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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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Monday, 08 April 19
SULPHUR 2020 - COUNTDOWN TO THE SWITCHOVER - LLOYD'S REGISTER
Sulphur 2020 (MARPOL Annex VI Reg. 14.1.3) is still dominating headlines and as we draw closer to the 1 January 2020 deadline it’s clear that ...
Monday, 08 April 19
INDONESIAN COAL PRICE REFERENCE PRICE PLUMMETS TO LOW NOT SEEN SINCE AUGUST 2017
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down the benchmark price of Indonesian thermal ...
Sunday, 07 April 19
SHIP PASSAGE PLANS - NO ROOM FOR ERROR! - WATSON FARLEY & WILLIAMS
KNOWLEDGE TO ELEVATE
The English High Court’s judgment in Alize 1954 v Allianz Elementar Versicherungs AG (The CMA CGM Libra) is an impo ...
Sunday, 07 April 19
IMO 2020: READY OR NOT? - WOOD MACKENZIE
New Year’s Day 2020 is firmly marked in the calendar as the refining and shipping industries prepare for change.
The International Marit ...
Saturday, 06 April 19
AUSTRALIA COAL POSTS BIGGEST WEEKLY DROP IN A DECADE AMID WEAK DEMAND - REUTERS
Australian thermal coal prices this week registered their biggest weekly fall since the financial market turmoil of a decade ago as demand plunged ...
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- Marubeni Corporation - India
- Sinarmas Energy and Mining - Indonesia
- Aditya Birla Group - India
- Merrill Lynch Commodities Europe
- Australian Commodity Traders Exchange
- Miang Besar Coal Terminal - Indonesia
- White Energy Company Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PowerSource Philippines DevCo
- Essar Steel Hazira Ltd - India
- Planning Commission, India
- Leighton Contractors Pty Ltd - Australia
- GMR Energy Limited - India
- Ambuja Cements Ltd - India
- New Zealand Coal & Carbon
- Orica Mining Services - Indonesia
- Sree Jayajothi Cements Limited - India
- Kepco SPC Power Corporation, Philippines
- Romanian Commodities Exchange
- Indogreen Group - Indonesia
- Interocean Group of Companies - India
- Coastal Gujarat Power Limited - India
- Orica Australia Pty. Ltd.
- Timah Investasi Mineral - Indoneisa
- Makarim & Taira - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Vijayanagar Sugar Pvt Ltd - India
- The University of Queensland
- Ind-Barath Power Infra Limited - India
- Global Green Power PLC Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Iligan Light & Power Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Coalindo Energy - Indonesia
- Port Waratah Coal Services - Australia
- Asmin Koalindo Tuhup - Indonesia
- Siam City Cement - Thailand
- VISA Power Limited - India
- Jindal Steel & Power Ltd - India
- Lanco Infratech Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Parliament of New Zealand
- CNBM International Corporation - China
- Global Business Power Corporation, Philippines
- Latin American Coal - Colombia
- Minerals Council of Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Simpson Spence & Young - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Baramulti Group, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Economic Council, Georgia
- GAC Shipping (India) Pvt Ltd
- Bhoruka Overseas - Indonesia
- Mercator Lines Limited - India
- Posco Energy - South Korea
- ICICI Bank Limited - India
- The Treasury - Australian Government
- Maharashtra Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- The State Trading Corporation of India Ltd
- Central Java Power - Indonesia
- Barasentosa Lestari - Indonesia
- SN Aboitiz Power Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Bharathi Cement Corporation - India
- Global Coal Blending Company Limited - Australia
- Metalloyd Limited - United Kingdom
- TNB Fuel Sdn Bhd - Malaysia
- Mintek Dendrill Indonesia
- Ministry of Transport, Egypt
- Maheswari Brothers Coal Limited - India
- Anglo American - United Kingdom
- Bulk Trading Sa - Switzerland
- MS Steel International - UAE
- Mercuria Energy - Indonesia
- Energy Link Ltd, New Zealand
- IHS Mccloskey Coal Group - USA
- Meenaskhi Energy Private Limited - India
- Rio Tinto Coal - Australia
- Therma Luzon, Inc, Philippines
- Parry Sugars Refinery, India
- Africa Commodities Group - South Africa
- Eastern Energy - Thailand
- Uttam Galva Steels Limited - India
- AsiaOL BioFuels Corp., Philippines
- GVK Power & Infra Limited - India
