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Thursday, 27 February 14
SHIPPING LOANS WORTH $5 BILLION HAVE CHANGED HANDS OVER THE PAST YEAR, AS FUNDS INVEST IN SHIPPING - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Funds investing in shipping has been the "talk of the town" over the past couple of years, as institutional investors, private equity and hedge funds have all emerged as newcomers to the shipping financing segment, often assuming the role of traditional shipping banks, which have exited the market, or cut their exposure. According to the latest weekly report from shipbroker Intermodal, the vast majority of those funds have been consumed in buying up shipping loans. "About $5 billion in shipping loans have changed hands in the past year and demand is driving loan prices to levels almost in line with book values", said the shipbroker.
According to an analysis by Intermodal's SnP broker George Dermatis, these funds "do not hesitate taking over entire fleets and even align themselves with several managers in an insatiable escapade to take over debts and even ships/assets on their balance sheets. Funds tolerate systemic risk much more than traditional banks that are massively exiting or reducing their exposure in the sector. So one could argue that one player is filling up the void the other creates. Therein lays the paradox" he noted.
Dermatis said that "the characteristics of traditional banks are undoubtedly much more to the liking of traditional shipowners; no exit strategy other than full debt repayment, name lending based on interpersonal relationships, which in some cases dates back decades, experience over several shipping cycles and the list goes on. The industry perceives this as an overall alignment of interests. Private Equity funds stand more or less at the other side of the road on all of these points and that creates nervousness to most being afraid of how fast these investors can climb the learning curve or lose their interest in the process".
According to the broker, "the truth is that shipping largely remains in the hands of its professionals, who live and breathe the essence of this sector and who -to a large extent- have assigned a negative connotation to the publicity that funds along with capital markets and OTC offerings gather. So, despite the fact that financing from these sources has in many times arrived when no other source of funding was available, the truth is that our industry still views them with skepticism. My personal feeling is that people spend too much time “loving or hating” a way of financing whose significance has been grossly overestimated - at least for the time being", Dermatis mentioned.
He went on to add that "despite the fact that numbers -especially last year's- are indeed impressive, it seems that equity funds do not contribute more than $6-7bn on average per year, which seems like a drop in the ocean when compared to conventional debt financing by banks which continues to provide around $250bn annually according to Marine Money. During the peak times of 2008, these figures stood close to $500bn (!!!) and this should therefore be sufficient to hush down fears that private equity alone could lead to a bubble or that it could even distort market reality... The main worry linked to overcapacity remains and the finance gap on newbuilding orders persists if not broadens. The latest available data speaks of figures of over $125bn... Whilst the presence of “new” money is duly noted, we all need to realize that the industry must be able to carry its own weight. If that means changing our processes, transparency levels, corporate responsibility standards, etc. in order to bridge this gap and attract a greater share of their attention, then maybe this is a change we should embrace", Dermatis concluded.
Meanwhile, in the dry bulk market this past week, things continued to improve on the back of rates for the smaller size segments holding on to their levels and those for Capes correcting upwards, said Intermodal, while the spill-overs of the improved sentiment have yet to affect the Panamax market. Nevertheless, the BDI ended yesterday on yet another higher note, ending the session at 1,222 points.
Source: Nikos Roussanoglou, Hellenic Shipping News
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Wednesday, 22 January 14
HANDY/SMAX: TALK OF RATES INDICATES A STEADY TO FIRMING TREND - INTERMODAL
Last week closed off on the red once more for the Dry Bulk market, which continues to see freight rates trying to get steady feet. Nonetheless, with ...
Wednesday, 22 January 14
EXPORT BAN ON UNPROCESSED MINERALS EFFECTIVE 12 JANUARY 2014 - THREE - YEAR REPRIEVE FOR SOME, BUT UNCERTAINTY REMAINS: PWC
COALspot.com: On 11 January 2014, only hours before a long-debated ban on the export of unprocessed minerals was to come into effect, the Government ...
Wednesday, 22 January 14
DRY SECTOR: SENTIMENT REMAINS STRONG - INTERMODAL
As we have now entered 2014 and the Chinese are soon entering their Year of the Horse (sit tight for the ride!), it is a great opportunity to see ho ...
