Rickmers Maritime Trust

[money]

Depreciation is a genuine expense.

For companies like First Ship Lease & Rickmers Maritime, their managers have never set aside any funds for buying new ships. They are now desperately setting aside funds to pay down debt. In 10-20 years time, after they have paid down all the debt, the ships would be too old and have to be scrapped. The share price drops to near zero as there is no more cash generating ships.

Well before that day arrives, the operating managers from the above 2 trusts will once again raise $$ via rights from naive shareholders.

Perhaps, we can put things into perspective. buffett has never done a rights issue through berkshire hathaway. Our shipping managers will eventually have to raise rights to replace ships that have reached their lifespan, this could have been avoided if they set aside $$ for buying new ships and they cant do that because they are busy shrinking their leveraged balance sheet.

I would urge all current shareholders to dump their shares in these 2 companies. Off my head, K-Green should generate more real yield than these 2 shipping companies in the long run.

*not invested in FSL, RM or K-green

Took 4 years before Rickmers is brought down to its kness. However, FSLT will most likely survive. Now, notes holders for RM will have to take up to a 60% haircut, shareholders are left with pathetic shares that will easily pay no dividend after restructuring. Try discounting its dividend cashflow for the next 10 years, i think RM is close to worthless for shareholders now.