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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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Sunday, 11 August 19
ULTRAMAX: A 58,000DWT VESSEL OPEN KEMAMAN FIXED FOR TWO TO THREE LADEN LEGS, REDELIVERY SINGAPORE-JAPAN, AT $12,250 - BALTIC BRIEFING
Capesize
With typhoon Lekima gathering pace, numerous China ports were closed by the end of the week and will likely be for two to three days. ...
Tuesday, 06 August 19
SHIPPING MARKET INSIGHT - INTERMODAL
On the 12th of May four tankers were attacked near the coast of Fujairah. The tankers hit were waiving international flags such as that of No ...
Monday, 05 August 19
SUPRAMAX: COAL FROM INDONESIA TO CHINA PAID AT MID $8,000S ON A 57,000-TONNER DELIVERY SOUTH CHINA - BALTIC BRIEFING
Capesize
Having hit a high of $32,963 early last week, the Capesize 5TC now stands at $25,749. This is over 20% of its value lost in 10 days. C ...
Thursday, 01 August 19
PANAMAX: THE SENTIMENT IN THE MARKET IS STILL POSITIVE FOR THE LONGER TERM - FEARNLEYS
Capesize
Two weeks ago the 5TC index was at 33,000 USD pd. Since then it has fallen off a bit and has stayed around 27,000 USD pd the last week ...
Thursday, 01 August 19
INDIKA ENERGY REVENUES DECLINE DUE TO LOW COAL PRICES
One of the largest Indonesian integrated energy companies PT Indika Energy Tbk posted revenues of US $ 1,380.4 million, down 4.6% compared to US $ ...
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- Makarim & Taira - Indonesia
- White Energy Company Limited
- GAC Shipping (India) Pvt Ltd
- Antam Resourcindo - Indonesia
- Kobexindo Tractors - Indoneisa
- Goldman Sachs - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Kaltim Prima Coal - Indonesia
- Jindal Steel & Power Ltd - India
- Samtan Co., Ltd - South Korea
- McConnell Dowell - Australia
- Gujarat Sidhee Cement - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Leighton Contractors Pty Ltd - Australia
- Siam City Cement PLC, Thailand
- Indian Oil Corporation Limited
- Oldendorff Carriers - Singapore
- Krishnapatnam Port Company Ltd. - India
- Sarangani Energy Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- ASAPP Information Group - India
- Wood Mackenzie - Singapore
- Kideco Jaya Agung - Indonesia
- Coal and Oil Company - UAE
- Xindia Steels Limited - India
- Kohat Cement Company Ltd. - Pakistan
- The State Trading Corporation of India Ltd
- Trasteel International SA, Italy
- Vizag Seaport Private Limited - India
- Straits Asia Resources Limited - Singapore
- San Jose City I Power Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Central Electricity Authority - India
- Bhatia International Limited - India
- Ministry of Finance - Indonesia
- Economic Council, Georgia
- Ambuja Cements Ltd - India
- Global Coal Blending Company Limited - Australia
- Deloitte Consulting - India
- Bahari Cakrawala Sebuku - Indonesia
- Riau Bara Harum - Indonesia
- IEA Clean Coal Centre - UK
- Meenaskhi Energy Private Limited - India
- Global Business Power Corporation, Philippines
- Eastern Coal Council - USA
- Commonwealth Bank - Australia
- Semirara Mining and Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Cement Manufacturers Association - India
- Electricity Authority, New Zealand
- Salva Resources Pvt Ltd - India
- Interocean Group of Companies - India
- Simpson Spence & Young - Indonesia
- Parry Sugars Refinery, India
- Pendopo Energi Batubara - Indonesia
- Attock Cement Pakistan Limited
- SN Aboitiz Power Inc, Philippines
- Uttam Galva Steels Limited - India
- Ministry of Transport, Egypt
- Neyveli Lignite Corporation Ltd, - India
- Chamber of Mines of South Africa
- Rio Tinto Coal - Australia
- Star Paper Mills Limited - India
- Singapore Mercantile Exchange
- TeaM Sual Corporation - Philippines
- SMC Global Power, Philippines
- Kartika Selabumi Mining - Indonesia
- Global Green Power PLC Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Kumho Petrochemical, South Korea
- India Bulls Power Limited - India
- LBH Netherlands Bv - Netherlands
- Agrawal Coal Company - India
- Indika Energy - Indonesia
- Energy Link Ltd, New Zealand
- Ministry of Mines - Canada
- Metalloyd Limited - United Kingdom
- London Commodity Brokers - England
- European Bulk Services B.V. - Netherlands
- GN Power Mariveles Coal Plant, Philippines
- Independent Power Producers Association of India
- Merrill Lynch Commodities Europe
- Madhucon Powers Ltd - India
- Posco Energy - South Korea
- Maheswari Brothers Coal Limited - India
