Viking Raid
Page 14
“Ja, but this is just fair wear-and-tear,” Coco proclaimed, laboring to push any thought of Alexandra Meriwether out of his mind. “And this type of thing is permitted according to the charter party. You can put her off hire while we make the necessary repairs,” Coco said, meaning that Rocky would not be responsible for paying the daily charter hire while the ship was out of commission. “I believe she’s in the Caribbean right now so I can have her in and out of the Cuba dry dock in two days.”
“Whoa!” Rocky laughed. “Did you just say Cuba? You’re not trading with the enemy again, are you pal? I might just have to make a drop a dime on that one. I bet OFAC’s got you on their speed dial by now.”
“I said Curaçao,” Coco seethed.
“Doesn’t matter,” Rocky said. “Those boats may have your little Viking rowboat painted on the smokestack, but if the media finds out I put ARC’s crude oil on a broken down oil tanker owned by a guy who’s on INTERPOL’s “Most Wanted” list, I’m going to be treated like a cross between Tony Hayward and Joe Hazelwood,” Rocky said.
“I’ll substitute another vessel in for Alexandra,” Coco said. “I have plenty of others.”
“I bet you do,” Rocky said, “especially these days. Listen Coco, we both know those charters are finished. The only thing left to talk about is whether or not I’m going to kill your little IPO,” Rocky snickered.
Rocky DuBois hadn’t been happy that Coco had forced him into swallowing fifty years’ worth of time charters just so he could move thirty million barrels of lousy crude oil over the course of a few weeks, but when the old oilman read in TradeWinds that Viking Tankers was in the process of raising $500 million on the back of those usurious time charters, he was irate.
“I would be happy to cancel those time charters,” Coco said. “We can just pretend those charters never happened and you can wire me the $75 million that you would have paid me if you had taken those ships from the spot market during my tanker party,” Coco said.
“Are you suggesting that I’m a back-trader?” Rocky asked with righteous indignation. “I would never ask you to do such a thing. What I really need from you, Coco, is your expertise,” Rocky said. “I need your help.”
When his former roommate from University of Texas, Piper Pearl, called Rocky DuBois earlier that day and told him about Mr. Xing’s unusual condition precedent to closing – that ARC somehow gain control of fifteen gas carriers currently under construction at Regal Shipbuilding in South Korea – Rocky’s initial reaction had been to panic. He had tried to charter-in a few LNG carriers six months earlier and failed miserably.
After working with a team of shipbrokers in New York and London he learned there had been a shortage of such ships ever since Japan began systematically switching its source of power from nuclear to natural gas after the Fukushima meltdown in 2011. The Germans had also decided to switch from nuclear power to gas and the French were threatening to follow suit.
The problem was that the fleet of high-specification LNG carriers was small to begin with and most vessels were purpose-built to serve specific long-term contracts. The so-called “spot market” for the LNG ships was virtually non-existent so when demand for the ships increased charter rates jumped by five hundred percent almost overnight.
But a few minutes after Piper told Rocky the nature of Mr. Xing’s pre-closing requirement, the old Texan felt a warm rush of pleasure; he had been looking for a way to get even with the Coco Jacobsen before he retired and now he had it. Piper had offered to task his colleague Alexandra Meriwether with finding the ships, but Rocky was going to take matters into his own hands as well; he would simply threaten to cancel ARC’s ten time charters from Viking Tankers unless Coco found the ships for him. It would be the knock-out punch that would finally end Rocky’s sparring matching with Coco.
“You want my help?” Coco asked. “Is this some kind of joke?”
“It is my understanding, Coco, that there is a series of fifteen state-of-the-art LNG carriers currently under construction at a place called Regal Shipbuilding in Korea,” Rocky explained. “South Korea that is,” Rocky chuckled, “just in case you’re getting any funny ideas about dealing with Pyongyang.”
Coco didn’t know how much Rocky knew so the Norwegian decided to play dumb. “What does this have to do with me?”
“I need your help to figure out who owns them.”
“That’s the help you need?” Coco asked. “You just want to find out who owns those vessels?”
“Apparently they were sold recently and the new owner has remained completely anonymous, which I assume means it’s some scary government that an American like me isn’t allowed to do business with. And since you don’t seem to have any problem dealing with scary governments, I figure you are the right guy to negotiate terms and get a deal done for ARC to buy them,” Rocky explained.
“But why do you want to buy fifteen new LNG vessels, Rocky? You always told me that you hate owning ships,” Coco said as if they were an old married couple. “You told me you didn’t need to own a garbage truck just because you had to get rid of some trash every now and then.”
“There’s a bit more to this story, and in the spirit of working together on this, I’m willing to tell you what’s going on here,” Rocky said. “But you must agree to keep it confidential.”
The Texan knew full-well that he should keep his mouth shut like he always did when it concerned sensitive commercial matters, but the two glasses of Barbados rum combined with his potential cash windfall made him unusually chatty.
“You have my word of honor,” Coco replied as he crossed his fingers, a gesture that elicited considerable laughter from his team of advisors.
“The Minister for Natural Resources for the People’s Republic of China, a man named Mr. Xing, has agreed to buy my little business,” Rocky said.
