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