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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, 17 April 19
LNG WESTERN AFRICA CONFERENCE 2019
The only LNG Focus Platform to Accelerate Investment and Cooperation in Western African Countries
LNG Western Africa Conference 2019 ...
Saturday, 13 April 19
IMO 2020 - DON'T SCRUB IT! - IVAR MYKLEBUST
KNOWLEDGE TO ELEVATE
Höegh Autoliners stands firm on its decision not to implement scrubbers but comply with the IMO 2020 regulations by ...
Saturday, 13 April 19
CAPESIZE: WEST AUSTRALIA TO CHINA IRON ORE CARGOES LIFTING FROM $4.60 PMT TO ABOVE $5.00 - BALTIC BRIEFING
Capesize
The market saw a steep ascent from the depths of last week. The Baltic Capesize Index (BCI) 5TC opened on Monday at $5,099, although b ...
Friday, 12 April 19
OIL MARKET REPORT: MIXED SIGNALS - IEA
The huge increase in oil production we saw in 2H18 has reversed following the implementation of the new Vienna Agreement and the increasing effecti ...
Friday, 12 April 19
OFFSHORE MENA CONGRESS 2019
Offshore MENA Congress 2019
Event Date : 11-12th Jun. 2019
Location : Cairo, Egypt
Offshore MENA Congress 2019 Offshor ...
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- The Treasury - Australian Government
- Binh Thuan Hamico - Vietnam
- Siam City Cement - Thailand
- Mintek Dendrill Indonesia
- White Energy Company Limited
- Cigading International Bulk Terminal - Indonesia
- Africa Commodities Group - South Africa
- Posco Energy - South Korea
- Salva Resources Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Meralco Power Generation, Philippines
- Goldman Sachs - Singapore
- Metalloyd Limited - United Kingdom
- Bayan Resources Tbk. - Indonesia
- Straits Asia Resources Limited - Singapore
- Grasim Industreis Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Jindal Steel & Power Ltd - India
- Makarim & Taira - Indonesia
- TeaM Sual Corporation - Philippines
- Bulk Trading Sa - Switzerland
- London Commodity Brokers - England
- Minerals Council of Australia
- PowerSource Philippines DevCo
- Iligan Light & Power Inc, Philippines
- Thiess Contractors Indonesia
- Billiton Holdings Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- Manunggal Multi Energi - Indonesia
- GAC Shipping (India) Pvt Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Carbofer General Trading SA - India
- Toyota Tsusho Corporation, Japan
- Bhoruka Overseas - Indonesia
- Karaikal Port Pvt Ltd - India
- Aditya Birla Group - India
- Planning Commission, India
- CIMB Investment Bank - Malaysia
- Gujarat Mineral Development Corp Ltd - India
- Altura Mining Limited, Indonesia
- SN Aboitiz Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Bangladesh Power Developement Board
- India Bulls Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Coalindo Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Sindya Power Generating Company Private Ltd
- Uttam Galva Steels Limited - India
- Holcim Trading Pte Ltd - Singapore
- Banpu Public Company Limited - Thailand
- South Luzon Thermal Energy Corporation
- Mercuria Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- Interocean Group of Companies - India
- Petron Corporation, Philippines
- Merrill Lynch Commodities Europe
- Jaiprakash Power Ventures ltd
- Rio Tinto Coal - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vedanta Resources Plc - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Intertek Mineral Services - Indonesia
- Simpson Spence & Young - Indonesia
- Economic Council, Georgia
- Globalindo Alam Lestari - Indonesia
- Coal and Oil Company - UAE
- Mercator Lines Limited - India
- Port Waratah Coal Services - Australia
- Malabar Cements Ltd - India
- Formosa Plastics Group - Taiwan
- TNB Fuel Sdn Bhd - Malaysia
- Sarangani Energy Corporation, Philippines
- Thai Mozambique Logistica
- Global Green Power PLC Corporation, Philippines
- Indogreen Group - Indonesia
- LBH Netherlands Bv - Netherlands
- Dalmia Cement Bharat India
- New Zealand Coal & Carbon
- Heidelberg Cement - Germany
- Bharathi Cement Corporation - India
- Oldendorff Carriers - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- ASAPP Information Group - India
- Borneo Indobara - Indonesia
- Indo Tambangraya Megah - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Asmin Koalindo Tuhup - Indonesia
- Bhushan Steel Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Madhucon Powers Ltd - India
