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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, 23 September 19
CHINA RECORDS SLOWER GROWTH IN COAL PRODUCTION - XINHUA
The growth of China’s raw coal production slowed down in August, data from the National Bureau of Statistics (NBS) showed.
Aro ...
Friday, 20 September 19
INDIA TO INVITE BIDS FOR COMMERCIAL COAL MINING IN DECEMBER - MINISTER FOR COAL
India aims to begin the process of holding the first round of commercial coal mining auctions December end, Minister for Coal, Mines and Parliament ...
Friday, 20 September 19
INDIA: ECONOMIC SLOWDOWN IMPACTS COAL IMPORT CARGO IN H1 FY20 - PTI
Economic slowdown has impacted coal import cargo in the first half of this fiscal, as overall cargo growth at major ports registered a marginal gro ...
Wednesday, 18 September 19
SHIPPING MARKET INSIGHT - INTERMODAL
During the first week of September, I had the privilege of attending the Donsö Shipping Meet 2019, in Donsö, a small island of around 1,& ...
Tuesday, 17 September 19
PANAMA SHIP REGISTRY MODERNIZES SHIP REGISTRATION
The Panama Ship Registry has announced it will integrate in a single platform “Electronic Ship Registration System (ESRS)” the present ...
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- CIMB Investment Bank - Malaysia
- Electricity Generating Authority of Thailand
- Iligan Light & Power Inc, Philippines
- Indogreen Group - Indonesia
- Independent Power Producers Association of India
- Semirara Mining and Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- PNOC Exploration Corporation - Philippines
- SMC Global Power, Philippines
- Kartika Selabumi Mining - Indonesia
- Malabar Cements Ltd - India
- OPG Power Generation Pvt Ltd - India
- Meralco Power Generation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Gujarat Sidhee Cement - India
- Kaltim Prima Coal - Indonesia
- San Jose City I Power Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kumho Petrochemical, South Korea
- Chettinad Cement Corporation Ltd - India
- Jindal Steel & Power Ltd - India
- Bhatia International Limited - India
- Baramulti Group, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Wilmar Investment Holdings
- Essar Steel Hazira Ltd - India
- Savvy Resources Ltd - HongKong
- Miang Besar Coal Terminal - Indonesia
- Indonesian Coal Mining Association
- Power Finance Corporation Ltd., India
- Neyveli Lignite Corporation Ltd, - India
- Leighton Contractors Pty Ltd - Australia
- Grasim Industreis Ltd - India
- Sakthi Sugars Limited - India
- Edison Trading Spa - Italy
- Aditya Birla Group - India
- Bukit Makmur.PT - Indonesia
- SMG Consultants - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Riau Bara Harum - Indonesia
- Straits Asia Resources Limited - Singapore
- Rashtriya Ispat Nigam Limited - India
- Toyota Tsusho Corporation, Japan
- Maharashtra Electricity Regulatory Commission - India
- CNBM International Corporation - China
- Oldendorff Carriers - Singapore
- GAC Shipping (India) Pvt Ltd
- Star Paper Mills Limited - India
- Australian Commodity Traders Exchange
- Tata Chemicals Ltd - India
- Indika Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- Coastal Gujarat Power Limited - India
- Economic Council, Georgia
- Intertek Mineral Services - Indonesia
- Mercuria Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Sindya Power Generating Company Private Ltd
- Krishnapatnam Port Company Ltd. - India
- Kobexindo Tractors - Indoneisa
- Bhushan Steel Limited - India
- Interocean Group of Companies - India
- Videocon Industries ltd - India
- Australian Coal Association
- Tamil Nadu electricity Board
- Maheswari Brothers Coal Limited - India
- Binh Thuan Hamico - Vietnam
- Barasentosa Lestari - Indonesia
- Posco Energy - South Korea
- Salva Resources Pvt Ltd - India
- ICICI Bank Limited - India
- MS Steel International - UAE
- Directorate General of MIneral and Coal - Indonesia
- Xindia Steels Limited - India
- Eastern Coal Council - USA
- Bank of Tokyo Mitsubishi UFJ Ltd
- Timah Investasi Mineral - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Heidelberg Cement - Germany
- Minerals Council of Australia
- Asmin Koalindo Tuhup - Indonesia
- Orica Mining Services - Indonesia
- Trasteel International SA, Italy
- Bayan Resources Tbk. - Indonesia
- Ambuja Cements Ltd - India
- Makarim & Taira - Indonesia
- Coalindo Energy - Indonesia
- Ministry of Mines - Canada
- Sarangani Energy Corporation, Philippines
- Cement Manufacturers Association - India
- Global Business Power Corporation, Philippines
- Renaissance Capital - South Africa
- Uttam Galva Steels Limited - India
- Larsen & Toubro Limited - India
- Bangladesh Power Developement Board
- Banpu Public Company Limited - Thailand
- Therma Luzon, Inc, Philippines
- Bulk Trading Sa - Switzerland
- Central Electricity Authority - India
- Parry Sugars Refinery, India
- Energy Link Ltd, New Zealand
- Kalimantan Lumbung Energi - Indonesia
- Siam City Cement PLC, Thailand
- ASAPP Information Group - India
- AsiaOL BioFuels Corp., Philippines
- PowerSource Philippines DevCo
- Semirara Mining Corp, Philippines
- Latin American Coal - Colombia
- Pendopo Energi Batubara - Indonesia
- Orica Australia Pty. Ltd.