“Why would they do that?” Coco asked as he wrote down the man’s name on a napkin – Mr. Xing, PRC.
“Because they’re hungry for my shale gas and I’m hungry to cash out while I still can,” Rocky said.
“Wow,” Coco said as he smiled, “it sounds like you and Mr. Xing really needs those LNG ships.”
“Big time,” Rocky said.
“I’ll really miss having you in the business, Rocky,” Coco said with the hollowness of a sibling who learns his brother is going away to school. “Shipping may not be a team sport when we’re in the heat of battle, but we’re all friends in the locker room,” Coco said. “We all sustain the same injuries.”
“I appreciate the towel snapping, Coco, but if I don’t get my hands on those fifteen LNG carriers then Mr. Xing won’t buy ARC,” Rocky said.
“Does that mean we are finally on the same team?” Coco said with an insidious smile as rubbed the evil eye charm against his unshaven face.
“For once, it appears our interests are aligned,” Rocky said. “So here’s the deal, Coco, you find me those ships and I will keep paying on those lousy time charters for the next five years.”
“I will try to help you,” Coco said, “but this will take some time.”
“How much time are we talking about?” Rocky asked. Both men knew exactly what was going on: the longer Coco dragged out the process, the more charter hire payments Rocky would be forced to make.
“A month,” Coco offered.
“You got ten days,” Rocky said. “After that I start handing back your lousy VLCCs in the most wretched ports in the world,” Rocky DuBois said and hung up.
Chapter 16
A Fragile Market
My grandmother had a simple saying about the cycles: “98 ships and 101 cargos equals boom, 101 ships and 98 cargos equals bust.” Bearing in mind my grandfather was a Captain and shipowner and she had travelled under sail with him on a small schooner from Kassos Island in Greece to the Black Sea, Marseilles, Casablanca, Buenos Aires, Boston and Liverpool over eight years, it came from the lips of a lady who had personal sea experience and had
learned well what she taught.
Mr. Nicholas A. Pappadakis, CEO, A. G. Pappadakis & Co. and Chairman, Intercargo
It was the kind of day when absolutely nothing could go wrong Robert Fairchild thought as he emerged triumphantly from the back of the black Lincoln Town Car in front of Malone Academy, the private elementary school where Oliver attended third grade.
After the chauffeur slammed the door behind him, Robert paused on the Upper East Side sidewalk, looked up at his beautiful wife standing in front of his stately alma mater and savored the prosperous residential surroundings. He felt bittersweet as he admired the hosed-down sidewalks and the rows of neat, four-story brownstones dotted with flower boxes thick with orange and red mums.
Robert had never felt better about the current state of his life, which made him question his decision to change it by moving his family to the island of Martha’s Vineyard and away from the richness of opportunity on offer in New York City. Then he remembered the objects of his desire: the backyard, the minivan, the dock, the hose, the garage, the sidewalks, the bikes – and maybe even the dog Oliver wanted.
On the business front, everything was going almost to plan. The roadshow had gained momentum thanks to the $250 million cornerstone order for preferred shares he’d received from the muscle-bound Luther Livingston. During the past seventy-two hours, the rented Hawker 900 had jumped like a grasshopper between Miami, Dallas, Denver and Detroit as Robert pitched twenty-six hedge funds and “soft circled” orders for another $325 million of preferred shares.
So confident was Robert about the success of the IPO that he’d instructed his teenage rent-a-pilots to return to Teterboro Airport in New Jersey so he could spend a couple of hours participating in “Career Night” at Oliver’s school before returning to Chicago where he had an investor breakfast in the morning. Although taking a break during an IPO roadshow was as advisable as taking a break during childbirth, Robert had always been guided by one simple principle that always trumped everything else: family first.
“For God’s sake, honey, will you please button up your shirt?” Grace Fairchild said as her husband ascended the stately stone steps of the elite Manhattan school – an institution so hard to be admitted to that Robert had actually fallen to his knees and begged the admissions officer. “You look like Johnny Depp in Pirates of the Caribbean.”
“I know you love Johnny Depp,” Robert said as he kissed her lips.
“Yes, but the feelings I have for Johnny Depp have no place in an elementary school and neither does your slightly hairy chest and unshaven face,” Grace said as she went to work tidying-up her husband’s disheveled and quickly-graying hair. “And will you please put away those worry beads; people are going to think we’re Catholic.”
“What’s the matter with being Catholic?” Robert asked as he slipped the worry beads Spyrolaki had given him at the Marine Club in Piraeus back into his pocket.
“Oh gee, honey, I don’t know,” she said as her husband took her hand and they crossed the stone threshold leading into the building, “how about the lack of birth control?”
“Then let’s try to have another one,” Robert whispered into her ear as they walked down the hallway. “Maybe this is a sign.”
After he made the proposal, the rhythmic clicking of his wife’s high heels stopped. She grabbed Robert’s arm and spun him toward her. “Another one?” she gasped.
“I think it would be fun.” Robert shrugged his shoulders, “and I know Oliver would enjoy it,” he added.
“You won’t let the kid get a dog and now you want to give him a baby?” Grace said.
