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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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- Coal and Oil Company - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Coal Council - USA
- Trasteel International SA, Italy
- Kapuas Tunggal Persada - Indonesia
- Thiess Contractors Indonesia
- Standard Chartered Bank - UAE
- Iligan Light & Power Inc, Philippines
- Petron Corporation, Philippines
- Savvy Resources Ltd - HongKong
- PowerSource Philippines DevCo
- Sinarmas Energy and Mining - Indonesia
- Antam Resourcindo - Indonesia
- Global Business Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Commonwealth Bank - Australia
- Leighton Contractors Pty Ltd - Australia
- Gujarat Mineral Development Corp Ltd - India
- Sree Jayajothi Cements Limited - India
- Aditya Birla Group - India
- Petrochimia International Co. Ltd.- Taiwan
- Altura Mining Limited, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Indo Tambangraya Megah - Indonesia
- Kumho Petrochemical, South Korea
- PTC India Limited - India
- Thai Mozambique Logistica
- Directorate Of Revenue Intelligence - India
- Cigading International Bulk Terminal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Kartika Selabumi Mining - Indonesia
- Coastal Gujarat Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Jindal Steel & Power Ltd - India
- Edison Trading Spa - Italy
- Bhatia International Limited - India
- Semirara Mining and Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Therma Luzon, Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Bhoruka Overseas - Indonesia
- ICICI Bank Limited - India
- Ind-Barath Power Infra Limited - India
- LBH Netherlands Bv - Netherlands
- Merrill Lynch Commodities Europe
- Ceylon Electricity Board - Sri Lanka
- Heidelberg Cement - Germany
- Planning Commission, India
- Timah Investasi Mineral - Indoneisa
- Essar Steel Hazira Ltd - India
- Chamber of Mines of South Africa
- Bukit Makmur.PT - Indonesia
- Tamil Nadu electricity Board
- Latin American Coal - Colombia
- GMR Energy Limited - India
- Parliament of New Zealand
- Makarim & Taira - Indonesia
- Intertek Mineral Services - Indonesia
- Riau Bara Harum - Indonesia
- Indian Oil Corporation Limited
- Videocon Industries ltd - India
- ASAPP Information Group - India
- Metalloyd Limited - United Kingdom
- Romanian Commodities Exchange
- Central Electricity Authority - India
- The University of Queensland
- VISA Power Limited - India
- The State Trading Corporation of India Ltd
- New Zealand Coal & Carbon
- Anglo American - United Kingdom
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PNOC Exploration Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- OPG Power Generation Pvt Ltd - India
- Xindia Steels Limited - India
- Independent Power Producers Association of India
- Singapore Mercantile Exchange
- Karaikal Port Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Finance - Indonesia
- Central Java Power - Indonesia
- Vedanta Resources Plc - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wilmar Investment Holdings
- Billiton Holdings Pty Ltd - Australia
- Goldman Sachs - Singapore
- Parry Sugars Refinery, India
- Semirara Mining Corp, Philippines
- Jaiprakash Power Ventures ltd
- Georgia Ports Authority, United States
- Formosa Plastics Group - Taiwan
- Bukit Baiduri Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Straits Asia Resources Limited - Singapore
- Ministry of Transport, Egypt
- Medco Energi Mining Internasional
- SMG Consultants - Indonesia
- Cement Manufacturers Association - India
- San Jose City I Power Corp, Philippines
- Posco Energy - South Korea
- Meralco Power Generation, Philippines
- Indika Energy - Indonesia
- Energy Link Ltd, New Zealand
- Energy Development Corp, Philippines
- CNBM International Corporation - China
- Mercator Lines Limited - India
- Star Paper Mills Limited - India
- Marubeni Corporation - India
- Maheswari Brothers Coal Limited - India
- Sical Logistics Limited - India
- GAC Shipping (India) Pvt Ltd
- Krishnapatnam Port Company Ltd. - India
- Power Finance Corporation Ltd., India
- Bhushan Steel Limited - India
- India Bulls Power Limited - India
- Rio Tinto Coal - Australia
- Carbofer General Trading SA - India
- Vijayanagar Sugar Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Lanco Infratech Ltd - India
- Mjunction Services Limited - India
- Orica Mining Services - Indonesia
- Port Waratah Coal Services - Australia
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement - Thailand
- Renaissance Capital - South Africa
- MS Steel International - UAE
- Banpu Public Company Limited - Thailand
- Australian Commodity Traders Exchange
- Karbindo Abesyapradhi - Indoneisa
- Australian Coal Association
- Global Green Power PLC Corporation, Philippines
- Vizag Seaport Private Limited - India
- Africa Commodities Group - South Africa
- IEA Clean Coal Centre - UK
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Siam City Cement PLC, Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- London Commodity Brokers - England
- Minerals Council of Australia
- Bangladesh Power Developement Board
- Holcim Trading Pte Ltd - Singapore
- Deloitte Consulting - India
- Alfred C Toepfer International GmbH - Germany
- Attock Cement Pakistan Limited
- Sarangani Energy Corporation, Philippines
- The Treasury - Australian Government
- Indian Energy Exchange, India
- Kobexindo Tractors - Indoneisa
- SMC Global Power, Philippines
- Salva Resources Pvt Ltd - India
- Sakthi Sugars Limited - India
- Orica Australia Pty. Ltd.
- Kepco SPC Power Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- McConnell Dowell - Australia
- Gujarat Sidhee Cement - India
- Mintek Dendrill Indonesia
- Kideco Jaya Agung - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Samtan Co., Ltd - South Korea
- Economic Council, Georgia
- Indonesian Coal Mining Association
- Barasentosa Lestari - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Madhucon Powers Ltd - India
- Tata Chemicals Ltd - India
- Binh Thuan Hamico - Vietnam
- Global Coal Blending Company Limited - Australia
- Wood Mackenzie - Singapore
- Aboitiz Power Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Simpson Spence & Young - Indonesia
- Coalindo Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Bharathi Cement Corporation - India
- Malabar Cements Ltd - India
- European Bulk Services B.V. - Netherlands
- TeaM Sual Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Eastern Energy - Thailand
- Indogreen Group - Indonesia
- Grasim Industreis Ltd - India
- Dalmia Cement Bharat India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Chettinad Cement Corporation Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Uttam Galva Steels Limited - India
- Ministry of Mines - Canada
- International Coal Ventures Pvt Ltd - India
- Sojitz Corporation - Japan
- Maharashtra Electricity Regulatory Commission - India
- Rashtriya Ispat Nigam Limited - India
- Baramulti Group, Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Bayan Resources Tbk. - Indonesia
- Electricity Generating Authority of Thailand
- Kaltim Prima Coal - Indonesia
- Electricity Authority, New Zealand
- South Luzon Thermal Energy Corporation
- Sindya Power Generating Company Private Ltd
- Interocean Group of Companies - India
- Ambuja Cements Ltd - India
- CIMB Investment Bank - Malaysia
- White Energy Company Limited
- Oldendorff Carriers - Singapore
- Bulk Trading Sa - Switzerland
- Price Waterhouse Coopers - Russia
- Agrawal Coal Company - India
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Larsen & Toubro Limited - India
- GVK Power & Infra Limited - India
- Borneo Indobara - Indonesia
- Meenaskhi Energy Private Limited - India
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