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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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Monday, 04 November 19
COAL INDIA'S OCTOBER PRODUCTION MAY FALL 20% - PTI
Coal India’s production in October is likely to be 19-20 per cent lower at about 40 million tonne, as compared to 49.77 million tonne produce ...
Monday, 04 November 19
PANAMAX: WEAKER SENTIMENTS CONTINUED FROM LAST WEEK, WITH RATES FURTHER SOFTENING IN BOTH BASINS - BALTIC BRIEFING
Capesize
The Capesize market meandered slightly upwards this week before giving back much of its gains mid-week. Opening the week at $24,945, t ...
Thursday, 31 October 19
U.S. COAL-FIRED POWER PLANTS SCHEDULED TO SHUT - REUTERS
U.S. power companies expect to retire or convert from coal to gas over 13,800 megawatts (MW) of coal-fired plants in 2019 after shutting over 13,30 ...
Thursday, 31 October 19
SE ASIA MAY BECOME NET FOSSIL FUEL IMPORTER IN COMING YEARS - IEA
Southeast Asia is set to become a key driver of world energy trends over the next 20 years as its energy demand grows at twice the global average, ...
Monday, 28 October 19
ULTRAMAX: ASIA RATES REMAINED UNDER PRESSURE WITH THE NORTH LACKING FRESH ENQUIRY - BALTIC BRIEFING
Capesize
The end of the week brought about a small increase in sentiment heading into a long weekend for some regions. After sustaining a drop ...
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- Binh Thuan Hamico - Vietnam
- Petron Corporation, Philippines
- Indian Energy Exchange, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Tata Chemicals Ltd - India
- Energy Development Corp, Philippines
- PTC India Limited - India
- ASAPP Information Group - India
- India Bulls Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Standard Chartered Bank - UAE
- Anglo American - United Kingdom
- Kalimantan Lumbung Energi - Indonesia
- PNOC Exploration Corporation - Philippines
- Georgia Ports Authority, United States
- Sakthi Sugars Limited - India
- Coalindo Energy - Indonesia
- Indogreen Group - Indonesia
- Aditya Birla Group - India
- Ministry of Finance - Indonesia
- Kaltim Prima Coal - Indonesia
- Antam Resourcindo - Indonesia
- European Bulk Services B.V. - Netherlands
- Pipit Mutiara Jaya. PT, Indonesia
- Sojitz Corporation - Japan
- Bayan Resources Tbk. - Indonesia
- Coastal Gujarat Power Limited - India
- SN Aboitiz Power Inc, Philippines
- The University of Queensland
- Siam City Cement - Thailand
- Chettinad Cement Corporation Ltd - India
- Karaikal Port Pvt Ltd - India
- Central Electricity Authority - India
- Ind-Barath Power Infra Limited - India
- Mercator Lines Limited - India
- LBH Netherlands Bv - Netherlands
- Leighton Contractors Pty Ltd - Australia
- SMG Consultants - Indonesia
- Power Finance Corporation Ltd., India
- Orica Mining Services - Indonesia
- Rio Tinto Coal - Australia
- Dalmia Cement Bharat India
- Sindya Power Generating Company Private Ltd
- Semirara Mining Corp, Philippines
- OPG Power Generation Pvt Ltd - India
- Kumho Petrochemical, South Korea
- International Coal Ventures Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Singapore Mercantile Exchange
- Maharashtra Electricity Regulatory Commission - India
- Planning Commission, India
- Xindia Steels Limited - India
- Maheswari Brothers Coal Limited - India
- Ambuja Cements Ltd - India
- Indonesian Coal Mining Association
- Vijayanagar Sugar Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Orica Australia Pty. Ltd.
