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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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Wednesday, 30 May 18
SHIPPING MARKET INSIGHT - ILIAS M. LALAOUNIS
Among several hot topics that will be discussed during the Posidonia week, the International Maritime Organization regulation that will be enforced ...
Tuesday, 29 May 18
BLOCKCHAIN CAN HAVE A TRANSFORMATIVE EFFECT ON THE SHIPPING INDUSTRY
KNOWLEDGE TO ELEVATE
Following the launch of a legal briefing on blockchain contracts from UK P&I Club, Claims Executive, Filip Koscieleck ...
Tuesday, 29 May 18
INDIA'S COAL IMPORT DECLINES IN APRIL AMID DIVERSION TO THERMAL POWER PLANTS - PTI
India’s coal import fell by 9 percent to 17.32 million tonnes (MT) in April on the back of ample supply of dry fuel from domestic sources.
...
Monday, 28 May 18
COAL SUPPLY DIVERSION IRKS INDUSTRIES DEPENDENT ON CAPTIVE POWER PLANTS - HINDU BUSINESS LINE
The government’s move to prioritise coal supplies to power plants with minimal coal stock has disrupted fuel supply to some sectors, which ha ...
Monday, 28 May 18
KOMIPO ISSUED ANOTHER TENDER FOR 130K MT OF 5700 NAR COAL
COALspot.com: South Korea state-owned utility Korea Midland Power (KOMIPO) issued a tender for 130,000 mt of min. 5700 NAR coal of Australian origi ...
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Showing 1711 to 1715 news of total 6871 |
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- GAC Shipping (India) Pvt Ltd
- Eastern Energy - Thailand
- Jindal Steel & Power Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Marubeni Corporation - India
- Kumho Petrochemical, South Korea
- Jaiprakash Power Ventures ltd
- Orica Mining Services - Indonesia
- Energy Development Corp, Philippines
- Minerals Council of Australia
- GVK Power & Infra Limited - India
- Kartika Selabumi Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sinarmas Energy and Mining - Indonesia
- Sojitz Corporation - Japan
- Holcim Trading Pte Ltd - Singapore
- Australian Commodity Traders Exchange
- Manunggal Multi Energi - Indonesia
- Videocon Industries ltd - India
- Petron Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Singapore Mercantile Exchange
- Intertek Mineral Services - Indonesia
- Medco Energi Mining Internasional
- Bharathi Cement Corporation - India
- Goldman Sachs - Singapore
- India Bulls Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Merrill Lynch Commodities Europe
- Central Electricity Authority - India
- Pendopo Energi Batubara - Indonesia
- Savvy Resources Ltd - HongKong
- PTC India Limited - India
- Aboitiz Power Corporation - Philippines
- Parry Sugars Refinery, India
- Port Waratah Coal Services - Australia
- Tamil Nadu electricity Board
- Bayan Resources Tbk. - Indonesia
- Sakthi Sugars Limited - India
- Altura Mining Limited, Indonesia
- Wilmar Investment Holdings
- Parliament of New Zealand
- Therma Luzon, Inc, Philippines
- Bhushan Steel Limited - India
- Gujarat Sidhee Cement - India
- Borneo Indobara - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Energy Link Ltd, New Zealand
- Grasim Industreis Ltd - India
- Kideco Jaya Agung - Indonesia
- Mintek Dendrill Indonesia
- Metalloyd Limited - United Kingdom
- Aditya Birla Group - India
- Coal and Oil Company - UAE
- SMC Global Power, Philippines
- Chamber of Mines of South Africa
- Leighton Contractors Pty Ltd - Australia
- Uttam Galva Steels Limited - India
- Directorate Of Revenue Intelligence - India
- IEA Clean Coal Centre - UK
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vijayanagar Sugar Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Thiess Contractors Indonesia
- Ceylon Electricity Board - Sri Lanka
- Power Finance Corporation Ltd., India
- Star Paper Mills Limited - India
- Indian Oil Corporation Limited
- Indogreen Group - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- SN Aboitiz Power Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Larsen & Toubro Limited - India
- Kepco SPC Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Anglo American - United Kingdom
- McConnell Dowell - Australia
- Mjunction Services Limited - India
- Globalindo Alam Lestari - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Thai Mozambique Logistica
- Indian Energy Exchange, India
- Bukit Baiduri Energy - Indonesia
- VISA Power Limited - India
- Coalindo Energy - Indonesia
- Deloitte Consulting - India
- Formosa Plastics Group - Taiwan
- ASAPP Information Group - India
- AsiaOL BioFuels Corp., Philippines
