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