- Oldendorff Carriers - Singapore
- Bukit Baiduri Energy - Indonesia
- Indonesian Coal Mining Association
- Borneo Indobara - Indonesia
- Price Waterhouse Coopers - Russia
- Manunggal Multi Energi - Indonesia
- Bhatia International Limited - India
- Pendopo Energi Batubara - Indonesia
- Meralco Power Generation, Philippines
- Binh Thuan Hamico - Vietnam
- Electricity Authority, New Zealand
- Carbofer General Trading SA - India
- IEA Clean Coal Centre - UK
- Goldman Sachs - Singapore
- Tamil Nadu electricity Board
- Kobexindo Tractors - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Indian Energy Exchange, India
- LBH Netherlands Bv - Netherlands
- SMG Consultants - Indonesia
- TeaM Sual Corporation - Philippines
- Madhucon Powers Ltd - India
- Jaiprakash Power Ventures ltd
- Billiton Holdings Pty Ltd - Australia
- PTC India Limited - India
- Indian Oil Corporation Limited
- Georgia Ports Authority, United States
- Karaikal Port Pvt Ltd - India
- Sical Logistics Limited - India
- European Bulk Services B.V. - Netherlands
- McConnell Dowell - Australia
- Cigading International Bulk Terminal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Energy Development Corp, Philippines
- Wood Mackenzie - Singapore
- Wilmar Investment Holdings
- Renaissance Capital - South Africa
- Ministry of Mines - Canada
- Star Paper Mills Limited - India
- Siam City Cement PLC, Thailand
- Kartika Selabumi Mining - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- Standard Chartered Bank - UAE
- Australian Coal Association
- Antam Resourcindo - Indonesia
- Bangladesh Power Developement Board
- Riau Bara Harum - Indonesia
- Grasim Industreis Ltd - India
- Gujarat Sidhee Cement - India
- Kohat Cement Company Ltd. - Pakistan
- Chettinad Cement Corporation Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Kaltim Prima Coal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Power Finance Corporation Ltd., India
- Ministry of Finance - Indonesia
- Heidelberg Cement - Germany
- Edison Trading Spa - Italy
- Sakthi Sugars Limited - India
- Commonwealth Bank - Australia
- India Bulls Power Limited - India
- Trasteel International SA, Italy
- Central Electricity Authority - India
- Coal and Oil Company - UAE
- Samtan Co., Ltd - South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Videocon Industries ltd - India
- Malabar Cements Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Attock Cement Pakistan Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Thai Mozambique Logistica
- Altura Mining Limited, Indonesia
- Tata Chemicals Ltd - India
- London Commodity Brokers - England
- South Luzon Thermal Energy Corporation
- Toyota Tsusho Corporation, Japan
- Eastern Coal Council - USA
- Bukit Makmur.PT - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Indika Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- Globalindo Alam Lestari - Indonesia
- Electricity Generating Authority of Thailand
- Aboitiz Power Corporation - Philippines
- Thiess Contractors Indonesia
- Holcim Trading Pte Ltd - Singapore
- Dalmia Cement Bharat India
- Chamber of Mines of South Africa
- Intertek Mineral Services - Indonesia
- Savvy Resources Ltd - HongKong
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Formosa Plastics Group - Taiwan
- Sarangani Energy Corporation, Philippines
- SMC Global Power, Philippines
- Larsen & Toubro Limited - India
- International Coal Ventures Pvt Ltd - India
- Sojitz Corporation - Japan
- Ceylon Electricity Board - Sri Lanka
- PNOC Exploration Corporation - Philippines
- ASAPP Information Group - India
- Deloitte Consulting - India
- Bayan Resources Tbk. - Indonesia
- Agrawal Coal Company - India
- Cement Manufacturers Association - India
- Banpu Public Company Limited - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Vizag Seaport Private Limited - India
- Mjunction Services Limited - India
- Xindia Steels Limited - India
- CIMB Investment Bank - Malaysia
- Singapore Mercantile Exchange
- Independent Power Producers Association of India
- San Jose City I Power Corp, Philippines
- Salva Resources Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Petron Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Bhushan Steel Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Medco Energi Mining Internasional
- Bahari Cakrawala Sebuku - Indonesia
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