Greek Shipping News Cuts
Week 14 - 2004
---Unions in Greece are disrupting transportation, manufacturing and construction of venues for the summer Olympic Games with a national strike today to demand higher wages and a shorter workweek.
Unions are seeking an 8 percent wage rise, more than double what employers have offered in talks for a national agreement that is the basis for contracts for 2.5 million workers. Unions are also seeking to cut the workweek by one hour to 39 hours.
The strike is being held three weeks into Prime Minister Costas Karamanlis's new government and comes as Greece struggles to finish stadiums, arenas, roads and train links for the Olympics in August. As of last month, fewer than half the venues were ready, prompting Karamanlis to put himself in charge of preparations.
The Olympics ``puts pressure on both sides to reach an agreement fast,'' said Odysseas Kyriakopoulos, president of the Greek Federation of Industries, the nation's biggest employers association.
Trains, ferries and public transportation will shut for 24 hours and the strike may bring the city of Athens, which generates about one third of Greece's output, to a standstill and hamper business at companies including National Bank of Greece SA and Titan Cement SA. Even the arrival of the Olympic flame, set to reach Athens today, may be disrupted.
Olympic Airways, the state-owned airline, said it doesn't anticipate having to cancel flights as airport workers are set to stay on the job. Shipping may be affected because maritime workers will strike from midnight.
Karamanlis's New Democracy party, which won elections earlier this month for the first time in more than a decade, has pledged to avoid confrontation with unions in the run-up to the games. The government has said it will stay out of the wage negotiations between unions and private employers.
The wage demands are the highest since at least 1997 as workers seek to extract more benefits from employers in an economy that is expanding at the fastest pace in the European Union. The economy grew by about 4.2 percent last year, Economy Minister George Alogoskoufis said last week, driven by more than $8 billion in spending on the games.
That growth has contributed to hourly wages rising by 20 percent between 2000 and 2003, compared with a 10 percent average increase in the European Union, the Bank of Greece estimates. Even with the rise, wage rates in Greece remain at about half the EU average, according to the Greek central bank.
``Things are simple. We have growth of about 5 percent and this means we won't step back on our demand for 8 percent,'' in wage increases,'' said Christos Polyzogopoulos, president of the Confederation of Greek Workers, which is leading the contract talks, in an interview on state-owned NET radio.
Greek workers say wage increases also need to reflect the rising cost of living fueled by the Olympic boom. Inflation may accelerate by more than 3.5 percent this year, about twice the current EU average, if the Olympics prompt businesses to raise prices, European Central Bank council member Nikos Garganas said earlier this week at a press conference in Athens.
Karamanlis has fanned expectations for higher salaries by pledging to raise incomes to the EU average, from about half the EU rate now, within eight years. That promise has fed concerns among executives that Greek businesses will have problems competing as their costs increase and economic growth slows after the Olympics, economists said.
``The question is how much can the economy endure,'' said Platon Monokroussos, head economist at EFG Eurobank Ergasias SA.
By Theophilos Argitis in Athens.
Source: http://quote.bloomberg.com, 31 Mar 04
Debt level of passenger shipping companies declines after five years
---Listed passenger shipping companies may finally be entering calmer seas, at least as far as their indebtedness is concerned.
According to an annual survey by XRTC, consultants on maritime affairs to French bank Credit Lyonnais (whose Greek business was taken over by Piraeus Bank), listed passenger shipping firms' indebtedness fell for the first time in the past five years in 2003. Total indebtedness to financial institutions dropped 5.22 percent, to 1.941 billion euros, from 2.048 billion at the end of 2002.
This reduction is mainly due to two reasons: the debt restructuring achieved by firms thanks to lower interest rate levels, and the sale of new ships.
The five biggest passenger shippers - Minoan Lines, ANEK, Strintzis Lines, Attica Enterprises and Maritime of Lesvos (NEL) - have borrowed from 37 different banks in 10 countries. Specifically, 48 percent of the 1.941-billion-euro debt is owed to German banks and 27 percent to Greek banks. The rest of the debt, a quarter of the total, is to banks registered in the Netherlands (8 percent), France (7 percent), the United States (7 percent) and in five other countries (3 percent). Attica Enterprises accounts for 35 percent of the total debt, followed by Minoan Lines (31 percent), ANEK (17 percent), Strintzis (11 percent) and NEL (6 percent).