Wednesday, 22 January 14
SGX SUCCESSFULLY LAUNCHED FREIGHT FUTURES
COALspot.com: Singapore exchanged announced that, SGX Freight Futures were successfully launched on 20 January 2014, and the first trade ...
Tuesday, 21 January 14
PORT OF NEWCASTLE SHIPPED SLIGHTLY MORE COAL WEEK ON WEEK
COALspot.com: In the week ended 20 January 14, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled 2. ...
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- Lanco Infratech Ltd - India
- Makarim & Taira - Indonesia
- Central Electricity Authority - India
- European Bulk Services B.V. - Netherlands
- Eastern Energy - Thailand
- Thiess Contractors Indonesia
- Coal and Oil Company - UAE
- Madhucon Powers Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Planning Commission, India
- Deloitte Consulting - India
- Jorong Barutama Greston.PT - Indonesia
- Electricity Generating Authority of Thailand
- Medco Energi Mining Internasional
- Cement Manufacturers Association - India
- Jindal Steel & Power Ltd - India
- Dalmia Cement Bharat India
- Aditya Birla Group - India
- Posco Energy - South Korea
- Intertek Mineral Services - Indonesia
- Coastal Gujarat Power Limited - India
- Independent Power Producers Association of India
- Kohat Cement Company Ltd. - Pakistan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indian Oil Corporation Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Business Power Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Agrawal Coal Company - India
- Metalloyd Limited - United Kingdom
- Power Finance Corporation Ltd., India
- Maharashtra Electricity Regulatory Commission - India
- Eastern Coal Council - USA
- PTC India Limited - India
- Tata Chemicals Ltd - India
- PowerSource Philippines DevCo
- Maheswari Brothers Coal Limited - India
- Gujarat Sidhee Cement - India
- Tamil Nadu electricity Board
- Indogreen Group - Indonesia
- Wood Mackenzie - Singapore
- Riau Bara Harum - Indonesia
- Therma Luzon, Inc, Philippines
- Goldman Sachs - Singapore
- Mintek Dendrill Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Energy Link Ltd, New Zealand
- South Luzon Thermal Energy Corporation
- Australian Coal Association
- Attock Cement Pakistan Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Rashtriya Ispat Nigam Limited - India
- GN Power Mariveles Coal Plant, Philippines
- MS Steel International - UAE
- Cigading International Bulk Terminal - Indonesia
- Merrill Lynch Commodities Europe
- Chamber of Mines of South Africa
- International Coal Ventures Pvt Ltd - India
- Wilmar Investment Holdings
- Bulk Trading Sa - Switzerland
- Salva Resources Pvt Ltd - India
- Australian Commodity Traders Exchange
- Sojitz Corporation - Japan
- Gujarat Mineral Development Corp Ltd - India
- Electricity Authority, New Zealand
- Mjunction Services Limited - India
- Ambuja Cements Ltd - India
- Kumho Petrochemical, South Korea
- Simpson Spence & Young - Indonesia
- Marubeni Corporation - India
- Leighton Contractors Pty Ltd - Australia
- London Commodity Brokers - England
- Krishnapatnam Port Company Ltd. - India
- Baramulti Group, Indonesia
- Xindia Steels Limited - India
- Parry Sugars Refinery, India
- Sindya Power Generating Company Private Ltd
- Directorate General of MIneral and Coal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- New Zealand Coal & Carbon
- Mercator Lines Limited - India
- Siam City Cement PLC, Thailand
- Banpu Public Company Limited - Thailand
- Ceylon Electricity Board - Sri Lanka
- Grasim Industreis Ltd - India
- Ministry of Transport, Egypt
- IEA Clean Coal Centre - UK
- Kalimantan Lumbung Energi - Indonesia
- Global Coal Blending Company Limited - Australia
- LBH Netherlands Bv - Netherlands
- VISA Power Limited - India
- Indonesian Coal Mining Association
- Minerals Council of Australia
- GMR Energy Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Uttam Galva Steels Limited - India
- Star Paper Mills Limited - India
- Meenaskhi Energy Private Limited - India
- Port Waratah Coal Services - Australia
- SMC Global Power, Philippines
- Orica Mining Services - Indonesia
- Standard Chartered Bank - UAE
- Videocon Industries ltd - India
- Bhatia International Limited - India
- Essar Steel Hazira Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Mercuria Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Binh Thuan Hamico - Vietnam
- SN Aboitiz Power Inc, Philippines
- Renaissance Capital - South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Carbofer General Trading SA - India
- Price Waterhouse Coopers - Russia
- Africa Commodities Group - South Africa
- OPG Power Generation Pvt Ltd - India
- Heidelberg Cement - Germany
- Rio Tinto Coal - Australia
- Bayan Resources Tbk. - Indonesia
- PNOC Exploration Corporation - Philippines
- The State Trading Corporation of India Ltd
- Pendopo Energi Batubara - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Karaikal Port Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Ind-Barath Power Infra Limited - India
- Jaiprakash Power Ventures ltd
- GAC Shipping (India) Pvt Ltd
- McConnell Dowell - Australia
- Malabar Cements Ltd - India
- Romanian Commodities Exchange
- Siam City Cement - Thailand
- Anglo American - United Kingdom
- Orica Australia Pty. Ltd.
