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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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Friday, 18 October 19
SINGAPORE'S APEX TO LAUNCH LOW-SULFUR FUEL OIL CONTRACT AHEAD OF NEW SHIPPING RULES - REUTERS
Singapore-based Asia Pacific Exchange (APEX) will launch a low-sulfur fuel oil (LSFO) futures contract on Friday aimed at helping shipping and ener ...
Thursday, 17 October 19
INDIA READIES POLICY TO ATTRACT FOREIGN INVESTMENT IN COAL MINING - REUTERS
India expects to have formulated a policy within the next two weeks to attract foreign investment to its coal mining industry, the country’s ...
Wednesday, 16 October 19
INDIA CALLS FOR A RESET OF CLIMATE DEBATE ON COAL AS A FUEL - LIVEMINT
India on Tuesday called for a reset on climate debate on coal as a fuel, in the backdrop of India becoming one of the top renewable energy producer ...
Wednesday, 16 October 19
LESSONS LEARNT FROM CREW INJURED IN HEAVY WEATHER - UK P&I CLUB COMMENTS
KNOWLEDGE TO ELEVATE
Stuart Edmonston, Loss Prevention at UK P&I Club, discusses an incident in which crew were injured whilst on deck in ...
Wednesday, 16 October 19
SHIPPING MARKET INSIGHT - INTERMODAL
In perhaps the most interesting market conditions of the past years, the tanker and the dry bulk industry have created a positive sentiment with re ...
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- Karaikal Port Pvt Ltd - India
- Commonwealth Bank - Australia
- Heidelberg Cement - Germany
- Sarangani Energy Corporation, Philippines
- Thiess Contractors Indonesia
- Ind-Barath Power Infra Limited - India
- Indian Energy Exchange, India
- London Commodity Brokers - England
- AsiaOL BioFuels Corp., Philippines
- Tata Chemicals Ltd - India
- Central Electricity Authority - India
- Wood Mackenzie - Singapore
- IHS Mccloskey Coal Group - USA
- New Zealand Coal & Carbon
- Bulk Trading Sa - Switzerland
- Renaissance Capital - South Africa
- Binh Thuan Hamico - Vietnam
- Jaiprakash Power Ventures ltd
- Kepco SPC Power Corporation, Philippines
- Trasteel International SA, Italy
- Barasentosa Lestari - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sical Logistics Limited - India
- Medco Energi Mining Internasional
- GN Power Mariveles Coal Plant, Philippines
- Leighton Contractors Pty Ltd - Australia
- Bhatia International Limited - India
- Bharathi Cement Corporation - India
- Xindia Steels Limited - India
- ASAPP Information Group - India
- The University of Queensland
- Thai Mozambique Logistica
- Port Waratah Coal Services - Australia
- Timah Investasi Mineral - Indoneisa
- Parliament of New Zealand
- Samtan Co., Ltd - South Korea
- McConnell Dowell - Australia
- International Coal Ventures Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Ministry of Transport, Egypt
- SMC Global Power, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Makmur.PT - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bhoruka Overseas - Indonesia
- Sindya Power Generating Company Private Ltd
- Central Java Power - Indonesia
- Kartika Selabumi Mining - Indonesia
- European Bulk Services B.V. - Netherlands
- PTC India Limited - India
- Meenaskhi Energy Private Limited - India
- Kideco Jaya Agung - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Straits Asia Resources Limited - Singapore
- Indika Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vedanta Resources Plc - India
- Merrill Lynch Commodities Europe
- Star Paper Mills Limited - India
- Gujarat Sidhee Cement - India
- Sakthi Sugars Limited - India
- Coal and Oil Company - UAE
- Australian Coal Association
- Neyveli Lignite Corporation Ltd, - India
- Australian Commodity Traders Exchange
- Kaltim Prima Coal - Indonesia
- Essar Steel Hazira Ltd - India
- Iligan Light & Power Inc, Philippines
- Eastern Energy - Thailand
- Simpson Spence & Young - Indonesia
- Uttam Galva Steels Limited - India
- Indonesian Coal Mining Association
- Maharashtra Electricity Regulatory Commission - India
- Agrawal Coal Company - India
- Eastern Coal Council - USA
- Anglo American - United Kingdom
- Power Finance Corporation Ltd., India
- Petrochimia International Co. Ltd.- Taiwan
- Independent Power Producers Association of India
- Deloitte Consulting - India
- San Jose City I Power Corp, Philippines
- Posco Energy - South Korea
- SMG Consultants - Indonesia
- Directorate Of Revenue Intelligence - India
- VISA Power Limited - India
- Standard Chartered Bank - UAE
- Chettinad Cement Corporation Ltd - India
- Indogreen Group - Indonesia