“We can’t bring a dog into Il Cantinori,” Robert smiled. “Capische?”
“Don’t take this the wrong way, sweetheart, but your income isn’t reliable enough for us to have one kid in this city, never mind two,” Grace said.
“Which is why we’re moving out to Martha’s Vineyard,” he reminded her.
“You are truly crazy,” she said, shaking her head back and forth, “which is why I love you.”
“I know,” he smiled, “and I’m grateful.”
“By the way, I just got your paycheck.” she said. “It looks as though charter rates have taken a turn for the worse.”
“Welcome to shipping,” Robert said. “Once the market learned how high charter rates were, every ship in the world that could carry oil rushed back to the Arabian Gulf just when OPEC reduced production by a million barrels to try and increase the price of oil.”
“What about your little tanker party?” she asked.
“The lights have been switched on, the parents are home and the punch bowl has been taken away,” Robert said. “The party is over.”
“That didn’t last long,” she said.
“It rarely does, but don’t worry honey, once I get this IPO wrapped up we’ll never have to worry about the volatility of the marketplace again,” Robert took her arm and guided her down the hall toward Oliver’s classroom. “This deal is going to change our lives forever,” he added and immediately regretted his fateful choice of words.
“That’s good, Robert, because a loan officer from the Bank of Martha’s Vineyard called today and they want us to document the source of our $1 million down payment for the Captain Fisher House by the end of next week,” Grace laughed.
“Why?”
“Because apparently there is someone else that’s keen to buy the house if we aren’t able to close the deal,” she said, “and the sellers don’t want to lose them.”
“Don’t worry,” Robert said. “We’ll close the deal.”
“Okay Aristotle, it’s time for you to button up your shirt, put away the rosary beads and make Oliver proud,” she whispered after the soft jingle of the teacher’s bell summarily silenced the group of gregarious parents.
When Robert Fairchild stepped inside his son’s classroom, he was dazzled by the richness of the surroundings. From a chart of the human genome to a diagram of aquifers, from an outline of photosynthesis to an explanation of Penicillin and digestion, the small classroom was a place of worship for the inexplicably complex miracles that enabled even the simplest forms of daily life. The shelves were sagging with books and games and puzzles and blocks and even the floor was covered with information like maps, geometric shapes and various calculations of distances and angles.
As Robert waited for Career Night to kick off, his eyes moved slowly over walls covered with butterflies and African masks, paper mâché animals from Australia, cloud formations, rainbows, spiders and sea creatures. There were Native American tools, beaver pelts, bird nests and snakeskins. A twenty-foot fish made from garbage the kids had found in Central Park hung from the ceiling and one entire wall was devoted to “365 Ways to Reduce Your Carbon Footprint.”
When Robert scanned the litter of little children lying on the floor in the front of the classroom, it didn’t take him long to spot Oliver. His son was the only child wearing a black patch over his left eye, a clip-on gold hoop dangling from his ear and a red bandanna tied pulled tightly over his head – an unusual outfit considering it wasn’t Halloween.
As boys of that age sometimes do, Oliver Fairchild had become totally, utterly, encyclopedically focused on a singular subject. In his case the object of his obsession wasn’t baseball statistics or types of heavy machinery or railroad schedules or even state capitals – it was piracy. The boy loved pirates.
Robert had attempted to explain to his son what piracy actually involved in the modern age: desperate people in destabilized countries that robbed, tortured and killed innocent seafarers as their ships passed by – but that wasn’t enough to unwind the romantic notions of piracy that had been drilled into him since birth. Robert even shared with his son the story about his own experience with piracy when his bulk carrier Lady Grace was attacked by a longboat loaded with machine gun-toting Somali pirates in the Gulf of Aden, but the anecdote did nothing to diminish the lad’s penchant for privateering.
“Good evening!” an indefatigable third-grade teacher named Mrs. Martha boomed to the large group of children and parents packed into the classroom. “I want to thank all of the parents for coming in tonight,” she said. “The children are as proud of you as you are of them. We are very fortunate to have Mr. Robert Fairchild, Oliver’s father, as our first presenter tonight,” she said and began to scan the room expectantly, hoping he had arrived.
Grace squeezed Robert’s hand, “I’m so proud of you, too.”
His wife’s breathy voice whispered directly into his ear made Robert want to go back to their apartment after Career Night and not back on the tin can of a rent-a-jet. Then he reminded himself that there would be plenty of time to relax when the IPO was done and they were living on “island time.”
“Thanks, Grace,” he said.
“And I know how hard you are working to protect Oliver and me,” she added. “I want you to know how grateful I am that you are so careful with us.”
Grace’s eerie choice of words made Robert’s heart flutter. In his mind, he had neither protected them nor been the least bit careful. In fact, he had recklessly wagered Oliver’s shares in Viking Tankers, the family’s only meaningful asset, double or nothing, on a harebrained shipping scheme cooked-up while drunk in a London pub. Unlike most shipowners who spread their bets among different ships and markets, Robert Fairchild was all-in.
“Mr. Fairchild informed me that he has just come in from the road in a private jet to be with us tonight,” Mrs. Martha giggled.