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Economou buys MatlinPatterson stake in four LNG carriers

Deal, understood to be worth $320m, ends US court case launched by private equity firm

Greek owner George Economou has swiftly headed off a court battle with former partner MatlinPatterson by buying four liquefied natural gas carriers that have been under their joint ownership since they were delivered in 2014

GREEK shipowner George Economou has acquired four liquefied natural gas carriers.

The deal settles a dispute between partners that led to a lawsuit being filed in the New York state Supreme Court.

The case, brought by the vessels’ owning company Oceanus against Mr Economou and son Christos, who heads the family TMS Cardiff Gas shipping arm, has now been dropped.

Lloyd’s List understands that the shipowner has taken over the four 160,000 cu m vessels for a total price of about $320m, including assumption of debt.

The LNG carriers were all built at Daewoo Shipbuilding and Marine Engineering in 2014 for Oceanus, an investment company owned 85.7% by MP, an affiliate of US private equity firm MatlinPatterson, and 14.3% by Mr Economou through his Seed Capital Initiative.

The seven year-old tri-fuel diesel-electric vessels — Corcovado LNG (IMO: 9636711), Kita LNG (IMO: 9636723), Palu LNG (IMO: 9636735) and Yari LNG (IMO: 9636747) — are all employed on time charters with varying durations of between one and three years.

All of the vessels are believed to be earning daily rates of about $40,000 under the respective charters.

MatlinPatterson had been looking for ways to exit the investment for some time. The fund that invested in the quartet is believed to have been scheduled to mature in 2017.

The four vessels were included in a mooted fleet of 16 LNG carriers, drawn from three or four different ownerships, that was being discussed for The Cool Company, a proposed public vehicle to exploit the emerging spot market for LNG carriers.

However, the plan twice crumbled as highs in the spot market failed to last long enough for such a venture to float.

Last year, claimed Oceanus, a buyer had emerged for the four vessels but the legal filing accused the minority partners of trying to “sabotage” a sale, partly through entering “below-market” charters.

Mr Economou said he was prevented from discussing the matter as the terms of the settlement were confidential.

Last month he told Lloyd’s List the claims were unfounded and that a cash offer for the four ships had never been received.

It was illogical to claim that TMS Cardiff Gas had chartered out the vessels at unremunerative rates to discourage buyers if the motivation was to buy them himself, he said.

Another potential buyer for the vessels was GasLog and it is thought that it had offered to pay for the vessels in GasLog shares.

Buying out of the majority partner in the four vessels expands the fleet controlled by TMS Cardiff Gas to 16 LNG carriers.

Of these, 11 new vessels with X-DF propulsion have been under construction at Hyundai Heavy Industries and Samsung Heavy Industries. Seven of these so far have been delivered while four are still to be completed.

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