- South Luzon Thermal Energy Corporation
- Cigading International Bulk Terminal - Indonesia
- Orica Mining Services - Indonesia
- Global Business Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Tamil Nadu electricity Board
- Grasim Industreis Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Georgia Ports Authority, United States
- Salva Resources Pvt Ltd - India
- Videocon Industries ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- CNBM International Corporation - China
- Cement Manufacturers Association - India
- Larsen & Toubro Limited - India
- Oldendorff Carriers - Singapore
- Electricity Authority, New Zealand
- GAC Shipping (India) Pvt Ltd
- Ceylon Electricity Board - Sri Lanka
- Planning Commission, India
- Intertek Mineral Services - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Globalindo Alam Lestari - Indonesia
- LBH Netherlands Bv - Netherlands
- Mjunction Services Limited - India
- Banpu Public Company Limited - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Mercuria Energy - Indonesia
- Madhucon Powers Ltd - India
- Manunggal Multi Energi - Indonesia
- Energy Development Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Malabar Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Minerals Council of Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- White Energy Company Limited
- Edison Trading Spa - Italy
- Indo Tambangraya Megah - Indonesia
- Interocean Group of Companies - India
- Siam City Cement PLC, Thailand
- Coastal Gujarat Power Limited - India
- Bangladesh Power Developement Board
- Baramulti Group, Indonesia
- Orica Australia Pty. Ltd.
- Lanco Infratech Ltd - India
- Kumho Petrochemical, South Korea
- Energy Link Ltd, New Zealand
- Ambuja Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- The State Trading Corporation of India Ltd
- Borneo Indobara - Indonesia
- Therma Luzon, Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Vizag Seaport Private Limited - India
- Rashtriya Ispat Nigam Limited - India
- PNOC Exploration Corporation - Philippines
- Bhushan Steel Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Singapore Mercantile Exchange
- Krishnapatnam Port Company Ltd. - India
- Attock Cement Pakistan Limited
- Metalloyd Limited - United Kingdom
- Meralco Power Generation, Philippines
- Romanian Commodities Exchange
- Parry Sugars Refinery, India
- GMR Energy Limited - India
- GVK Power & Infra Limited - India
- Kobexindo Tractors - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Siam City Cement - Thailand
- Marubeni Corporation - India
- Savvy Resources Ltd - HongKong
- TeaM Sual Corporation - Philippines
- Mintek Dendrill Indonesia
- Chamber of Mines of South Africa
- Gujarat Electricity Regulatory Commission - India
- Price Waterhouse Coopers - Russia
- Antam Resourcindo - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Altura Mining Limited, Indonesia
- Africa Commodities Group - South Africa
- Global Green Power PLC Corporation, Philippines
- Economic Council, Georgia
- Holcim Trading Pte Ltd - Singapore
- Coalindo Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Mercator Lines Limited - India
- Electricity Generating Authority of Thailand
- Aditya Birla Group - India
- Toyota Tsusho Corporation, Japan
- Carbofer General Trading SA - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Petron Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- PowerSource Philippines DevCo
- Makarim & Taira - Indonesia
- OPG Power Generation Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Alfred C Toepfer International GmbH - Germany
- Latin American Coal - Colombia
- Maheswari Brothers Coal Limited - India
- Semirara Mining Corp, Philippines
- The Treasury - Australian Government
- Indian Oil Corporation Limited
- CIMB Investment Bank - Malaysia
- ICICI Bank Limited - India
- Wilmar Investment Holdings
- Bayan Resources Tbk. - Indonesia
- Jindal Steel & Power Ltd - India
- Goldman Sachs - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Sree Jayajothi Cements Limited - India
- Sojitz Corporation - Japan
- MS Steel International - UAE
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Finance - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Ministry of Mines - Canada
- India Bulls Power Limited - India
- Global Coal Blending Company Limited - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Dalmia Cement Bharat India
- Rio Tinto Coal - Australia
- IEA Clean Coal Centre - UK
- Sinarmas Energy and Mining - Indonesia
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