- Indian Oil Corporation Limited
- Eastern Energy - Thailand
- Xindia Steels Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Marubeni Corporation - India
- Bahari Cakrawala Sebuku - Indonesia
- Global Coal Blending Company Limited - Australia
- International Coal Ventures Pvt Ltd - India
- Commonwealth Bank - Australia
- Pendopo Energi Batubara - Indonesia
- Bhatia International Limited - India
- Singapore Mercantile Exchange
- Indian Energy Exchange, India
- Pipit Mutiara Jaya. PT, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sical Logistics Limited - India
- Latin American Coal - Colombia
- Ministry of Finance - Indonesia
- Electricity Generating Authority of Thailand
- Directorate Of Revenue Intelligence - India
- MS Steel International - UAE
- Meenaskhi Energy Private Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- VISA Power Limited - India
- Ambuja Cements Ltd - India
- Global Business Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- Bukit Makmur.PT - Indonesia
- Gujarat Sidhee Cement - India
- Bukit Asam (Persero) Tbk - Indonesia
- Riau Bara Harum - Indonesia
- Aboitiz Power Corporation - Philippines
- Anglo American - United Kingdom
- Deloitte Consulting - India
- Vizag Seaport Private Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Lanco Infratech Ltd - India
- Wilmar Investment Holdings
- Independent Power Producers Association of India
- Ministry of Mines - Canada
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- McConnell Dowell - Australia
- Kaltim Prima Coal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Cement Manufacturers Association - India
- Baramulti Group, Indonesia
- Orica Australia Pty. Ltd.
- Videocon Industries ltd - India
- PTC India Limited - India
- Star Paper Mills Limited - India
- Chettinad Cement Corporation Ltd - India
- Therma Luzon, Inc, Philippines
- Essar Steel Hazira Ltd - India
- Sojitz Corporation - Japan
- Parliament of New Zealand
- Chamber of Mines of South Africa
- Maheswari Brothers Coal Limited - India
- Siam City Cement PLC, Thailand
- Orica Mining Services - Indonesia
- Electricity Authority, New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- Mjunction Services Limited - India
- Tata Chemicals Ltd - India
- Parry Sugars Refinery, India
- Agrawal Coal Company - India
- Medco Energi Mining Internasional
- Tamil Nadu electricity Board
- Eastern Coal Council - USA
- The University of Queensland
- Barasentosa Lestari - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Standard Chartered Bank - UAE
- Jorong Barutama Greston.PT - Indonesia
- Bukit Baiduri Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- ICICI Bank Limited - India
- GMR Energy Limited - India
- Alfred C Toepfer International GmbH - Germany
- IHS Mccloskey Coal Group - USA
- San Jose City I Power Corp, Philippines
- Edison Trading Spa - Italy
- Indonesian Coal Mining Association
- GVK Power & Infra Limited - India
- Larsen & Toubro Limited - India
- Sakthi Sugars Limited - India
- Power Finance Corporation Ltd., India
- Attock Cement Pakistan Limited
- Savvy Resources Ltd - HongKong
- PNOC Exploration Corporation - Philippines
- Kumho Petrochemical, South Korea
- Renaissance Capital - South Africa
- CNBM International Corporation - China
- The State Trading Corporation of India Ltd
- Georgia Ports Authority, United States
- SMC Global Power, Philippines
- Wood Mackenzie - Singapore
- SMG Consultants - Indonesia
- Energy Link Ltd, New Zealand
- Ministry of Transport, Egypt
- Price Waterhouse Coopers - Russia
- Semirara Mining and Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Antam Resourcindo - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Ind-Barath Power Infra Limited - India
- Semirara Mining Corp, Philippines
- Romanian Commodities Exchange
- Timah Investasi Mineral - Indoneisa
- European Bulk Services B.V. - Netherlands
- Indika Energy - Indonesia
- Central Java Power - Indonesia
- OPG Power Generation Pvt Ltd - India
- Central Electricity Authority - India
- Energy Development Corp, Philippines
- Trasteel International SA, Italy
- Australian Commodity Traders Exchange
- Maharashtra Electricity Regulatory Commission - India
- Krishnapatnam Port Company Ltd. - India
- Sree Jayajothi Cements Limited - India
- Australian Coal Association
- Kapuas Tunggal Persada - Indonesia
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