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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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Thursday, 09 May 19
OFFSHORE CARIBBEAN CONGRESS 2019
Offshore Caribbean Congress 2019
Event Date: 4-5th July. 2019t
Location: Georgetown, Guyana
Hess announced a new d ...
Tuesday, 07 May 19
UNDOUBTEDLY A VERY TROUBLED YEAR FOR THE DRY BULK MARKET, SAYS ALLIED SHIPPING
Undoubtedly a very troubled year for the dry bulk market says Allied Shipping in its latest weekly report.
Thomas Chasapis, Re ...
Saturday, 04 May 19
HOW THE 'FAIR VALUE' OF COAL ASSETS IS AFFECTED BY COMMODITY CYCLES - CRU
As with any commodity, valuing coal assets can be tricky due to the cyclical nature of the market. In this insight, CRU discusses how commodity cyc ...
Friday, 03 May 19
SUPRAMAX: WITH WIDESPREAD HOLIDAYS DURING THE WEEK, THE MARKET LACKED IMPETUS - BALTIC BRIEFING
Capesize
The market last week was a tale of two halves, with substantial volatility. Beginning the week on a positive note the C5 West Australi ...
Friday, 03 May 19
COAL INDIA APRIL OUTPUT RISES 1% TO 45.29 MILLION TONNE - PTI
Coal India Ltd (CIL) Wednesday said its coal production in April 2019 rose by 1 per cent to 45.29 million tonne as compared with 44.86 million tonn ...
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- Alfred C Toepfer International GmbH - Germany
- Posco Energy - South Korea
- Gujarat Electricity Regulatory Commission - India
- Ambuja Cements Ltd - India
- Kepco SPC Power Corporation, Philippines
- Electricity Authority, New Zealand
- Heidelberg Cement - Germany
- PTC India Limited - India
- Global Coal Blending Company Limited - Australia
- Metalloyd Limited - United Kingdom
- Indika Energy - Indonesia
- Anglo American - United Kingdom
- Makarim & Taira - Indonesia
- Wilmar Investment Holdings
- Leighton Contractors Pty Ltd - Australia
- India Bulls Power Limited - India
- European Bulk Services B.V. - Netherlands
- Barasentosa Lestari - Indonesia
- Eastern Energy - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Electricity Generating Authority of Thailand
- Bhoruka Overseas - Indonesia
- Mercuria Energy - Indonesia
- Central Electricity Authority - India
- Singapore Mercantile Exchange
- Goldman Sachs - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Kobexindo Tractors - Indoneisa
- Vizag Seaport Private Limited - India
- Essar Steel Hazira Ltd - India
- Port Waratah Coal Services - Australia
- Orica Australia Pty. Ltd.
- Manunggal Multi Energi - Indonesia
- Altura Mining Limited, Indonesia
- Oldendorff Carriers - Singapore
- Kapuas Tunggal Persada - Indonesia
- Sakthi Sugars Limited - India
- Ceylon Electricity Board - Sri Lanka
- Miang Besar Coal Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- GMR Energy Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Ministry of Finance - Indonesia
- Ind-Barath Power Infra Limited - India
- SMC Global Power, Philippines
- Bukit Makmur.PT - Indonesia
- Marubeni Corporation - India
- Eastern Coal Council - USA
- Independent Power Producers Association of India
- Savvy Resources Ltd - HongKong
- CNBM International Corporation - China
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Power Finance Corporation Ltd., India
- Vijayanagar Sugar Pvt Ltd - India
- Dalmia Cement Bharat India
- Meralco Power Generation, Philippines
- Medco Energi Mining Internasional
- LBH Netherlands Bv - Netherlands
- Carbofer General Trading SA - India
- Samtan Co., Ltd - South Korea
- Antam Resourcindo - Indonesia
- Baramulti Group, Indonesia
- Meenaskhi Energy Private Limited - India
- San Jose City I Power Corp, Philippines
- Salva Resources Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mjunction Services Limited - India
- Trasteel International SA, Italy
- Coastal Gujarat Power Limited - India
- Price Waterhouse Coopers - Russia
- Petron Corporation, Philippines
- Borneo Indobara - Indonesia
- Coalindo Energy - Indonesia
- Indonesian Coal Mining Association
- Straits Asia Resources Limited - Singapore
- Formosa Plastics Group - Taiwan
- IHS Mccloskey Coal Group - USA
- International Coal Ventures Pvt Ltd - India
- Cement Manufacturers Association - India
- Sojitz Corporation - Japan
- Renaissance Capital - South Africa
- TeaM Sual Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- Bhatia International Limited - India
