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Friday, 06 July 18
HOW FLEET SIZE, CORPORATE PROFILE AND STRATEGY ARE DECIDING FACTORS IN SELECTING AN APPROPRIATE FINANCING STRATEGY - PWC
 KNOWLEDGE TO ELEVATE
The challenges that shipping companies are facing when selecting an appropriate financing strategy during the current period of volatile global markets, renewed fears of protectionism and trade wars and the possibility of new technologies disrupting traditional industries, such as shipping, were some of the issues discussed with shipowners and shipping finance experts during the Shipping Industry Briefing organised recently by PwC at the Yacht Club of Greece, entitled ‘Navigating through new challenges in the global markets’.
While interest in accessing the US capital markets remains high for a number of private shipping companies, the ability to do so is becoming increasingly difficult for companies with smaller sized fleets. “During 2018, the US capital markets started out strong and have maintained momentum despite the volatility in the market. IPO themes continue to be strong – top line growth, differentiation, dependable cash flow and predictable revenue. More specifically, shipping companies that are interested in accessing the US markets will need to focus on segment, volume and differentiation”, says Santos Equitz, Director responsible for Capital Markets at PwC Greece.
To be on US capital markets radar requires the combination of a large market capitalisation and a strong prospect of recovery in the shipping markets, which may be a difficult combination to meet for private shipping companies. The limited access to the US markets and the decline in traditional bank lending, has led to alternative sources of finance to emerge to fill the gap. Leasing finance and Nordic Bonds have proven to be viable alternatives to fill the debt gap left from the traditional shipping banks reducing their exposure to the sector. Additionally, when it comes to raising equity, the Norwegian market has been effective, utilising the unregulated over-the-counter market (N-OTC) and Merkur Market for smaller companies or the regulated stock exchanges Oslo Axess and Oslo Stock Exchange for larger companies.
Socrates Leptos-Bourgi, Global Shipping & Ports Leader at PwC, opened the floor to a panel of experts to discuss these alternative sources of finance, mentioning that to go public in the US capital markets is a significant transformation for any company and more so for smaller, family owned companies. As discussed on the panel, some alternatives are available in the Norwegian markets, which have recently provided companies with the ability to raise finance through either equity issuance or high yield bonds. Andreas Aamodt Kilde, Partner at Pareto Securities, explained: “With the traditional shipping banks continuing to reduce their exposure to the global shipping industry, shipowners have to explore other alternatives to finance their vessels. Fortunately, the options are many and the opportunity in today’s market lies in taking advantage of the attractive non-bank financing solutions available. With every fleet, employment profile and capital structure being unique, my best advice to shipowners is to explore the alternatives out there in a structured and competitive process – financing is available, but one needs to know where to look”.
Although some interest had been shown by private equity funds in the past, this is not a trend that seems to continue and investors are looking for ways to exit. Nevertheless, this activity has positively influenced the interest in M&As, said Anthony Argyropoulos, Managing Director at Seaborne Capital. Although the scope for further M&As does not seem to be prevalent due to the lack of synergies in shipping, Argyropoulos believes we should expect a few more, possibly with public-private partnerships as the driving force behind them.
Chinese lease finance is also growing. With 12 out of 25 largest and active financing institutions coming from China, there’s a large appetite for investment, however the size and reputation of shipping companies are still major contributors to the final decision, explained Nick Daskalakis on the panel, Director at Smarine Advisors Limited. “Leasing finance has matured, providing flexibility on ship age, type, origin of built, employment, tenor, pre-delivery, day to day operational requirements, competitive terms and fast execution and drawdown timeframes. It is ideal for capital intensive projects, boosts liquidity and strategically diversifies lending risk for shipping groups, offering synergy opportunities with Chinese yards and charterers. Large holding structure groups with excellent reputation, transparency and strong cashflow are the prime candidates albeit competition is cascading interest towards mid-size groups nowadays”, he continues.
The role of China in global trade and the shipping industry was further analysed by Mr Feng Li, Commercial Counsellor of the Chinese Embassy in Greece. The Commercial Counsellor explained how China’s economic growth and shipping are linked and the wellbeing of the shipping sector is dependent on ensuring an open market and competitive free trade. He also added that the Cosco developments at Piraeus port are a commitment to develop the largest container port in Europe for the establishment of new channels to global trade. China and Greece have complementary strengths when it comes to shipbuilding, and the relationship between the two has been growing stronger over the past decade.
When it comes to the overall prospects of the main shipping markets, Henriette Brent-Petersen, Managing Director of Shipping and Offshore Research at DVB Bank SE, commented that “Despite the continuing ‘deleveraging’ process both in the Chinese and Korean shipbuilding industry, we do not expect the significant idle yard capacity to completely disappear in the short term”. “The data show a decrease in the nominal yard capacity, but do they reflect the truth? We are living in a world with new disruptive technologies that change the way we used to do business, and the same applies for the traditional shipbuilding industry. By leveraging on innovative automation technologies such as the use of robots, sensor systems and artificial intelligence, shipbuilders will be able to achieve a higher productivity and low-cost construction, high-quality products and on-time delivery. As a consequence, the conventional ship construction process could be transformed into what we call a ‘smart yard system”, she explains. The overall impact on shipping will likely be shorter cycles and hire rates to be volatile within a much narrower range.
