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