Negotiations with Niarchos

In the Greek port of Piraeus, three U.S. shipping experts this week will begin looking over a private fleet that has five times as much tonnage as the French navy. One by one, 63 black-bottomed tankers and freighters will be diverted from their runs over all the oceans and seas and pulled into dry-dock for the visitors to inspect. The inspectors have quite an assignment: to help bring off the largest ship purchase in history, a deal of $200 million or more. Up for sale was almost the entire armada of that hero of the modern Greek shipping legend, Stavros Spyros Niarchos (TIME cover, Aug. 6, 1956).

Disenchanted Argonaut. The would-be buyers, negotiating back in Manhattan, are big men themselves. They are mostly onetime U.S. Defense Department officials who in 1958 bought out the New York-based Marine Transport Lines, which is bidding for the Niarchos fleet and is anxious to keep it out of foreign hands. Through a complicated maze of companies, they operate 61 ships under American and Liberian flags. Leading the group is H. (for Harris) Lee White, 52, former Air Force Assistant Secretary, now a partner in the Wall Street law firm of Cadwalader, Wickersham & Taft. Other principals are ex-Deputy Defense Secretary Roger Kyes (now a General Motors vice president); the estate of ex-Defense Secretary Charles Wilson; and two ChineseAmerican businessmen, C. Y. Chen and C. T. Shen, who made a fortune in export-import and shipping.

The sale, which has been long in coming (TIME, Oct. 9), is the result of Niarchos' growing disenchantment with his argonaut's role. The world has become all too stable for him: there has been no Korean or Suez crisis lately to drive up oil prices and tanker rates. Niarchos did make a bundle by hauling oil for the Russians, notably during the Cuban missile crisis. But some U.S. oil giants are mad at him for carrying cut-price Russian oil that undersold their own; they are at least informally boycotting Niarchos' vessels and building more and more of their own tankers. The Communists, instead of repaying Niarchos for past favors, are steadily gaining influence in some Greek seamen's associations, where they are making life rough for the shipowners.

Optimistic Competitors. But Marine Transport figures that it can make money in the world's biggest floating crap game. Being an American firm, it will escape the anti-Niarchos sentiment, but can collect the low-tax, low-wage benefits that Niarchos already enjoys by keeping most of his ships under the Liberian flag. The company's executives are also impressed that Niarchos' Greek competitors are more optimistic about the future of shipping than he is, now have $500 million worth of ships on order. Niarchos himself is building one new supertanker in France (not included in this deal), and he intends to devote more attention to his investments in aluminum, oil refining and the Piraeus shipyard.

The bidders are trying to pull down the price by pointing out that part of Niarchos' fleet is under long-term charter contracts that pay off in British sterling--and that devaluation would thus cost them dearly. But the deal hinges primarily on the inspection of the fleet. If the vessels are shipshape, a deal that would make the Lee White group the world's biggest independent shipping operator should be closed in 60 to 90 days.

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