- Mercator Lines Limited - India
- Agrawal Coal Company - India
- SN Aboitiz Power Inc, Philippines
- Wood Mackenzie - Singapore
- White Energy Company Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sical Logistics Limited - India
- Planning Commission, India
- ICICI Bank Limited - India
- Bhushan Steel Limited - India
- Xindia Steels Limited - India
- Indian Energy Exchange, India
- Sindya Power Generating Company Private Ltd
- Siam City Cement PLC, Thailand
- VISA Power Limited - India
- Ministry of Transport, Egypt
- IEA Clean Coal Centre - UK
- Ministry of Mines - Canada
- Deloitte Consulting - India
- Coal and Oil Company - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Baiduri Energy - Indonesia
- Latin American Coal - Colombia
- Attock Cement Pakistan Limited
- Maharashtra Electricity Regulatory Commission - India
- Romanian Commodities Exchange
- Aboitiz Power Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Indian Oil Corporation Limited
- Aditya Birla Group - India
- Malabar Cements Ltd - India
- Rio Tinto Coal - Australia
- Semirara Mining and Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Madhucon Powers Ltd - India
- Kartika Selabumi Mining - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Merrill Lynch Commodities Europe
- Bulk Trading Sa - Switzerland
- Indogreen Group - Indonesia
- OPG Power Generation Pvt Ltd - India
- Orica Mining Services - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Sarangani Energy Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Tata Chemicals Ltd - India
- Toyota Tsusho Corporation, Japan
- Parry Sugars Refinery, India
- Banpu Public Company Limited - Thailand
- Parliament of New Zealand
- London Commodity Brokers - England
- Jindal Steel & Power Ltd - India
- Chettinad Cement Corporation Ltd - India
- Central Java Power - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- SMG Consultants - Indonesia
- New Zealand Coal & Carbon
- Directorate Of Revenue Intelligence - India
- Jorong Barutama Greston.PT - Indonesia
- Maheswari Brothers Coal Limited - India
- The University of Queensland
- AsiaOL BioFuels Corp., Philippines
- Kumho Petrochemical, South Korea
- PowerSource Philippines DevCo
- Thiess Contractors Indonesia
- ASAPP Information Group - India
- Australian Commodity Traders Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Pendopo Energi Batubara - Indonesia
- Interocean Group of Companies - India
- GN Power Mariveles Coal Plant, Philippines
- Intertek Mineral Services - Indonesia
- Thai Mozambique Logistica
- Edison Trading Spa - Italy
- Globalindo Alam Lestari - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Karaikal Port Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Uttam Galva Steels Limited - India
- Tamil Nadu electricity Board
- Larsen & Toubro Limited - India
- Minerals Council of Australia
- Bangladesh Power Developement Board
- PetroVietnam Power Coal Import and Supply Company
- McConnell Dowell - Australia
- GAC Shipping (India) Pvt Ltd
- Rashtriya Ispat Nigam Limited - India
- Mintek Dendrill Indonesia
- Siam City Cement - Thailand
- CIMB Investment Bank - Malaysia
- Sree Jayajothi Cements Limited - India
- The Treasury - Australian Government
- Commonwealth Bank - Australia
- Lanco Infratech Ltd - India
- Vedanta Resources Plc - India
- Billiton Holdings Pty Ltd - Australia
- Star Paper Mills Limited - India
- GVK Power & Infra Limited - India
- Jaiprakash Power Ventures ltd
- Grasim Industreis Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Economic Council, Georgia
- South Luzon Thermal Energy Corporation
- Global Business Power Corporation, Philippines
- Energy Development Corp, Philippines
- MS Steel International - UAE
- Gujarat Mineral Development Corp Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Timah Investasi Mineral - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Riau Bara Harum - Indonesia
- Gujarat Sidhee Cement - India
- Bharathi Cement Corporation - India
- Chamber of Mines of South Africa
- Australian Coal Association
- Iligan Light & Power Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Therma Luzon, Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Africa Commodities Group - South Africa
- Energy Link Ltd, New Zealand
- Georgia Ports Authority, United States
- Standard Chartered Bank - UAE
- Videocon Industries ltd - India
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