- SN Aboitiz Power Inc, Philippines
- Central Java Power - Indonesia
- Borneo Indobara - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Port Waratah Coal Services - Australia
- Directorate Of Revenue Intelligence - India
- Karaikal Port Pvt Ltd - India
- Indian Oil Corporation Limited
- Singapore Mercantile Exchange
- Agrawal Coal Company - India
- Vizag Seaport Private Limited - India
- TeaM Sual Corporation - Philippines
- Thai Mozambique Logistica
- Ministry of Finance - Indonesia
- Bharathi Cement Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Merrill Lynch Commodities Europe
- Siam City Cement - Thailand
- Mintek Dendrill Indonesia
- Kepco SPC Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Dalmia Cement Bharat India
- Coal and Oil Company - UAE
- Billiton Holdings Pty Ltd - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wood Mackenzie - Singapore
- Ministry of Transport, Egypt
- Lanco Infratech Ltd - India
- India Bulls Power Limited - India
- Mercator Lines Limited - India
- Formosa Plastics Group - Taiwan
- Bahari Cakrawala Sebuku - Indonesia
- Marubeni Corporation - India
- White Energy Company Limited
- South Luzon Thermal Energy Corporation
- Eastern Energy - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Gujarat Electricity Regulatory Commission - India
- McConnell Dowell - Australia
- The State Trading Corporation of India Ltd
- Thiess Contractors Indonesia
- Price Waterhouse Coopers - Russia
- Aboitiz Power Corporation - Philippines
- Mjunction Services Limited - India
- Petron Corporation, Philippines
- Anglo American - United Kingdom
- Petrochimia International Co. Ltd.- Taiwan
- Bhoruka Overseas - Indonesia
- Meenaskhi Energy Private Limited - India
- Carbofer General Trading SA - India
- New Zealand Coal & Carbon
- GMR Energy Limited - India
- Alfred C Toepfer International GmbH - Germany
- The University of Queensland
- Deloitte Consulting - India
- European Bulk Services B.V. - Netherlands
- Manunggal Multi Energi - Indonesia
- IEA Clean Coal Centre - UK
- Romanian Commodities Exchange
- Altura Mining Limited, Indonesia
- Globalindo Alam Lestari - Indonesia
- PTC India Limited - India
- Georgia Ports Authority, United States
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Energy Development Corp, Philippines
- Rio Tinto Coal - Australia
- Africa Commodities Group - South Africa
- Ind-Barath Power Infra Limited - India
- Kideco Jaya Agung - Indonesia
- IHS Mccloskey Coal Group - USA
- London Commodity Brokers - England
- The Treasury - Australian Government
- Parliament of New Zealand
- Ceylon Electricity Board - Sri Lanka
- Bukit Baiduri Energy - Indonesia
- Chamber of Mines of South Africa
- TNB Fuel Sdn Bhd - Malaysia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Attock Cement Pakistan Limited
- Goldman Sachs - Singapore
- Indian Energy Exchange, India
- Commonwealth Bank - Australia
- Sojitz Corporation - Japan
- Pipit Mutiara Jaya. PT, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Sinarmas Energy and Mining - Indonesia
- VISA Power Limited - India
- Vedanta Resources Plc - India
- GVK Power & Infra Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Global Green Power PLC Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Kapuas Tunggal Persada - Indonesia
- Madhucon Powers Ltd - India
- Samtan Co., Ltd - South Korea
- Sical Logistics Limited - India
- Medco Energi Mining Internasional
- International Coal Ventures Pvt Ltd - India
- Electricity Authority, New Zealand
- Metalloyd Limited - United Kingdom
- Planning Commission, India
- Global Coal Blending Company Limited - Australia
- Standard Chartered Bank - UAE
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