- Vedanta Resources Plc - India
- MS Steel International - UAE
- Mercuria Energy - Indonesia
- Planning Commission, India
- Ambuja Cements Ltd - India
- IHS Mccloskey Coal Group - USA
- Pipit Mutiara Jaya. PT, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Baramulti Group, Indonesia
- Central Java Power - Indonesia
- Krishnapatnam Port Company Ltd. - India
- GN Power Mariveles Coal Plant, Philippines
- Meralco Power Generation, Philippines
- LBH Netherlands Bv - Netherlands
- Electricity Authority, New Zealand
- Kohat Cement Company Ltd. - Pakistan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Simpson Spence & Young - Indonesia
- Semirara Mining and Power Corporation, Philippines
- The University of Queensland
- Miang Besar Coal Terminal - Indonesia
- Vizag Seaport Private Limited - India
- CNBM International Corporation - China
- Coastal Gujarat Power Limited - India
- Oldendorff Carriers - Singapore
- Electricity Generating Authority of Thailand
- Renaissance Capital - South Africa
- SMG Consultants - Indonesia
- Bukit Makmur.PT - Indonesia
- Barasentosa Lestari - Indonesia
- Sree Jayajothi Cements Limited - India
- Rashtriya Ispat Nigam Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Price Waterhouse Coopers - Russia
- Siam City Cement PLC, Thailand
- South Luzon Thermal Energy Corporation
- Directorate General of MIneral and Coal - Indonesia
- Orica Australia Pty. Ltd.
- Ministry of Finance - Indonesia
- White Energy Company Limited
- Madhucon Powers Ltd - India
- Attock Cement Pakistan Limited
- Gujarat Electricity Regulatory Commission - India
- Global Coal Blending Company Limited - Australia
- Sical Logistics Limited - India
- Australian Coal Association
- Ministry of Mines - Canada
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhatia International Limited - India
- Karaikal Port Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Maharashtra Electricity Regulatory Commission - India
- Trasteel International SA, Italy
- Kaltim Prima Coal - Indonesia
- CIMB Investment Bank - Malaysia
- Bahari Cakrawala Sebuku - Indonesia
- Bangladesh Power Developement Board
- Straits Asia Resources Limited - Singapore
- Dalmia Cement Bharat India
- PetroVietnam Power Coal Import and Supply Company
- Eastern Coal Council - USA
- Lanco Infratech Ltd - India
- Latin American Coal - Colombia
- Interocean Group of Companies - India
- Antam Resourcindo - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- PNOC Exploration Corporation - Philippines
- Global Business Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Alfred C Toepfer International GmbH - Germany
- Tata Chemicals Ltd - India
- Samtan Co., Ltd - South Korea
- Gujarat Mineral Development Corp Ltd - India
- Rio Tinto Coal - Australia
- OPG Power Generation Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- The State Trading Corporation of India Ltd
- Bulk Trading Sa - Switzerland
- Sindya Power Generating Company Private Ltd
- Chettinad Cement Corporation Ltd - India
- Bhoruka Overseas - Indonesia
- Agrawal Coal Company - India
- Siam City Cement - Thailand
- Commonwealth Bank - Australia
- San Jose City I Power Corp, Philippines
- Riau Bara Harum - Indonesia
- Indo Tambangraya Megah - Indonesia
- The Treasury - Australian Government
- Salva Resources Pvt Ltd - India
- PowerSource Philippines DevCo
- Wood Mackenzie - Singapore
- Meenaskhi Energy Private Limited - India
- Georgia Ports Authority, United States
- Iligan Light & Power Inc, Philippines
- Standard Chartered Bank - UAE
- Binh Thuan Hamico - Vietnam
- Posco Energy - South Korea
- Independent Power Producers Association of India
- Cement Manufacturers Association - India
- Indonesian Coal Mining Association
- TeaM Sual Corporation - Philippines
- Africa Commodities Group - South Africa
- Xindia Steels Limited - India
- Romanian Commodities Exchange
- Kobexindo Tractors - Indoneisa
- Malabar Cements Ltd - India
- ICICI Bank Limited - India
- London Commodity Brokers - England
- Semirara Mining Corp, Philippines
- New Zealand Coal & Carbon
- Mercator Lines Limited - India
- GMR Energy Limited - India
- Indika Energy - Indonesia
- Ministry of Transport, Egypt
- Edison Trading Spa - Italy
- International Coal Ventures Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Makarim & Taira - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Economic Council, Georgia
- Essar Steel Hazira Ltd - India
- Heidelberg Cement - Germany
- Carbofer General Trading SA - India
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