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Fairhurst out to ensure Denholm’s aim is true (Lloyd's List ) 17/01/2003

RECEIVED wisdom suggests that familiarity breeds contempt. But for the Denholm Group and Fairwind Shipping a long-lasting and close relationship has fostered mutual respect.

So much so that Denholm last year acquired Fairwind, the company best known for its provision of ship recovery services to banks.

Fairwind was founded in 1983 by the larger-than-life Trevor Fairhurst, whose association with Denholm stretches back more than 30 years to the days when he was a mere stripling employed by P&O.

In the late 1960s, with responsibility for Associated Bulk Carriers, P&O’s joint venture with Naess Shipping, Mr Fairhurst became a familiar face at Denholm, one of the pioneers of third party ship management.

Then, in the 1970s, he worked with Sir Ian Denholm, a director of P&O, who was in due course to become deputy chairman.

The commercial connection was strengthened in 1979 when Mr Fairhurst decamped to Frank Narby’s Eurocanadian-Cast and used Denholm to run its ships. When Eurocanadian collapsed four years later he formed Fairwind with the initial aim of helping to salvage something from the failure. And, of course, Denholm was there to lend a hand.

Now Mr Fairhurst and his Fairwind colleague Jean Richards are assisting chairman John Denholm to shape the future of Denholm Shipping, of which they have become directors.

Fairwind has provided a timely injection of fresh talent and experience into Denholm Shipping. The acquisition coincided with Tim Brown’s retirement as chairman of Denholm Coates after nearly 50 years with the group.

“I think Denholm is a great name and I want to take that on,” says Mr Fairhurst.

And, with a typical flourish, he declares: “The attraction of the Denholm family is that they’re dead bloody honest. In the trade I’m in, working with banks, that is essential.”

Denholm Shipping, one of the group’s four divisions, is the vehicle for all its owning, consultancy, management and broking activities. The acquisition of Fairwind has prompted the consolidation of Denholm Shipping’s activities under one roof.

Having previously been scattered around London, the operations of Denholm Coates, Harper Petersen and Fairwind are now lodged in Fairwind’s Gun House offices in the City. This “three into one” exercise is designed to yield savings on rent and economies of scale while encouraging greater interplay between the teams.

Dubbed “the headmaster of Gun House”, Mr Fairhurst says: “As a result of pulling the teams together Denholm Shipping now has a fully fledged, multi-faceted broking team to add to the traditional reconstructional and recovery activities that have been the basis of Fairwind’s business in the past”.

To Fairwind’s own expertise in big bulk, Denholm Coates brings tankers and their own bulk and project activities, while Harper Petersen adds a container team.

The individual companies will continue to trade under their own names for the foreseeable future, Mr Fairhurst explains, while being a recognisable member of the Denholm Shipping fold.

The group’s 30% interest in the technical shipmanagement company Anglo-Eastern is housed within Denholm Shipping, providing access to the latest expertise in that sector.

But Mr Fairhurst stresses that the individual companies, particularly Fairwind in its recovery work, are “totally free” to work with whom they choose.

“For Denholm Shipping it is a great advantage to have one of the leading shipmanagers onside, enabling us to keep in touch with costs and quality, though we are in no sense required to use them,” he adds. “It is important for the recovery side that we have a ‘free gun arm’.”

Mr Fairhurst is at pains to point out that Denholm Shipping has no intention of acting as a competitive broker.
“I am not competing with Mr Marsh at Braemar Seascope and Mr Fulford-Smith at Clarksons,” he says.
Rather, the combination of Denholm Shipping’s activities enables the provision of a “fuller service to their traditional principal client group, whether they be banks, owners or charterers”.

Another strength, Mr Fairhurst believes, is access to equity from the Denholm family.

“On both the investment and disinvestment fronts the activities have been strengthened by the availability of finance from within the Denholm Group to participate with our clients in their activities,” he says.    “The ability to help a start-up or a bank by being able to put in some funds to assist the venture is greatly advantageous.”

Denholm Shipping’s shipowning activities are divided into two streams.
First there is the “steady, managed risk approach” which provides a service to users of ships, such as large liner companies which do not need to own the asset.

Denholm provides the vessel, usually owned by the group and managed by Anglo Eastern, which is time chartered out for a certain period.
This is regarded as offering tailor-made ownership solutions to end users rather than traditional shipowning. But the group does have a more conventional shipowning side, a second stream that involves taking positions in ships on its own account.
Usually this involves acquiring interests in vessels rather than full ownership.

“I see a growth in Denholm’s owned tonnage,” Mr Fairhurst says. “And there is an element of cross-fertilisation here.”

When Fairwind was established 20 years ago Mr Fairhurst had spotted the potential for a new niche market. But the company bred much competition.
“Fairwind was unusual and plagiarism is a form of compliment,” Mr Fairhurst observes. “Helping distressed banks became quite popular and some mixed it with ship management. With our new spread of activities and access to seed money, we are once again ahead of the game.”

Fairwind is famed for its audacious repossession of Panagis Zissimatos’ Adriatic Tankers fleet after the most controversial collapse in the industry’s history.

The company had to inspect 49 ships in 30 days and in 26 separate jurisdictions.

To some the alliance of Fairwind’s ‘gunslinger’ approach with a long-established and relatively low profile family shipping group may seem incongruous. But there is cold business logic as well mutual respect at work here.
“On the way up, the Denholm Coates side put in value added services,” Mr Fairhurst explains. “And on the way down, the reconstruction and recovery services come into play.”