Digitisation in the shipping sector is one of the most disruptive developments since the industrial revolution, and should not be ignored by any stakeholder – not just ship owners, but also ports and logistics service providers- which will ultimately lead to optimized operations in the whole maritime logistics chain. Referring to digital strategies in the industry, Burkhard D. Sommer, Deputy Head of the Maritime Competence Centre of PwC Germany, comments: “Digitisation is unavoidable; it will cause disruptive changes to the current business models. Digital strategies and implementation of technologies and processes shall be based on a holistic approach to improve the current way of working as well as ensure the success of any company in the future. Digitisation is importantly about using data from various sources to optimise operations. “It is not an option – in a quick changing world it is a necessity to be successful in the future but most of the players in the maritime industry still have a long way to go. It is time to move”, he said.
Shipping has been increasingly operating in a challenging economic environment, posing challenges as well as opportunities to operate and innovate for sustainable business operations. Although tradition has been a driving force in the industry’s success in the past, this is the time for ship owners to move away from traditional operating models and start thinking of alternative ways to grow their businesses.
Source: PwC
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Thursday, 21 June 18
CHINESE REDUCED COAL IMPORT RESTRICTIONS - CAIXIN GLOBAL
Caixin Global reported that the Chinese government has reduced restrictions on coal imports at the nation’s major ports in response to concer ...
Thursday, 21 June 18
INDIAN GOVERNMENT ADMITS COAL SHORTAGE, ASKS DISCOMS TO IMPORT - TIMES OF INDIA
Times of India reported that the power ministry has advised all state governments and private power distribution companies to import coal as Coal I ...
Tuesday, 19 June 18
WCA RESPONDS TO BP STATISTICAL REVIEW OF WORLD ENERGY 2018
Responding to BP’s Statistical Review of World Energy 2018, Benjamin Sporton, Chief Executive of the World Coal Association (WCA) said, &ldqu ...
Wednesday, 13 June 18
U.S. COAL PRODUCTION TO DECLINE BY 2% TO 756 MILLION SHORT TONS MMST IN 2018 - EIA
EIA forecasts U.S. coal production to decline by 2% to 756 million short tons (MMst) in 2018.
According to EIA's Short-Term Ener ...
Wednesday, 13 June 18
SHIPPING MARKET INSIGHT - SOPHIE COTZIAS
2018 marks quite a few milestones for Greek Shipping. No need to detail again the greatness of Greek Shipping or the singular position that Greek s ...
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Showing 1696 to 1700 news of total 6871 |
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- Aditya Birla Group - India
- Siam City Cement PLC, Thailand
- Coal and Oil Company - UAE
- Chamber of Mines of South Africa
- Sojitz Corporation - Japan
- Electricity Generating Authority of Thailand
- Merrill Lynch Commodities Europe
- Indika Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Ministry of Mines - Canada
- Semirara Mining Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Sree Jayajothi Cements Limited - India
- Indonesian Coal Mining Association
- CNBM International Corporation - China
- Xindia Steels Limited - India
- Ministry of Finance - Indonesia
- London Commodity Brokers - England
- South Luzon Thermal Energy Corporation
- Petron Corporation, Philippines
- Edison Trading Spa - Italy
- Tamil Nadu electricity Board
- Bayan Resources Tbk. - Indonesia
- Karaikal Port Pvt Ltd - India
- VISA Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Standard Chartered Bank - UAE
- Videocon Industries ltd - India
- Barasentosa Lestari - Indonesia
- Savvy Resources Ltd - HongKong
- Deloitte Consulting - India
- Vizag Seaport Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- White Energy Company Limited
- Samtan Co., Ltd - South Korea
- Billiton Holdings Pty Ltd - Australia
- Gujarat Electricity Regulatory Commission - India
- Maharashtra Electricity Regulatory Commission - India
- Central Java Power - Indonesia
- Interocean Group of Companies - India
- Jindal Steel & Power Ltd - India
- Toyota Tsusho Corporation, Japan
- Oldendorff Carriers - Singapore
- GVK Power & Infra Limited - India
- Wood Mackenzie - Singapore
- Orica Mining Services - Indonesia
- Renaissance Capital - South Africa
- PTC India Limited - India
- Sindya Power Generating Company Private Ltd
- Cement Manufacturers Association - India
- Kalimantan Lumbung Energi - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Kartika Selabumi Mining - Indonesia
- Malabar Cements Ltd - India
- Jaiprakash Power Ventures ltd
- IHS Mccloskey Coal Group - USA
- Electricity Authority, New Zealand
- Eastern Coal Council - USA
- Chettinad Cement Corporation Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Port Waratah Coal Services - Australia
- Essar Steel Hazira Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Wilmar Investment Holdings
- Australian Commodity Traders Exchange
- Grasim Industreis Ltd - India
