditions. According to Ms. Mitropetrou, Seanergy's management, led by CEO Stamatis Tsantanis, has driven significant growth through a combination of modern fleet management, freight hedging, and strategic acquisitions.

Additionally, Seanergy has shown committment to sustainability, by implementing an ESG strategy aligned with global reporting standards such as the Global Reporting Initiative and the Sustainability Accounting Standards Board. This commitment extends to reducing environmental impact and promoting corporate responsibility, as evidenced by their use of green loans and other ESG-linked financial instruments. 

Diversifying Capital Sources: Bank Loans and Beyond

Traditionally, the shipping industry has relied heavily on bank debt, but regulatory pressures and increased selectivity from traditional lenders have prompted companies to seek alternative sources of capital. These sources include public offerings, private placements, export credits, sale and leaseback agreements, and even crowdfunding platforms.

Mr. Gyftakis shed light on Seanergy's approach to capital access, pointing out that being listed on Nasdaq allows them to tap both public equity and debt markets. Over the years, Seanergy has diversified its capital structure, balancing between traditional bank loans and sale and leaseback agreements, particularly with Asian financial institutions. This strategy became essential following the market crash of 2016 when many traditional shipping lenders withdrew from the sector.

Mr. Gyftakis discusses how these transactions offer competitive terms while providing flexibility in terms of covenants and repayment schedules. Notably, in 2018, Seanergy entered into a groundbreaking sale and leaseback deal with Cargill, which included financing for scrubber installations.

Today, Seanergy's debt is evenly split between traditional bank loans and sale and leaseback agreements, which Mr. Gyftakis believes has helped the company build a solid reputation across continents. By maintaining strong relationships with both European and Asian lenders, the company has managed to attract interest from various financial institutions, including some of the industry's largest names in leasing.

Sustainability Linked Loans

Sustainability is becoming an increasingly important factor in shipping finance, and sustainability linked loans currently offer attractive terms for companies that demonstrate a commitment to reducing their environmental footprint. Seanergy has embraced this trend, with around one-third of its debt portfolio now consisting of sustainability linked loans. This move aligns with the company’s broader ESG strategy, signaling its dedication to meeting the industry’s carbon reduction goals.

Ms. Mitropetrou elaborates on the company’s ESG efforts, emphasizing that Seanergy's sustainability financing helps them comply with environmental regulations while also securing necessary capital. The company closely monitors its fleet's environmental impact using advanced performance systems that provide real time data on fuel consumption and emissions. This technology helps ensure that its vessels meet both current and future regulatory requirements, including IMO’s target of net zero emissions by 2050.

When asked about future plans to invest in alternative fuel capable vessels, Ms. Mitropetrou clarifies that while the current average age of Seanergy’s fleet (around 20 years) means the 2050 regulations don't immediately apply, the company remains open to evaluating future opportunities in green technology and alternative fuels.

Raising Equity during Uncertain Times

Turning back to the topic of equity financing, in regard to Seanergy's recent efforts to raise capital in the U.S. markets. Mr. Gyftakis explained that the company raised $75 million through a direct public offering in 2021. This was a well-timed move that took advantage of a favorable market, allowing the company to purchase vessels that appreciated shortly thereafter.

Currently, Seanergy has a $30 million ATM offering in place, combined with a buyback program of similar size. Thus enabling the company to be flexible, buying back shares when the price is low and issuing new shares when the price is high.

Mr. Gyftakis also touched on Seanergy's spin-off, United Maritime Corporation, which followed a similar capital raising approach but on a smaller scale. Despite issuing equity at a slight discount when first listed, the funds raised were used to purchase discounted tankers, which were later sold at twice their acquisition price.

The Role of Asian Financing Institutions

One of the most important takeaways from the discussion is the growing importance of Asian financial institutions in ship financing. Japanese and Chinese leasing houses have emerged as significant players in the industry, offering competitive financing solutions tailored to the needs of companies like Seanergy. Mr. Gyftakis noted that since 2018, they have worked with a range of Asian financial institutions, securing financing for about 10 of their vessels through these partnerships. These arrangements now account for roughly 30% of the company’s fleet.

Predictions for 2025

When discussing the year to come, Mr. Gyftakis anticipates that while traditional bank loans will remain a significant source of funding for shipping companies, the trend toward alternative financing agreements and loans will continue to grow. Mr. Gyftakis also mentioned that while European lenders are still important players, they face increasing competition from Asian and Australian financial institutions. This competition has been beneficial for shipowners, as it has driven down borrowing costs and offered more flexible financing structures. Nevertheless, as the competition among leaders intensifies more traditional players are required to evolve in order to keep up with the tide.

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