The greatest part of the loans were not taken from just one bank but were syndicated loans. According to the report, the smallest contribution by a bank to a syndicated loan was a mere 200,000 euros, while the largest single contribution was 496 million.
Companies, as well as individuals, resort to loan restructuring in order to reduce annual payment installments that may be considered excessive, relative to the borrower's financial capacity. Restructuring, done almost exclusively when interest rates are dropping, also helps transform a short-term loan into a long-term one, thus making annual payments more affordable. Companies can thus afford to expand by spending more on investments. In a sense, banks play a regulatory role, because it is their response to a request for loan restructuring that will determine the scope of a company's business plan.
Almost all negotiations for loan restructuring were successful. This proves that Greek passenger shipping firms have built a trusting relationship with financial institutions, something that was not a given a few years ago, when many shippers faced a financial crisis.
Moreover the obligation by passenger shippers to renew their fleet in line with new regulations imposing an age limit of 30 years in the near future, will further interest the banks in financing the sector, as more orders for new ships are expected.
In order to eliminate any doubts or fears on the part of the banks, the State must intervene in two ways: First, it must ensure that the deregulated domestic market will operate under regulations that will not change every few years and that will ensure viability; second, passenger shippers must cooperate and not be adversaries. This will reduce risks for the lenders.
Source: By Nikos Bardounias - Kathimerini, 31 Mar 04
Austal's shares up on ferry contract
---Boat builder Austal Ltd's shares surged after it told the market it has a new contract to make a fast ferry for a major Greek fleet owner.
The Perth shipbuilder will craft an 85-metre vehicle and passenger ferry for Hellas Flying Dolphins, swelling the Greek company's fleet of ferries to 24.
Austal's shares gained five cents or 5.43 per cent to close at 97 cents after the announcement which means Austal now has 30 vessels on order at its four shipyards.
Its revenue to come from the current contracts is about $480 million.
Executive chairman John Rothwell said the new contract, to deliver the ferry in 2005, would make no difference to the bottom line in 2003/04.
"But we're certainly improving and we'll have a decent end of year report - but certainly not what my aim is going forward," Mr Rothwell said.
Austal was forced to issue a profit warning in December 2002, partly because its luxury yacht subsidiary, Oceanfast, had overrun costs in building golfer Greg Norman's `Aussie Rules' yacht.
In February 2004 the company said it was still hurting from the completion of unprofitable luxury yachts but it managed to post a $3.03 million net profit for the half year to December 2003, compared to a net loss of $13.48 million in the previous corresponding period.
Mr Rothwell said the company's outlook was now much brighter.
"Our future is looking very good," he said.
"There seems to be a lot more interest back into the large ferries at the moment - certainly we're dealing with a number of good inquiries."
"It's unlikely that we'll have a hole in our order book in the foreseeable future."
He said the company believed it could be successful in getting work from the United States.
"We continue to have confidence that the combat ships, that we bid for, will come our way or a big chunk of them," he said.
"I think that in five years from now Austal will look like a different company."
Source: www.theage.com.au/ 2 Apr 04 - 8:30PM
Magouras legal team files plea for bail to human rights court
With the Spanish legal system likely to take a very long time before it gets around to wanting Magouras, 68, to appear before a court, there have been repeated appeals to Spanish authorities since the master was freed to ease the bail restrictions. These have all been rejected, leading to the decision of his legal team to take the master's case to the court in Strasbourg. However, the Strasbourg court also moves slowly and it could be months before it decides whether it will even hear the application.
Magouras spent 85 days in jail in Galicia, Spain before being released February 7, 2003. He was arrested and accused by Spanish authorities of causing harm to the environment and disobeying civil authorities during the six-day struggle to keep the damaged laden Prestige afloat, November 2002.
Source: Newsfront, Week 13, 2 Apr 04
Freighter damages coral reef off Port Everglades
---A freighter that ran aground off Fort Lauderdale last week smashed coral and sheared off sponges over a wide area, in what environmental officials say was the area's worst grounding in many years.