- Bharathi Cement Corporation - India
- Timah Investasi Mineral - Indoneisa
- Kobexindo Tractors - Indoneisa
- Sical Logistics Limited - India
- Thai Mozambique Logistica
- Meralco Power Generation, Philippines
- Sinarmas Energy and Mining - Indonesia
- SMG Consultants - Indonesia
- Sakthi Sugars Limited - India
- Edison Trading Spa - Italy
- Bahari Cakrawala Sebuku - Indonesia
- Oldendorff Carriers - Singapore
- Parliament of New Zealand
- Borneo Indobara - Indonesia
- ICICI Bank Limited - India
- CIMB Investment Bank - Malaysia
- Vizag Seaport Private Limited - India
- Latin American Coal - Colombia
- IHS Mccloskey Coal Group - USA
- Bukit Makmur.PT - Indonesia
- Kaltim Prima Coal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Finance - Indonesia
- Bangladesh Power Developement Board
- Globalindo Alam Lestari - Indonesia
- Sarangani Energy Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Straits Asia Resources Limited - Singapore
- The University of Queensland
- Georgia Ports Authority, United States
- India Bulls Power Limited - India
- CNBM International Corporation - China
- Commonwealth Bank - Australia
- Alfred C Toepfer International GmbH - Germany
- Gujarat Electricity Regulatory Commission - India
- Billiton Holdings Pty Ltd - Australia
- Economic Council, Georgia
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Mines - Canada
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Trasteel International SA, Italy
- Bukit Asam (Persero) Tbk - Indonesia
- Directorate Of Revenue Intelligence - India
- The Treasury - Australian Government
- Semirara Mining Corp, Philippines
- Energy Development Corp, Philippines
- Altura Mining Limited, Indonesia
- Interocean Group of Companies - India
- TNB Fuel Sdn Bhd - Malaysia
- Formosa Plastics Group - Taiwan
- Savvy Resources Ltd - HongKong
- Chettinad Cement Corporation Ltd - India
- Miang Besar Coal Terminal - Indonesia
- ASAPP Information Group - India
- Global Green Power PLC Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Petron Corporation, Philippines
- Indika Energy - Indonesia
- Larsen & Toubro Limited - India
- Indo Tambangraya Megah - Indonesia
- Singapore Mercantile Exchange
- PetroVietnam Power Coal Import and Supply Company
- Indian Energy Exchange, India
- Iligan Light & Power Inc, Philippines
- Coalindo Energy - Indonesia
- Samtan Co., Ltd - South Korea
- Barasentosa Lestari - Indonesia
- Manunggal Multi Energi - Indonesia
- Bukit Baiduri Energy - Indonesia
- White Energy Company Limited
- Bhushan Steel Limited - India
- Central Java Power - Indonesia
- Vedanta Resources Plc - India
- Neyveli Lignite Corporation Ltd, - India
- Kartika Selabumi Mining - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Antam Resourcindo - Indonesia
- Sree Jayajothi Cements Limited - India
- Kideco Jaya Agung - Indonesia
- GVK Power & Infra Limited - India
- San Jose City I Power Corp, Philippines
- Aboitiz Power Corporation - Philippines
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