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the lunch

Illustration of Angeliki Frangou, founder, CEO and chairwoman of Navios Maritime Holdings Inc.The Globe and Mail

A 14,000-ton freighter, the Fulvia, lay in Rio de Janeiro, unloved and very much for sale. It was 1990 and the Brazilian economy was in one of its periodic messes. Surely the rotting dry-bulk carrier would find no buyer.

The sight of a young woman inspecting every aspect of the ship, from its wheelhouse to its engine room, must have seemed incongruous to the burly men in the shipyard. The woman was 25, and so obviously not the captain.

Who was she, what would she possibly know about ships and why would she want one in this economy?

The woman plunked down $1.5-million (U.S.) for the ship and, with it, began to build an enterprise that, by 2011, got her on Fortune magazine's list of the world's 50 most powerful businesswomen.

The Fulvia would spawn a shipping empire. The woman who walked the Fulvia's decks in 1990 is Angeliki Frangou, founder, CEO and chairwoman of Navios Maritime Holdings Inc., one of the largest and fastest-growing Greek-controlled shipping companies. At last count, the Navios group of companies – three of which are listed on the New York Stock Exchange – had 119 ships under its command, plus nearly 300 barges and small tankers that ply the Hidrovia river system between Paraguay and the Uruguayan coast.

In Greece, where control of shipping companies is considered a virtual birthright, she is the executive to watch; a potential Aristotle Onassis in the making, though adorned with pearl earrings and a necklace. Her family is from the Aegean island of Chios, near the Turkish coast. "The island has a long tradition in shipping," she says. "Absolutely everyone was working in shipping there. The baker came from another island."

The Fulvia is long gone, but it "was a great investment," Ms. Frangou says. "I wanted to have my own business, so I took the challenge to reactivate the vessel. I supervised everything. Everything had been stolen. You opened the machinery and the parts were missing inside."

The ship was ready to resume service within four months, by which time its value had doubled, she says. The overhauled Fulvia made its first voyage to the United States, a trip that made her a small fortune. She was hooked by the industry's profit potential. She would abandon her career as a Wall Street analyst and become the fifth generation of Frangous to make their living off the high seas.

Navios's base of Piraeus has been Athens' port district since the fifth century BC. Today, it is Europe's largest passenger port terminal, an expanse of towering white cruise ship hulls tethered to wharves. While the city bustles with activity, it has a grubby and run-down feel, and the millions of tourists who land here generally flee to Athens or to the Aegean islands.

The Navios headquarters, a nondescript seven-storey glass box, fits right into the shabby port atmosphere, hardly reflecting the status of Ms. Frangou's company. Inside is a different story, though: a study in cool, open modernism, inspired by Ms. Frangou's stint on Wall Street.

The decor in the reception area and meeting rooms consists of model ships and small gold-coloured axes in glass boxes. Each axe was used to christen a new Navios ship by cutting the tether fastened to the champagne bottle that smashes against the hull.

I realize that Ms. Frangou has amassed considerable wealth when I examine a grouping of curious clay figurines, all armless, displayed behind plexiglass. The arms of these clay characters from China's Tang Dynasty, a three-century reign that ended in the year 907 AD, were made of wood and so didn't survive the centuries. "I enjoy ancient Greek and Byzantine antiquities," she says. "Ancient Chinese antiquities, I love."

A divorced mother of one, Ms. Frangou is dressed in a dark, masculine-but-elegant pin-striped suit. Her silver-grey hair is short, almost punk-inspired; her eyebrows dark and thick. She offers a warm smile and speaks fluent, though heavily accented, English.

This being a port town, the kitchen staff, clad in nautical white, give us the full seafood lunch treatment in the vast Navios boardroom overlooking the harbour: Plump shrimp to start, followed by pan-fried Mediterranean red snapper as thick and meaty as a Texas T-bone (two big helpings for me), served with asparagus, baby potatoes and steamed carrots. The meal is paired with a crisp Greek white. Simple and delicious.

Ms. Frangou barely touches her meal or the wine, not because she isn't hungry, but because her enthusiasm about shipping and the companies she has built compels her to keep talking. "I'm not a workaholic, but one of my hobbies is work," she explains.

She speaks frankly about politics, especially about the dead hand of the Greek state and why shipping companies, Greek or foreign, should remain shielded from taxes because their earnings are made on the stateless high seas.

Ms. Frangou acknowledges the help she received in getting started, explaining that her father, Nicolas Frangos, provided the funds she needed to buy the Fulvia. She calls her father "captain." At 86, he still runs a few ships. At one point, he had about 50 vessels. Nicolas's father and the father of Athina Livanos, Aristotle Onassis's first wife, were partners in the shipping industry.

