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Wednesday, 24 April 19
SHIPPING MARKET INSIGHT - IS THIS A BANKERS' MARKET? - INTERMODAL
 Over the last 10 years, many of the traditional and top lending banks have made the decision to either downsize their portfolios or even exit shipping. According to Petrofin, Top 40 shipping banks’ lending has fallen since 2008 by 25%, whilst at the same time the world fleet has grown by 28%. On top of this, out of the banks that have decided to stay in the game, not all of them have the strength, the budget and the competitive terms to do so. As a result, the availability of financing for small-medium size companies has become a scarce, hence a luxury good. In other words, even when there is available financing for these companies, its cost is really prohibitive.
Apart from the banks’ endogenous and structural issues, their shipping departments also need to decide where to allocate their budget. In an era of growing LNG demand, numerous large shipping firms invest in the very capital intensive LNG carriers. Most of the large banks are there to support their very good clients. However, this means that a big percentage of their budget (and resources in general) end up to the LNG carriers’ financing, i.e. not much budget left for the remaining sectors/shipping projects. So, when these banks are left with a limited budget to spend, they become very selective and of course their pricing goes up as the list of the waiting finance projects is significant.
But what about the alternative ways of financing for the small and medium size companies? Asian leasing has indeed filled part of the gap that was created with the traditional banks’ exit, however, again this is available for owners with larger fleets and bigger ticket sizes. Public markets have been quiet regarding shipping in general; bond markets again require significant size. Therefore, the small companies are left with the option of the so called alternative financing. Private equity and hedge funds do have the funds to invest, but this only happens when they get the return of capital that they require; given that this most of the times is a double digit figure, then the capital cost for the small/medium ship owners increases dramatically.
There are quite a few new European banks that have joined ship financing – whose pricing sits in between the one of the traditional banks and that of leasing – however, their current budget is nowhere near to filling the gap that was left after the departure of the big banks.
Therefore, small-medium size shipping companies struggle to find competitive finance terms. Someone may argue that this had always been the case, however, in today’s ship finance market it is evident that the financing of small-medium size shipping companies is not the banks’ first priority, which should not be the case given the performance of such companies during recent years. Indeed, many small-medium size companies have proved their top quality and professionalism by not only surviving the crisis but also by getting back into expansion mode. There are many ship-owning companies falling into this category. Indicatively, only in Greek shipping there are more than 150 companies that own 3-15 bulk carriers, of more than 28,000 dwt and younger than 17 years old. A big percentage of these companies are long standing and solid companies; however, face the above finance issues.
This is the clientele that will provide the bank with projects of good credit quality and at the right pricing and therefore should be the one attracting the attention of ship financiers if they wish to make their business efficient and dynamic again.
By George Laios
Deputy CEO, Intermodal Group
Compiled by:
Intermodal Research & Valuations
Analysts:
Ms Eva Tzima
George Panagopoulos
Disclaimer and legal disclosure: For any further queries please do not hesitate to contact our Research & Valuations Department. The information contained in this report has been obtained from various sources, as reported in the market. Intermodal Shipbrokers Co. believes such information to be factual and reliable without making guarantees regarding its accuracy or completeness. Whilst every care has been taken in the production of the above review, no liability can be accepted for any loss or damage incurred in any way whatsoever by any person who may seek to rely on the information and views contained in this material. This report is being produced for the internal use of the intended recipients only and no reproducing is allowed, without the prior written authorization of Intermodal Shipbrokers Co.
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Wednesday, 20 November 19
FOREIGN DIRECT INVESTMENTS IN COMMERCIAL COAL MINING IN INDIA? - DIPESH DIPU
In August 2019, Government of India announced its approval for Foreign Direct Investment (FDI) for coal mining, processing and sale. Not that FDI i ...
Wednesday, 20 November 19
AUSTRALIA'S NEW HOPE POSTS 66% SURGE IN Q1 SALEABLE COAL OUTPUT - REUTERS
Australian coal producer New Hope Corp Ltd reported on Tuesday a 66% jump in saleable coal production in the first quarter, as output ramped up at ...