Divers this week discovered a destruction zone 1,200 feet long and 200 feet wide along the second reef from shore. They also found the crushed remains of a loggerhead sea turtle, a federally protected species.
"Everything was pulverized to rubble," said Ken Banks, manager of marine resources programs for Broward County, who dove Wednesday on the reef. "There was basically total destruction of the reef framework and anything living on it. This is probably the most extensive reef damage we've seen in Broward County in the last 10 years."
The Eastwind, a Greek-owned ship carrying bauxite and oil, ran up on the reef last Friday while trying to enter Port Everglades. The ship damaged its
propeller in the accident and remained at the port for repairs. The Coast Guard is investigating.
The owner will be required to pay for any repairs that are possible, such as cementing live coral back into place and stabilizing the rubble so it doesn't move and cause more damage. After that, the state will require the company to pay for mitigation work to improve the marine environment around the accident site.
Records at Port Everglades list the ship's owner as Eastwind Maritime. Jim Lawrence, spokesman for UK P&I Club, the owner's London-based insurance company, said they would cooperate with efforts to repair the reef and investigate the accident.
"The company is very pleased to be working through that process and is cooperating and wants to get it resolved to everyone's satisfaction," he said.
Lawrence said the company hasn't determined the cause of the accident. "The Coast Guard is investigating," he said. "The goal from our perspective is to figure it out and take steps so it doesn't happen again."
As the 544-foot ship scraped the reef, it destroyed ridges of ancient coral. While this coral was no longer alive, it formed the substrate on which carpets of live coral, sponges and other creatures lived. The ship flattened a lot of this coral, wrecking habitat for many marine organisms, said Banks, of Broward County.
While marine creatures may recolonize the area, they won't find the same complexity of habitat, with varying depths and substrates, that made the reef such a biologically rich environment, he said.
At first, fish may be attracted to the crushed reef because they would try to find food there, he said. But as time passes, the area will attract few fish because it won't offer the food sources that would attract fish to graze the reef.
"The reef that was crushed is basically dead right now," Banks said.
Walt Jaap, associate research scientist at the Florida Marine Research Institute, said the ship appeared to move a lot once it hit the reef, dislodging organisms as it scraped along.
"The ship was basically like a plow," said Jaap, who dove the reef this week. "There is quite a lot of injury to the site."
In the past, companies that harmed reefs were required to mitigate the damage by creating artificial reefs of limestone or other hard materials to provide habitat for coral, sponges and other reef species. But recently, the state and county have told companies to spend their money removing tires from a vast undersea tire field off Fort Lauderdale, where tires were dumped in a failed effort to create an artificial reef. Jaap said tire removal was an option in this case.
The reefs near Port Everglades have suffered repeated groundings. Last summer, the Alam Sanang, a cement freighter flying a Malaysian flag, ran aground in about the same area as the Eastwind.
"We've had quite a lot of groundings in Fort Lauderdale, probably because of the amount of shipping in the area," Banks said. "This one area of reef has been impacted by five or six groundings in the past few years. We've got to figure out some way to avoid this."
Source: www.Sun-Sentinel.com, 1 Apr 04
John Xylas to Turkey for cement trio
---Melissa Shipping of Greece, a relatively new company under the control of John Xylas, has contracted to build three pneumatic-type cement carriers at the Yardimci Shipyard in Turkey.
Xylas confirms that one 9,000-dwt vessel has been booked for delivery in the fourth quarter of 2005 and two 6,000-dwt units for the first and third quarters of 2006. The contracts are believed to be based on a euro price of between EUR 15m ($18.3m) and EUR 16m for the large vessel and between EUR 13m and EUR 14m for the smaller ones.
Melissa currently controls three elderly cement carriers, two of 6,400-dwt and one of 4,900-dwt which were acquired in the last quarter of 2003.
The company has won a long-term contract from France's Lafarge group that will see its ships serving the Greek market. Lafarge controls Greece's Heracles cement company. The contract is not based on an annual tonnage quota, Xylas says, and could run as long as 20 years.
