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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, 12 June 19
IMO 2020 - COUNTDOWN TO 1 JANUARY 2020 -HOW WILL THE CHANGES AFFECT REFINING AND SHIPPING? - WOOD MACKENZIE
We know that the IMO’s regulations represent the biggest step change the shipping industry has ever seen and the implications will be felt th ...
Wednesday, 12 June 19
SHIPPING MARKET INSIGHT - INTERMODAL
This year’s tanker S&P activity keeps edging higher compared to the same period in 2018. Year to date we have seen some 143 ships, rangin ...
Tuesday, 11 June 19
INDONESIAN COAL PRICE REFERENCE SET AT $81.48 PER TON IN JUNE, DOWN 15.66 PERCENT YEAR-ON-YEAR
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down again the benchmark price of Indonesian th ...
Monday, 10 June 19
CONSECUTIVE OWNERS OF CARGO: WHO HOLDS TITLE AND THE RIGHT TO SUE? - COLIN BIGGERS & PAISLEY
KNOWLEDGE TO ELEVATE
In Tritton Resources Pty Ltd v Ever Rock Navigation S.A. [2019] FCA 276, the Federal Court considered the application of ...
Monday, 10 June 19
KOSPO INVITES BIDS FOR 1,305,000 MT OF MIN 5600 KCAL/KG NCV COAL FOR SEPT 2019 TO DEC 2021
COALspot.com: South Korea state-owned utility Korea Southern Power Co. Ltd (KOSPO) issued a tender for 435,000 MT (per year) of max 5,600 kcal/kg N ...
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- Ceylon Electricity Board - Sri Lanka
- Offshore Bulk Terminal Pte Ltd, Singapore
- Directorate Of Revenue Intelligence - India
- Ambuja Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- The State Trading Corporation of India Ltd
- McConnell Dowell - Australia
- Africa Commodities Group - South Africa
- CIMB Investment Bank - Malaysia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Manunggal Multi Energi - Indonesia
- PTC India Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Jaiprakash Power Ventures ltd
- Xindia Steels Limited - India
- Ministry of Mines - Canada
- Larsen & Toubro Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Latin American Coal - Colombia
- ASAPP Information Group - India
- Maheswari Brothers Coal Limited - India
- The Treasury - Australian Government
- Petron Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Sical Logistics Limited - India
- GMR Energy Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Kalimantan Lumbung Energi - Indonesia
- Coalindo Energy - Indonesia
- IEA Clean Coal Centre - UK
- Price Waterhouse Coopers - Russia
- Krishnapatnam Port Company Ltd. - India
- Indo Tambangraya Megah - Indonesia
- Mintek Dendrill Indonesia
- Eastern Coal Council - USA
- Bhushan Steel Limited - India
- Interocean Group of Companies - India
- Heidelberg Cement - Germany
- Aditya Birla Group - India
- Medco Energi Mining Internasional
- Savvy Resources Ltd - HongKong
- Coastal Gujarat Power Limited - India
- Chettinad Cement Corporation Ltd - India
- European Bulk Services B.V. - Netherlands
- Ind-Barath Power Infra Limited - India
- Carbofer General Trading SA - India
- Merrill Lynch Commodities Europe
- Kapuas Tunggal Persada - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- ICICI Bank Limited - India
- PowerSource Philippines DevCo
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vedanta Resources Plc - India
- Eastern Energy - Thailand
- Economic Council, Georgia
- Kideco Jaya Agung - Indonesia
- Georgia Ports Authority, United States
- SMG Consultants - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Kumho Petrochemical, South Korea
- Mercuria Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Trasteel International SA, Italy
- Borneo Indobara - Indonesia
- Sojitz Corporation - Japan
- Miang Besar Coal Terminal - Indonesia
- Salva Resources Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Malabar Cements Ltd - India
- Barasentosa Lestari - Indonesia
- Cement Manufacturers Association - India
- Makarim & Taira - Indonesia
- Power Finance Corporation Ltd., India
- Cigading International Bulk Terminal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Simpson Spence & Young - Indonesia
- Orica Australia Pty. Ltd.