Wednesday, 20 November 19
THE IMO AND THE PRICE OF GAS OR THE IMPACT OF THE INTERNATIONAL MARITIME ORGANISATION'S SULPHUR 2020 LIMIT FOR MARINE FUEL OIL ON THE PRICE OF GAS - KING & SPALDING
The main bunker fuel for ships is High Sulphur Fuel Oil (HSFO, with sulphur up to 3.5% m/m (mass by mass)). This will all change on 1 January 2020 ...
Wednesday, 20 November 19
SHIPPING MARKET INSIGHT - INTERMODAL
While the market expects the next OPEC meeting, there are still no clear signs indicating that the organization will keep supporting oil prices, wh ...
Monday, 18 November 19
CHINA RECORDS STABLE COAL PRODUCTION IN JAN-OCT: XINHUA
China’s raw coal output registered stable growth in the first 10 months, while its imports remained robust, official data showed.
...
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- Cement Manufacturers Association - India
- Sindya Power Generating Company Private Ltd
- Ind-Barath Power Infra Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Edison Trading Spa - Italy
- Sakthi Sugars Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PTC India Limited - India
- Metalloyd Limited - United Kingdom
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- CNBM International Corporation - China
- SMC Global Power, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Aditya Birla Group - India
- Larsen & Toubro Limited - India
- Electricity Authority, New Zealand
- Krishnapatnam Port Company Ltd. - India
- Romanian Commodities Exchange
- The State Trading Corporation of India Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Mines - Canada
- McConnell Dowell - Australia
- International Coal Ventures Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Dalmia Cement Bharat India
- Posco Energy - South Korea
- Sojitz Corporation - Japan
- Indian Energy Exchange, India
- Planning Commission, India
- Makarim & Taira - Indonesia
- Chettinad Cement Corporation Ltd - India
- SN Aboitiz Power Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Rio Tinto Coal - Australia
- Therma Luzon, Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Ministry of Finance - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Chamber of Mines of South Africa
- Videocon Industries ltd - India
- MS Steel International - UAE
- Xindia Steels Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Pendopo Energi Batubara - Indonesia
- Grasim Industreis Ltd - India
- Thiess Contractors Indonesia
- San Jose City I Power Corp, Philippines
- Port Waratah Coal Services - Australia
- Aboitiz Power Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coalindo Energy - Indonesia
- India Bulls Power Limited - India
- Eastern Coal Council - USA
- Trasteel International SA, Italy
- Bharathi Cement Corporation - India
- Directorate Of Revenue Intelligence - India
- ASAPP Information Group - India
- Siam City Cement PLC, Thailand
- Petrochimia International Co. Ltd.- Taiwan
- The University of Queensland
- Heidelberg Cement - Germany
- Global Coal Blending Company Limited - Australia
- Economic Council, Georgia
- GN Power Mariveles Coal Plant, Philippines
- Goldman Sachs - Singapore
- SMG Consultants - Indonesia
- Orica Australia Pty. Ltd.