- Madhucon Powers Ltd - India
- Essar Steel Hazira Ltd - India
- Iligan Light & Power Inc, Philippines
- Electricity Generating Authority of Thailand
- Simpson Spence & Young - Indonesia
- Kepco SPC Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- Merrill Lynch Commodities Europe
- Kapuas Tunggal Persada - Indonesia
- Thiess Contractors Indonesia
- Intertek Mineral Services - Indonesia
- Australian Commodity Traders Exchange
- Global Coal Blending Company Limited - Australia
- PetroVietnam Power Coal Import and Supply Company
- Mintek Dendrill Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Global Green Power PLC Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Metalloyd Limited - United Kingdom
- Bahari Cakrawala Sebuku - Indonesia
- Posco Energy - South Korea
- Miang Besar Coal Terminal - Indonesia
- Altura Mining Limited, Indonesia
- Bhushan Steel Limited - India
- Central Java Power - Indonesia
- Mercuria Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Formosa Plastics Group - Taiwan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Edison Trading Spa - Italy
- The Treasury - Australian Government
- Jorong Barutama Greston.PT - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Gujarat Sidhee Cement - India
- Riau Bara Harum - Indonesia
- Attock Cement Pakistan Limited
- MS Steel International - UAE
- Sinarmas Energy and Mining - Indonesia
- Electricity Authority, New Zealand
- Coal and Oil Company - UAE
- Wood Mackenzie - Singapore
- London Commodity Brokers - England
- Borneo Indobara - Indonesia
- Bhoruka Overseas - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Indian Oil Corporation Limited
- Vedanta Resources Plc - India
- VISA Power Limited - India
- Manunggal Multi Energi - Indonesia
- Australian Coal Association
- New Zealand Coal & Carbon
- Directorate Of Revenue Intelligence - India
- Bangladesh Power Developement Board
- Pendopo Energi Batubara - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bukit Makmur.PT - Indonesia
- IEA Clean Coal Centre - UK
- Bharathi Cement Corporation - India
- Parliament of New Zealand
- Medco Energi Mining Internasional
- CIMB Investment Bank - Malaysia
- Therma Luzon, Inc, Philippines
- CNBM International Corporation - China
- Wilmar Investment Holdings
- Asmin Koalindo Tuhup - Indonesia
- Eastern Coal Council - USA
- Economic Council, Georgia
- Ministry of Transport, Egypt
- ICICI Bank Limited - India
- Heidelberg Cement - Germany
- Bhatia International Limited - India
- Price Waterhouse Coopers - Russia
- Global Business Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- McConnell Dowell - Australia
- Oldendorff Carriers - Singapore
- Eastern Energy - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- White Energy Company Limited
- TeaM Sual Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- Globalindo Alam Lestari - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Interocean Group of Companies - India
- Baramulti Group, Indonesia
- Minerals Council of Australia
- Parry Sugars Refinery, India
- Straits Asia Resources Limited - Singapore
- Commonwealth Bank - Australia
- Deloitte Consulting - India
- Kohat Cement Company Ltd. - Pakistan
- GMR Energy Limited - India
- Indo Tambangraya Megah - Indonesia
- Chamber of Mines of South Africa
- Independent Power Producers Association of India
- Meralco Power Generation, Philippines
- Meenaskhi Energy Private Limited - India
- Sree Jayajothi Cements Limited - India
- Ceylon Electricity Board - Sri Lanka
- Marubeni Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sical Logistics Limited - India
- Makarim & Taira - Indonesia
- Videocon Industries ltd - India
- Aboitiz Power Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- Jindal Steel & Power Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Thai Mozambique Logistica
- Billiton Holdings Pty Ltd - Australia
- Banpu Public Company Limited - Thailand
- PowerSource Philippines DevCo
- Siam City Cement PLC, Thailand
- Salva Resources Pvt Ltd - India
- Lanco Infratech Ltd - India
- Carbofer General Trading SA - India
- Tamil Nadu electricity Board
- Alfred C Toepfer International GmbH - Germany
- Uttam Galva Steels Limited - India
- SMC Global Power, Philippines
- Latin American Coal - Colombia
- Savvy Resources Ltd - HongKong
- Indika Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- The State Trading Corporation of India Ltd
- Africa Commodities Group - South Africa
- Mjunction Services Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Kideco Jaya Agung - Indonesia
- Romanian Commodities Exchange
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Mines - Canada
- Trasteel International SA, Italy
- Barasentosa Lestari - Indonesia
- Larsen & Toubro Limited - India
- IHS Mccloskey Coal Group - USA
- Renaissance Capital - South Africa
- GN Power Mariveles Coal Plant, Philippines
- Cement Manufacturers Association - India
- Jaiprakash Power Ventures ltd
- Grasim Industreis Ltd - India
- GVK Power & Infra Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Agrawal Coal Company - India
- Goldman Sachs - Singapore
- Semirara Mining and Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- Timah Investasi Mineral - Indoneisa
- Vizag Seaport Private Limited - India
- Malabar Cements Ltd - India
- Star Paper Mills Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bulk Trading Sa - Switzerland
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