Ex-Google CEO Eric Schmidt picked up this abandoned 267 ft Oceanco motor yacht Alfa Nero for $67.6 million. It was owned by a Russian fertilizer oligarch who was named in various sanctions and never tried to “flee” with the yacht to friendly countries as many other oligarchs did to evade having their yachts possessed.
At first a purchase price of $67.6 million seems like a steal – it would cost upwards of $150 million to $200 million to replicate the yacht, maybe more. But Alfa Nero was built in 2007, 15 years ago. That’s fairly old. It was built at Oceanco, which is a respected European builder but does not have quite as good a reputation as Feadship, Lurssen, Abeking & Rasmussen or perhaps Royal Huisman.
Yachts go down in value fairly steeply. A price slightly under 50% of build cost for a 15 year-old yacht is not a steal. Alfa Nero has been sitting with minimal maintenance for more than a year, and Schmidt faces a whopping bill to not only redecorate the yacht to his taste but a major bill to bring all systems up to date and refinish the exterior. However, he gets a huge yacht right now instead of having to wait four or five years to have one built, and he gets it cheap enough that he won’t lose money even after a $25 – $35 million million refit. Perhaps Schmidt likes the existing interior done by Albert Pinto. Most important, he will have a major yacht decorated to his taste in only a year or so, depending on the extent of a refit. That’s a good deal.