Trinity News

Hi,

I know nothing of the situation with the vessel offered for auction.

I do however know that there seems to be a never ending list of characters offering what can only be described as creative financing solutions for yachts.

A few of the other sites/groups I subscribe to seem to deliver a regular stream of these folks who can re invent the wheel, loan you huge money for next to nothing while knowing nothing about you.

The old saying "There is no such thing as a free lunch" applies today as much or more than ever before.

I also know that yards are a lot more wary of a beneficial owners financial sources and stability when negotiating a deal than they were just 5/6 yrs ago.

I was shocked to find out how frequently financing was taking place on yachts. Often they are run through their businesses in some way or other entities so that the beneficial owner not only doesn't put money out, the debt isn't theirs either. Much like a corporate airplane might be financed. There is a rather substantial group of people who have become conditioned to financing everything. They keep themselves highly leveraged. They create new entities just to acquire financing. They are often investing heavily into businesses or stocks while doing it with borrowed money. And because of "who they are" somehow they always seem to be able to get funds. If one source says "no" they just go down the line until someone says yes. Yet the ownership is spread among so many entities that they personally are never at risk.

The poor Bacarella has had money issues from day one. Trinity had to re take owner ship during the build because of non payments from the owner which caused Trinity to lose a lot of money on that project. The original owners where playing these creative games trying to say the vessel was improperly built while trying to get out of paying the final payments. I worked on the vessel as the engineer for Trinity then while this was going on and I felt that Trinity built a fine vessel and was really getting the short end of the stick. After Trinity won the court battles, the owners where then ordered to pay the final acceptance check and take delivery. I then worked for the new owners for a short time period and the money games continued as the owners would never pay the crew on time, or any of there other bills on time either. Even long after my employment ended, I was getting calls from bill collectors looking to get paid for there services.

There is no telling if they borrowed the money for the final acceptance payment, or took a loan out on the vessel to finace other business ventures, but to learn they lost the boat to the bank comes as no surprise to me what so ever.

I feel the Bacarrella deserves better in life. I hope some caring people buy her for a good price and she creates some happy yachters out there.

It seems like a lot of Trinty's past owners couldn't really afford their yachts? So many were for sale at one point. I never really understood why.

At one time there were people ordering Trinity yachts speculatively even. There was that brief period in which when finished they could be sold for more than the buyer was paying. There were deals made such as someone upgrading to a larger Trinity and Trinity agreeing to buy back their existing boat only to find it wasn't worth nearly as much as they agreed to by the time the new boat was completed. When a boat is taking three years or more to build, market conditions can change dramatically during that time. So prior to the collapse of the market in 2008-09, Trinity and their buyers were behaving as if the upward spiral was endless. There were those people even who owned two Trinity's and had another being built. As the economy hit them in their businesses the yachts became something they had to dispose of.

There was some unique financing and their were some unique deals between Trinity and their customers. The customers ran short of funds and Trinity was short of funds which delayed builds even further. Many customers have also walked away from boats under construction. There were at least a couple of orders "on hold" last November. I don't know about today. There was a time that a sizable payment upfront with more orders coming in all the time worked for everyone. If buyers were to walk and forfeit deposits, Trinity could complete the boat and could make even more money on it. But then as things changed, Trinity couldn't afford to foot the bill themselves to finish nor could they sell it for a profit, even including what they'd already been paid.

Both customers and Trinity were living and doing business as if the market would continue upward and value of boats would continue to increase by significant percentages. They customers were often buying too as if their businesses and investments weren't subject to anything but continued rises either. Ultimately a boat is then the first thing to go and that's in a period in which the market has collapsed.

On top of all that the charter market for $200,000 - $300,000 per week boats collapsed too. When you as an individual lose $20 million in the stock market in a short period, you're not as likely to go spend a million to charter a yacht. There are 13 Trinity yachts currently available on Charter World. I have no idea how many elsewhere. There are 22 Trinity yachts currently listed on Yacht World including two that are under construction at this time. So six years ago the new prices were continuing upward as were the used prices. Build and sell was a profitable path. Now, the used market has pulled the new market down with it.

I see, hopefully Trinity can bounce back.

They seem to be almost all commercial building at the moment. They have common ownership with a commercial entity. Last I read they did have one boat scheduled for completion but others on hold.

Still, more that I've heard from Burger in ages. Haven't heard anything at all on the pleasure side of things. Now perhaps the commercial is keeping them alive.

That can only happen because you as an individual were stupid enough to sell the stock at the low price. That $20M was not lost, it was given away.

Trinity has a lot of commercial projects keeping them busy while yacht build contracts are slowing down. Among many projects they have going on, they are building these 3 hundred something ft LNG powered offshore supply boats. This pic is from last Sept 2013 from the MS yard. You can gauge the size of this vessel by the man on the ladder preparing for the azimuth thrusters to be installed.

Well, many of those same people used margin to buy stock so that when their stocks declined they had margin calls. Regardless of stupidity or other causes, it left them short of funds.

Yes, that's basically their current business and they even have leased dockage in Gulfport to launch and complete. Now technically these are not being done by Trinity, but a related company.

Yeah, "margins" is a good term for gambling with money you probably don't have ...

I find it difficult to find much sympathy for those who lost their butts in such cases.

Word on the bayou is that they seriously underbid those boats. Something to do with having no experience with LNG and costs involved to build for that fuel.

It may be another interesting chapter in the Trinity saga.

But those persons much like Trinity and some other builders geared their lives, their businesses, and their finances on the basis things would continue upward forever. I have sympathy for them all. But I think they all must also take responsibility for the fact that their decisions contributed to their situation. We were in a "I'll just borrow more as I'll be making more and able to pay it off" economy. I am way too conservative to have ever had the tremendous gains some did when things were at their peak. Too conservative to have then suffered the huge losses they suffered.

Trinity and it's customers were in a fantasy world that said the value of these boats will keep going higher and higher and the demand will keep increasing as well.

I would suspect that there is a great risk they did so. When you have facilities and no orders, nothing to build, there is a huge possibility of underbidding. They probably underbid some yachts as well, even in their area of knowledge. Maybe they'll surprise us all, but history isn't on their side.

It appears that your sources have been wrong. She as sold at auction for "in excess of $30 million" which I would imagine is below her build cost. Apparently people wanted to raise their bid but were too late.

And do you have a link to a source for that? Not questioning it but just you've corrected another and I've googled and not found anything one way or the other.

Guess you forget to read Boat International's website.


P.S.- Not supposed to post their website here, but just for you, a tease:

2014/04/04/trinity-60m-superyacht-bacarella-sold-at-auction