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What You Should Know About George Economou

Protect Your Investment by Voting "FOR" Seanergy’s Directors on the WHITE Proxy Card

Economou’s Actions at Seanergy

  • Economou rapidly and stealthily acquired a ~9%6 stake in Seanergy starting in August 2023.7
  • Economou has at no point constructively engaged with us or provided any ideas regarding shareholder value creation.
  • Instead, without any prior communication of his intention to file suit, Economou initiated litigation against the Company in the Marshall Islands. He also nominated two closely-associated director candidates – Georgios Kokkodis and Ioannis Liveris – for election at the 2024 Annual Meeting, while also proposing “no-confidence” votes against our remaining directors.

As part of his self-interested takeover attempt at Seanergy, Economou has put forward two underqualified nominees who have both been associated with facilitating Economou’s prior self-dealing and value destruction:

Georgios Kokkodis

Served as a director at DryShips and Ocean Rig

Read More

Ioannis Liveris

Served as a director at Ocean Rig and as Economou’s nominee in other activism situations

Read More

Economou’s Other Self-Serving Campaigns

Economou’s actions at Seanergy are similar to the coercive tactics he has deployed at three other public shipping companies over the last year:

OceanPal

Oceanpal

Economou acquired a ~14% position, nominated Kokkodis and Liveris to the board and announced a no-confidence proposal which would result in the replacement of the entire board with his closely-associated nominees.8 But instead of pursuing his efforts to address the stated concerns about governance or proposing business changes which might have benefited all shareholders, Economou negotiated for himself a modern-day “greenmail” payment of $6.75 million9 (35% of OceanPal's market capitalization10), which contributed to OceanPal reporting a sizeable net loss for shareholders in their Q2 2024 earnings.11

Genco Shipping

Genco

Despite nominating two directors and indicating a desire to influence the long-term strategy of the company, Economou substantially exited his position after less than six months and after two leading proxy advisory firms recommended shareholders reject his nominees and proposals.12 Genco expressly stated that it had rejected Economou’s proposals for the company and made no changes to its strategy based on their engagement with Economou.13

Performance Shipping

Performance Shipping

Similar to Seanergy, Economou acquired a 9.5% position in Performance Shipping and is currently pursuing litigation and a proxy fight – once again nominating Ioannis Liveris.14 He is also pursuing a hostile bid to acquire a majority of Performance’s common shares at what an independent financial advisor assessed to be a greater-than-50% discount to their net asset value,15 on top of which he is demanding that the Performance Shipping board of directors grant him control of the company and wipe out other shareholders, funneling windfall profits to Economou.

While each of these situations may be different, the underlying story is the same: Economou deploying coercive tactics to gain substantial influence or control of these public companies or ransoming them for a short-term payout that benefits nobody but himself.

Economou’s Long Track Record of Value-Destroying Public Company Stewardship

Economou’s behavior with Seanergy is not new – he has a long and widely-documented record of exploiting control of public companies to enrich himself while destroying value for other investors.

This pattern is well-documented and reflects Economou’s playbook, which he has applied many times: he treats public companies like his own private fiefdoms, extracting value through a series of conflicted, affiliated transactions and arrangements that leave the companies – and other public company shareholders – worse off, while Economou profits, directly and through his controlled affiliates.

We believe his actions at DryShips, a dry bulk shipping company, and Ocean Rig, a deep-sea oil drilling company, serve as cautionary tales:

DryShips

DryShips

Economou took DryShips public in 2005 and reacquired the company in 2019, after destroying substantial shareholder value over ~14 years through conflicted transactions and poor stewardship.

DRYSHIPS Public Investors’ ExperienceS

  • Negative total shareholder returns of more than -99% from IPO until Economou took the company private in 201916 and billions of dollars of shareholder value destroyed
  • Extreme share dilution through a series of related party transactions with Economou-controlled affiliates, including a series of highly dilutive equity offerings in 2016 that reduced DryShips’ share price by more than 90% over the course of a few months17
  • Lucrative management fees that paid Economou and his affiliates more than $350 million18 – while DryShips’ dry bulk fleet operating vessel costs were ~40% more than its public peers in its last full year as a public company19
vs

Economou Experience

  • Acquired majority control of the company through a series of related-party transactions, increasing ownership from less than 0.01% in March 2017 to more than 80% in less than two years20
  • Extracted significant value from a series of lucrative management fees, allowing him to earn more than $350 million through Economou-controlled affiliates21
  • Initiated a spin-off of Tankships Investment Holdings with plans to pay fees to two other Economou-controlled entities,22 which was ultimately aborted in favor of selling vessels directly to Economou himself23
  • Received a $50 million termination fee (equal to 11% of market cap at the time of privatization) paid in connection with his take private of DryShips in 201924
Ocean Rig

Ocean Rig

While CEO of DryShips, Economou orchestrated the acquisition of a controlling interest in Ocean Rig, a deep-sea oil drilling company. Following the investment, Economou was appointed Chairman and CEO of Ocean Rig.25

ocean rig Public Investors’ Experiences

  • Negative total shareholder returns of -98%, including as a result of a series of highly dilutive equity offerings;26 destroying billions of dollars of shareholder value
  • Multiple lucrative fee arrangements for Economou affiliates enriched Economou at Ocean Rig shareholders’ expense27
vs

Economou Experience

  • $83.5 million in fees paid to an Economou affiliate in just a two-year period in a lucrative management fee arrangement28
  • A $120 million emergency loan to DryShips, which Economou repaid by satisfying the loan with Ocean Rig shares instead of a cash payment29
  • Retained 9.3% of the reorganized company in bankruptcy30 and secured a lucrative post-bankruptcy agreement for Ocean Rig to pay $15.5 million in annual fees and 1% of all future drilling contracts to an Economou-controlled entity31
  • Termination fee of $130 million paid to an Economou-controlled entity in connection with TransOcean’s acquisition of Ocean Rig32

We urge you to reject Economou and his nominees

The Seanergy Nominating Committee and Board reviewed Economou’s nominees and unanimously determined they lack the requisite qualifications to serve as directors on the Seanergy Board and  have troubling track records of supporting Economou’s self-interested value destruction as directors at multiple companies he led or controlled

PROTECT YOUR INVESTMENT

Every vote matters.

We urge you to vote "FOR" Seanergy’s highly qualified director nominees –
‍Dimitrios Anagnostopoulos and Ioannis Kartsonas – and "AGAINST" Economou’s proposals on the WHITE proxy card TODAY.

Please follow the instructions on your proxy card or voting instruction form and vote by 11:59 PM ET on November 3, 2024.

How to vote