- Therma Luzon, Inc, Philippines
- SMC Global Power, Philippines
- Directorate Of Revenue Intelligence - India
- Parry Sugars Refinery, India
- Petrochimia International Co. Ltd.- Taiwan
- Uttam Galva Steels Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Goldman Sachs - Singapore
- International Coal Ventures Pvt Ltd - India
- Madhucon Powers Ltd - India
- Miang Besar Coal Terminal - Indonesia
- The University of Queensland
- Meenaskhi Energy Private Limited - India
- Thiess Contractors Indonesia
- Global Business Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Bharathi Cement Corporation - India
- Medco Energi Mining Internasional
- Simpson Spence & Young - Indonesia
- Latin American Coal - Colombia
- The State Trading Corporation of India Ltd
- Kobexindo Tractors - Indoneisa
- Thai Mozambique Logistica
- Bukit Makmur.PT - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Indo Tambangraya Megah - Indonesia
- Indogreen Group - Indonesia
- Ind-Barath Power Infra Limited - India
- Metalloyd Limited - United Kingdom
- Coalindo Energy - Indonesia
- San Jose City I Power Corp, Philippines
- India Bulls Power Limited - India
- Baramulti Group, Indonesia
- Sical Logistics Limited - India
- McConnell Dowell - Australia
- Meralco Power Generation, Philippines
- Bangladesh Power Developement Board
- GAC Shipping (India) Pvt Ltd
- PNOC Exploration Corporation - Philippines
- Minerals Council of Australia
- Rashtriya Ispat Nigam Limited - India
- Planning Commission, India
- Tata Chemicals Ltd - India
- Maheswari Brothers Coal Limited - India
- MS Steel International - UAE
- Larsen & Toubro Limited - India
- Antam Resourcindo - Indonesia
- Ambuja Cements Ltd - India
- SN Aboitiz Power Inc, Philippines
- Altura Mining Limited, Indonesia
- Sakthi Sugars Limited - India
- Salva Resources Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Sarangani Energy Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- CIMB Investment Bank - Malaysia
- TeaM Sual Corporation - Philippines
- Mercuria Energy - Indonesia
- Star Paper Mills Limited - India
- Leighton Contractors Pty Ltd - Australia
- Bulk Trading Sa - Switzerland
- Bhushan Steel Limited - India
- Central Electricity Authority - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Energy Development Corp, Philippines
- ASAPP Information Group - India
- Neyveli Lignite Corporation Ltd, - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Rio Tinto Coal - Australia
- Kumho Petrochemical, South Korea
- Bhatia International Limited - India
- Manunggal Multi Energi - Indonesia
- LBH Netherlands Bv - Netherlands
- Indian Energy Exchange, India
- Kaltim Prima Coal - Indonesia
- Borneo Indobara - Indonesia
- Dalmia Cement Bharat India
- Anglo American - United Kingdom
- SMG Consultants - Indonesia
- Ministry of Transport, Egypt
- Energy Link Ltd, New Zealand
- Binh Thuan Hamico - Vietnam
- Australian Coal Association
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Lanco Infratech Ltd - India
- Agrawal Coal Company - India
- Riau Bara Harum - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Singapore Mercantile Exchange
- Directorate General of MIneral and Coal - Indonesia
- Orica Australia Pty. Ltd.
- Timah Investasi Mineral - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Power Finance Corporation Ltd., India
- GN Power Mariveles Coal Plant, Philippines
- Economic Council, Georgia
- Iligan Light & Power Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Attock Cement Pakistan Limited
- ICICI Bank Limited - India
- Georgia Ports Authority, United States
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Independent Power Producers Association of India
- Gujarat Sidhee Cement - India
- Aboitiz Power Corporation - Philippines
- Romanian Commodities Exchange
- Asmin Koalindo Tuhup - Indonesia
- New Zealand Coal & Carbon
- Indian Oil Corporation Limited
- Marubeni Corporation - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vedanta Resources Plc - India
- Banpu Public Company Limited - Thailand
- Intertek Mineral Services - Indonesia
- Coastal Gujarat Power Limited - India
- Formosa Plastics Group - Taiwan
- Carbofer General Trading SA - India
- AsiaOL BioFuels Corp., Philippines
- Pendopo Energi Batubara - Indonesia
- Krishnapatnam Port Company Ltd. - India
- OPG Power Generation Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Bhoruka Overseas - Indonesia
- Commonwealth Bank - Australia
- Kideco Jaya Agung - Indonesia
- Posco Energy - South Korea
- Mjunction Services Limited - India
- IEA Clean Coal Centre - UK
- The Treasury - Australian Government
- Africa Commodities Group - South Africa
- GMR Energy Limited - India
- Kepco SPC Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Parliament of New Zealand
- Mintek Dendrill Indonesia
- Mercator Lines Limited - India
- Makarim & Taira - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- European Bulk Services B.V. - Netherlands
- Trasteel International SA, Italy
- PowerSource Philippines DevCo
- Siam City Cement - Thailand
- Heidelberg Cement - Germany
- Eastern Energy - Thailand
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