- Videocon Industries ltd - India
- Directorate Of Revenue Intelligence - India
- Bukit Baiduri Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Borneo Indobara - Indonesia
- Eastern Energy - Thailand
- Indo Tambangraya Megah - Indonesia
- Meralco Power Generation, Philippines
- Altura Mining Limited, Indonesia
- Siam City Cement - Thailand
- New Zealand Coal & Carbon
- Indian Energy Exchange, India
- Energy Development Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Kepco SPC Power Corporation, Philippines
- ICICI Bank Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Grasim Industreis Ltd - India
- Latin American Coal - Colombia
- Gujarat Mineral Development Corp Ltd - India
- Anglo American - United Kingdom
- Heidelberg Cement - Germany
- Aboitiz Power Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- CNBM International Corporation - China
- Sical Logistics Limited - India
- Power Finance Corporation Ltd., India
- Sojitz Corporation - Japan
- Mercator Lines Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Minerals Council of Australia
- Savvy Resources Ltd - HongKong
- Toyota Tsusho Corporation, Japan
- Jorong Barutama Greston.PT - Indonesia
- The University of Queensland
- Directorate General of MIneral and Coal - Indonesia
- Jaiprakash Power Ventures ltd
- PTC India Limited - India
- PNOC Exploration Corporation - Philippines
- Orica Australia Pty. Ltd.
- Thai Mozambique Logistica
- Sindya Power Generating Company Private Ltd
- Essar Steel Hazira Ltd - India
- Central Java Power - Indonesia
- Aditya Birla Group - India
- Miang Besar Coal Terminal - Indonesia
- Petron Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Globalindo Alam Lestari - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Manunggal Multi Energi - Indonesia
- Medco Energi Mining Internasional
- AsiaOL BioFuels Corp., Philippines
- Chettinad Cement Corporation Ltd - India
- SMG Consultants - Indonesia
- Orica Mining Services - Indonesia
- Bulk Trading Sa - Switzerland
- Edison Trading Spa - Italy
- Karaikal Port Pvt Ltd - India
- PowerSource Philippines DevCo
- Sakthi Sugars Limited - India
- Timah Investasi Mineral - Indoneisa
- Banpu Public Company Limited - Thailand
- Electricity Generating Authority of Thailand
- Lanco Infratech Ltd - India
- VISA Power Limited - India
- Malabar Cements Ltd - India
- Coalindo Energy - Indonesia
- Marubeni Corporation - India
- Mjunction Services Limited - India
- Tamil Nadu electricity Board
- Barasentosa Lestari - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Port Waratah Coal Services - Australia
- OPG Power Generation Pvt Ltd - India
- Australian Coal Association
- Bayan Resources Tbk. - Indonesia
- IHS Mccloskey Coal Group - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhushan Steel Limited - India
- Standard Chartered Bank - UAE
- Iligan Light & Power Inc, Philippines
- Australian Commodity Traders Exchange
- Mintek Dendrill Indonesia
- Bharathi Cement Corporation - India
- Mercuria Energy - Indonesia
- Bangladesh Power Developement Board
- Parliament of New Zealand
- Thiess Contractors Indonesia
- Gujarat Electricity Regulatory Commission - India
- Billiton Holdings Pty Ltd - Australia
- Tata Chemicals Ltd - India
- Africa Commodities Group - South Africa
- Indonesian Coal Mining Association
- Binh Thuan Hamico - Vietnam
- Vedanta Resources Plc - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sree Jayajothi Cements Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Intertek Mineral Services - Indonesia
- Wilmar Investment Holdings
- Larsen & Toubro Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- GVK Power & Infra Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Alfred C Toepfer International GmbH - Germany
- Baramulti Group, Indonesia
- GMR Energy Limited - India
- Georgia Ports Authority, United States
- The Treasury - Australian Government
- CIMB Investment Bank - Malaysia
- Bukit Makmur.PT - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Planning Commission, India
- MS Steel International - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Ind-Barath Power Infra Limited - India
- Renaissance Capital - South Africa
- Carbofer General Trading SA - India
- Romanian Commodities Exchange
- Ceylon Electricity Board - Sri Lanka
- Dalmia Cement Bharat India
- Semirara Mining Corp, Philippines
- Indogreen Group - Indonesia
- Holcim Trading Pte Ltd - Singapore
- International Coal Ventures Pvt Ltd - India
- Price Waterhouse Coopers - Russia
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