- CIMB Investment Bank - Malaysia
- Iligan Light & Power Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- IEA Clean Coal Centre - UK
- Jaiprakash Power Ventures ltd
- Antam Resourcindo - Indonesia
- Kartika Selabumi Mining - Indonesia
- Toyota Tsusho Corporation, Japan
- TNB Fuel Sdn Bhd - Malaysia
- Neyveli Lignite Corporation Ltd, - India
- Electricity Generating Authority of Thailand
- TeaM Sual Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Medco Energi Mining Internasional
- Bangladesh Power Developement Board
- Mercator Lines Limited - India
- GMR Energy Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Global Green Power PLC Corporation, Philippines
- Mjunction Services Limited - India
- The Treasury - Australian Government
- Kobexindo Tractors - Indoneisa
- Meenaskhi Energy Private Limited - India
- Wood Mackenzie - Singapore
- Lanco Infratech Ltd - India
- Riau Bara Harum - Indonesia
- Binh Thuan Hamico - Vietnam
- Maharashtra Electricity Regulatory Commission - India
- Oldendorff Carriers - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Sree Jayajothi Cements Limited - India
- Borneo Indobara - Indonesia
- London Commodity Brokers - England
- AsiaOL BioFuels Corp., Philippines
- PowerSource Philippines DevCo
- Power Finance Corporation Ltd., India
- Madhucon Powers Ltd - India
- Altura Mining Limited, Indonesia
- Rashtriya Ispat Nigam Limited - India
- Jorong Barutama Greston.PT - Indonesia
- GVK Power & Infra Limited - India
- Ministry of Transport, Egypt
- Bhushan Steel Limited - India
- Indo Tambangraya Megah - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Parry Sugars Refinery, India
- Sical Logistics Limited - India
- Meralco Power Generation, Philippines
- Agrawal Coal Company - India
- Coastal Gujarat Power Limited - India
- Global Business Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Savvy Resources Ltd - HongKong
- Interocean Group of Companies - India
- Ceylon Electricity Board - Sri Lanka
- Asmin Koalindo Tuhup - Indonesia
- Uttam Galva Steels Limited - India
- Bukit Baiduri Energy - Indonesia
- Semirara Mining Corp, Philippines
- New Zealand Coal & Carbon
- Central Java Power - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Ambuja Cements Ltd - India
- Marubeni Corporation - India
- Intertek Mineral Services - Indonesia
- Kepco SPC Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Standard Chartered Bank - UAE
- Malabar Cements Ltd - India
- Barasentosa Lestari - Indonesia
- Anglo American - United Kingdom
- Tata Chemicals Ltd - India
- Orica Mining Services - Indonesia
- Sarangani Energy Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Energy Development Corp, Philippines
- Formosa Plastics Group - Taiwan
- Bayan Resources Tbk. - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Independent Power Producers Association of India
- Semirara Mining and Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Siam City Cement - Thailand
- Renaissance Capital - South Africa
- PNOC Exploration Corporation - Philippines
- ICICI Bank Limited - India
- Bukit Makmur.PT - Indonesia
- Parliament of New Zealand
- Bulk Trading Sa - Switzerland
- Petron Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Central Electricity Authority - India
- European Bulk Services B.V. - Netherlands
- Attock Cement Pakistan Limited
- Africa Commodities Group - South Africa
- Cigading International Bulk Terminal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Indogreen Group - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Timah Investasi Mineral - Indoneisa
- Georgia Ports Authority, United States
- Simpson Spence & Young - Indonesia
- Kaltim Prima Coal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Latin American Coal - Colombia
- Indian Oil Corporation Limited
- Salva Resources Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Mercuria Energy - Indonesia
- Tamil Nadu electricity Board
- Baramulti Group, Indonesia
- Mintek Dendrill Indonesia
- Essar Steel Hazira Ltd - India
- Banpu Public Company Limited - Thailand
- VISA Power Limited - India
- Singapore Mercantile Exchange
- Carbofer General Trading SA - India
- Star Paper Mills Limited - India
- Deloitte Consulting - India
- Commonwealth Bank - Australia
- White Energy Company Limited
- Vizag Seaport Private Limited - India
- Merrill Lynch Commodities Europe
- IHS Mccloskey Coal Group - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- Price Waterhouse Coopers - Russia
- Kumho Petrochemical, South Korea
- Australian Coal Association
- OPG Power Generation Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Thai Mozambique Logistica
- Australian Commodity Traders Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Eastern Energy - Thailand
- South Luzon Thermal Energy Corporation
- Wilmar Investment Holdings
- Indika Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Indonesian Coal Mining Association
- Bhatia International Limited - India
- Coal and Oil Company - UAE
- Minerals Council of Australia
- Vedanta Resources Plc - India
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