- Tamil Nadu electricity Board
- Mercator Lines Limited - India
- India Bulls Power Limited - India
- White Energy Company Limited
- Indian Energy Exchange, India
- Baramulti Group, Indonesia
- Madhucon Powers Ltd - India
- SMC Global Power, Philippines
- Riau Bara Harum - Indonesia
- London Commodity Brokers - England
- PetroVietnam Power Coal Import and Supply Company
- South Luzon Thermal Energy Corporation
- Ministry of Finance - Indonesia
- Straits Asia Resources Limited - Singapore
- Videocon Industries ltd - India
- Commonwealth Bank - Australia
- Siam City Cement - Thailand
- Bhatia International Limited - India
- Goldman Sachs - Singapore
- Kepco SPC Power Corporation, Philippines
- Central Electricity Authority - India
- Indonesian Coal Mining Association
- Asia Pacific Energy Resources Ventures Inc, Philippines
- VISA Power Limited - India
- Global Business Power Corporation, Philippines
- Star Paper Mills Limited - India
- Indogreen Group - Indonesia
- SN Aboitiz Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Dalmia Cement Bharat India
- Independent Power Producers Association of India
- Marubeni Corporation - India
- Toyota Tsusho Corporation, Japan
- Indika Energy - Indonesia
- Gujarat Sidhee Cement - India
- Anglo American - United Kingdom
- Singapore Mercantile Exchange
- Bulk Trading Sa - Switzerland
- Orica Mining Services - Indonesia
- Jindal Steel & Power Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Therma Luzon, Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Australian Coal Association
- Energy Link Ltd, New Zealand
- Neyveli Lignite Corporation Ltd, - India
- IHS Mccloskey Coal Group - USA
- The University of Queensland
- Indian Oil Corporation Limited
- Energy Development Corp, Philippines
- Formosa Plastics Group - Taiwan
- PNOC Exploration Corporation - Philippines
- Port Waratah Coal Services - Australia
- Vijayanagar Sugar Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Mjunction Services Limited - India
- AsiaOL BioFuels Corp., Philippines
- Electricity Generating Authority of Thailand
- International Coal Ventures Pvt Ltd - India
- Deloitte Consulting - India
- Asmin Koalindo Tuhup - Indonesia
- Bangladesh Power Developement Board
- Antam Resourcindo - Indonesia
- Agrawal Coal Company - India
- Banpu Public Company Limited - Thailand
- Pendopo Energi Batubara - Indonesia
- Posco Energy - South Korea
- Standard Chartered Bank - UAE
- Global Green Power PLC Corporation, Philippines
- Rio Tinto Coal - Australia
- MS Steel International - UAE
- Bhoruka Overseas - Indonesia
- Planning Commission, India
- Bayan Resources Tbk. - Indonesia
- Parry Sugars Refinery, India
- Edison Trading Spa - Italy
- LBH Netherlands Bv - Netherlands
- Karaikal Port Pvt Ltd - India
- Minerals Council of Australia
- GVK Power & Infra Limited - India
- Tata Chemicals Ltd - India
- Coal and Oil Company - UAE
- New Zealand Coal & Carbon
- TeaM Sual Corporation - Philippines
- Renaissance Capital - South Africa
- Central Java Power - Indonesia
- Attock Cement Pakistan Limited
- Electricity Authority, New Zealand
- Semirara Mining Corp, Philippines
- Parliament of New Zealand
- Sindya Power Generating Company Private Ltd
- San Jose City I Power Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Transport, Egypt
- Siam City Cement PLC, Thailand
- Kohat Cement Company Ltd. - Pakistan
- Sakthi Sugars Limited - India
- Romanian Commodities Exchange
- Bukit Baiduri Energy - Indonesia
- Wood Mackenzie - Singapore
- Altura Mining Limited, Indonesia
- Iligan Light & Power Inc, Philippines
- Wilmar Investment Holdings
- Metalloyd Limited - United Kingdom
- Bharathi Cement Corporation - India
- Bukit Asam (Persero) Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
- Oldendorff Carriers - Singapore
- CNBM International Corporation - China
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sree Jayajothi Cements Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Meenaskhi Energy Private Limited - India
- Lanco Infratech Ltd - India
- Australian Commodity Traders Exchange
- Uttam Galva Steels Limited - India
- Aboitiz Power Corporation - Philippines
- Grasim Industreis Ltd - India
- Essar Steel Hazira Ltd - India
- Meralco Power Generation, Philippines
- Chamber of Mines of South Africa
- Thiess Contractors Indonesia
- GAC Shipping (India) Pvt Ltd
- Directorate General of MIneral and Coal - Indonesia
- Kobexindo Tractors - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Makmur.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Thai Mozambique Logistica
- Globalindo Alam Lestari - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Samtan Co., Ltd - South Korea
- Gujarat Electricity Regulatory Commission - India
- Semirara Mining and Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
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