Xylas is also CEO of Ariston Navigation in Piraeus, which operates two containerships and one cargoship. His name came to prominence as one of the partners in the now defunct Mint Enterprises. But as a group the Xylas operation has long experience of newbuildings with more than 50 under its belt. Four of those were built at Yardimci's facilities in Tuzla Bay as a joint venture with Yardimci and Denmark's Clipper Group.
Source: www.tradewinds.no, 2 Apr 04
Everton fire unfortunate for Polembros
---POLEMBROS, the Piraeus-based shipowner, is licking its wounds again this week as it assesses the damage to its tanker Everton. The Maltese-registered 81,634dwt vessel caught fire off the Oman coast after an alleged 'hit and run' collision with a fishing vessel. Salvage firm Smit International started lightering the remaining cargo off the fire-damaged vessel on 30 March, transferring the Iranian oil to the tanker Alfaship.
According to a Polembros spokesman it is still too early to assess the full extent of the damage to the vessel which is likely to be towed to Fujairah, once the ship-to-ship transfer has been completed. One Filipino seafarer died in the fire, and the remaining 24 had to be rescued by the Norwegian car carrier Hual Asia. Seven of the crew are now back on board the vessel to assist with the Smit operations. The remaining crew were left waiting in Dubai. The incident could not have come at a worse time for Polembros, which is still dealing with the fallout from the wrecking of the Tasman Spirit in Karachi last July. Described by one Polembros spokesman as "unfortunate" and "a most regrettable situation", the Everton collision is likely to raise questions about Polembros' operations.
Source: Newswatch, Fairplay International Shipping Weekly, 01 Apr 04
ABS Delegation of Authority Expanded in Greece
--- (Houston, TX---) ABS has signed a new agreement with the Greek Shipping Ministry expanding its authority to perform statutory certifications on their behalf. This expanded agreement includes survey and certification services for passenger vessels, including ships engaged exclusively in domestic voyages such as island ferries under the Hellenic flag, as well as certifications to the IMO's International Ship and Port Security (ISPS) Code.
With this agreement ABS is now authorized to act as a recognized security organization (RSO) and to issue International Ship Security Certificates (ISSC) on behalf of 41 flag administrations.
ABS' longstanding presence in Greece is further underscored with 232 ships in the ABS worldwide fleet under Greek flag totaling approximately 10.4 million gross tons.
At the signing ceremony Hellenic Coast Guard Commodore A. Kamarinakis said, "We recognize ABS is one of the world's leading ship classification societies and a traditional partner in maritime safety. This authorization will strengthen the worldwide efforts in fostering security awareness as well as quality and competitiveness of the Greek fleet."
Nearly 150 ABS auditors have been trained to assist shipowners with meeting both IMO requirements and, when required, the additional security-related standards required for awarding the optional ABS class notation for security (ABS SEC).
ABS was the first classification society to issue guidance on meeting the ship security code and distributed thousands of the first edition of the ABS Guide for Ship Security in response to industry demands. The second edition is now available in print and in CD version. It can also be downloaded from the ABS web site.
Founded in 1862, ABS is a leading international classification society devoted to promoting the security of life, property and the marine environment through the development and verification of standards for the design, construction and operational maintenance of marine-related facilities.
Source: News Release , 1 Apr 04
TEN signs letter of intent for the construction of liquefied natural gas tankers
---Company Expects To Enter Rapidly Growing LNG Market During 2007
Tsakos Energy Navigation Limited (TEN) (NYSE:TNP) today announced that it has signed a Letter of Intent (LOI) with a shipyard specializing in the building of Liquefied Natural Gas (LNG) tankers for the construction of one LNG tanker of 145,000 cubic meter capacity for delivery in July 2007. The LOI also provides for an option for an additional vessel for delivery later that year. These newbuilds would represent TEN's first orders for vessels in the rapidly growing LNG market.
Mr. Nikolas Tsakos, President and CEO of TEN, stated, "LNG currently represents one of the fastest growing shipping segments in the global energy market. In 2003, the global LNG trade grew by 13% and is expected to double by 2010. Low cost natural gas reserves in the Middle East and Africa, combined with a decreasing cost structure of the LNG process, will allow large-scale expansion of the trade. With the vessels announced today, TEN is poised to join a select group of operators who will be able to take advantage of this growing market segment."