As a teenager, Ms. Frangou would cross the Atlantic on one of her father's vessels, but needed time to be convinced that a shipping career was for her. She was more interested in mechanical engineering and so studied the subject at New Jersey's Farleigh Dickinson University, and then completed a master's degree, also in mechanical engineering. She decided to bolster her career prospects with an MBA from New York University, but never graduated because she took a job as an analyst on the trading floor of Republic National Bank, where she worked from 1987 to 1989.

The bank job changed Ms. Frangou's life because it exposed her to the world of financial engineering. She worked with credit default insurance, which taught her how to judge risk and how to hedge, as well as the dangers of excessive leverage in a highly cyclical business. Indeed, applying the principles of high finance to the more down-to-earth business of filling cargo holds with soya, wheat and oil products gave her an edge in an industry that has suffered greatly since the financial crash of 2008.

After the Fulvia success, Ms. Frangou went to ship auctions in Brazil to buy and restore orphaned vessels. In 2004, she zeroed in on special purpose acquisition companies, or SPACs, as a vehicle that could bring her business to the next level. These entities, also known as "blank cheque" companies, traded over the counter in the American market, had no income and were designed to make acquisitions.

Ms. Frangou launched a SPAC with $200-million (U.S.) in investor funds and used the vehicle to buy International Shipping Enterprises, which United States Steel Corp. established in the mid-1950s to transport iron ore from Venezuela to Canada and the United States.

The new company, renamed Navios, became one of the very first dry-bulk shipping companies to list on a stock exchange. Traditionally, Greek shipping magnates had cherished their privacy. "A SPAC can take you public very quickly," she says. "I totally changed this market, which became a $10-billion business."

Suddenly, Ms. Frangou was an international shipping player and had access to public capital. She floated two more companies on the NYSE. The first, Navios Maritime Partners, a company that lured investors though its high-dividend yield, and Navios Maritime Acquisition, which runs a tanker fleet. The trio of public companies has a combined market value of about $1.8-billion (U.S.). A fourth company, Navios South American Logistics, runs a barge and port business in Uruguay and Paraguay. Ms. Frangou said she plans to take the South American unit public also.

The Navios group cruised through the financial crisis and recession with relative ease, even though the share prices tanked. The companies have managed to raise about $3-billion (U.S.) in debt and equity since September, 2008, the month of the collapse of Lehman Brothers. Bank debt was replaced by bonds, Navios vessels secured long contracts, providing cash flow stability, operating costs were trimmed by doing repairs at sea instead of shipyards and Ms. Frangou pioneered the use of credit default insurance, which protected her business when post-crunch customers could not meet their contract commitments. Meanwhile, Navios bought foreclosed ships from creditors at knock-down prices.

Her companies are now attracting "outperform" ratings from some analysts, including those at the Royal Bank of Canada, in spite of their financial complexity. Ms. Frangou is predicting a shipping rebound, but won't hazard a guess as to when that will happen. "After a crisis, the market will go up and whoever survives will be very wealthy," she says.

Meanwhile Ms. Frangou is making plans to expand – she is now loading up on container ships and working with a domestic economic think tank to find ways to create more shipping jobs for Greeks. She claims that most of the job growth in her country has come about by padding the bureaucracy – "in essence creating non-productive people." She believes that busting the powerful Greek shipping union would create tens of thousands of jobs.

Taxation is another matter. Neither Navios nor other Greek shipping companies pay a Greek income tax, though a small levy based on the ships' tonnage has been introduced.

Does Ms. Frangou think it's fair that Greece's biggest and best-known industry is legally allowed to escape taxation as the country grinds its way through a protracted recession? "To be honest, yes," she says. "If I am taxed here and have to compete internationally, I cannot compete. Then I close my business."



Daughter of Captain Nikolas Frangos, a fourth-generation ship owner.

Divorced; mother of Nicolas, age 1½, who travels the world with her.

Spends one-third of her time in Athens, a third in New York and a third elsewhere.

Owns houses in Athens, Chios, Monaco and New York.

Loves opera, especially Puccini's Turandot, and collects Greek, Byzantine and Chinese antiquities.


Bought her first ship, the Fulvia, in 1990, with a loan from her father.

Navios Maritime Holdings joins NYSE in 2005 through a reverse merger of one-time shipping fleet of U.S. Steel.

Floats Navios Partners and Navios Acquisition on NYSE in 2007 and 2008, respectively.

Named Commodore of the Year by Connecticut Maritime Association in 2011.


On the Greek crisis: "As a country, we can create beautiful things. We need to cut red tape, we need to have a transparent political system and politicians cannot have immunity [from prosecution]."

On personal wealth: "It's about the challenge. If it was about the money, I could have inherited from my father and done nothing and had a more relaxing time."

On business style: "What we care about is being a disciplined buyer. I can tell you that in 2012, I looked at more deals than ever in my life, and I did nothing."

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