The current LNG carrier market appears very fragmented, with only 40 owners operating 160 vessels, and is characterized by long-term contracts that typically average about 20 years. The long-term fundamentals of this sector are sound, as most LNG vessels currently on order (approximately 60 vessels) are already dedicated to satisfy the transportation needs of specific existing LNG projects. Current market estimates project demand growth for LNG tankers to exceed the current orderbook by 100 vessels by 2010. Increased competition for shipyard capacity from tankers, bulkers and containerships has resulted in a shortage in LNG shipbuilding capacity.
Based on projections from the US Department of Energy, US LNG imports are expected to rise to 50 million tons per year by 2010, representing a compounded annual growth rate of over 25%. As a result of the expected growth in LNG demand, expansion projects are already being planned at the four existing LNG regasification terminals in the US, and many liquefaction projects have been proposed to facilitate the expected increase in US LNG imports. While LNG imports into the US doubled in 2003, this amount represented only 2% of U.S. natural gas demand. In addition many liquefaction projects are also currently under underway around the globe in order to meet the rise in worldwide LNG demand.
"The announcement of this letter of intent begins a new chapter in the history of TEN," Mr. Tsakos continued. "Our commitment to a diversified fleet to meet the growing needs of our clients will be further enhanced by our ability to serve the LNG market. Looking to the future, we are confident that the global demand for these types of vessels will increase dramatically. The high-spec nature of these LNG carriers, as well as the 10 ice-class vessels that we currently have on order, will provide for significant charter premiums, increased earnings and shareholder returns."
Including options and the LNG carriers announced today, TEN's fleet is expected to grow to 44 vessels by the end of 2007. Out of the 28 vessels currently trading, 22 operate with medium or long-term employment contracts, some at variable rates, accounting for 70% of the operating days for 2004, and 56% of the operating days of 2005. These contracts will generate a minimum of approximately $140 million in revenues for 2004 and $110 million for 2005, which should provide a sustainable flow of earnings. The company currently employs its remaining 6 vessels in the spot market. Currently, 90% of TEN's fleet is of the double hull design.
ABOUT TSAKOS ENERGY NAVIGATION
TEN currently operates a fleet of 28 vessels (including one chartered-in aframax, the Olympia, and the two suezmaxes, the renamed Cape Baker and Cape Balboa, recently the subject of the sale and charter-back deal). The fleet comprises 2,981,252 DWT and has an average age of 6.9 years, compared to the average for the world's tanker tonnage which has an average age of 12.8 years. TEN is scheduled to take delivery of a further fourteen newbuildings between 2004 and 2007. The Company also has options for two additional vessels, a handysized tanker for delivery in 2004 and an LNG carrier for delivery in 2007. The resulting fleet of 42 vessels (excluding the options but including the chartered-in aframax and suezmaxes) with 3,969,572 DWT will include 30 newbuildings (1997-2007) with 2,970,633 DWT and 145,000 cubic meters.
Except for the historical information contained herein, the matters discussed in this press release are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those predicted by such forward-looking statements. TEN undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise.
Source: Tsakos Energy Navigation Limited, 31 Mar 04
People & Companies
---Davies Johnson & Co, Marine & Commercial Solicitors, of Plymouth is pleased to announce that Louise Glover and Nicholas Robinson have joined the firm.
Johnny Johnson, partner at Davies Johnson says:
"We are delighted to be joined by Louise and Nick, who will bring our number of qualified staff to 8. Both Louise and Nick are well known in the Greek market and we are lucky to have them both on board. They bring with them a wealth of experience in our specialist niche areas of shipping and international trade law, supporting our aim to provide as high a standard of legal service as Clients expect of the London market and at a more cost-effective level."
Louise Glover joins the firm from Holmes Hardingham where she had been in partnership since 1993 after qualifying at Richards Butler. She specialises in all aspects of litigation arising out of international trade, particularly charterparty and bill of lading disputes. She represents leading P&I clubs, shipowners, operators and charterers around the world. She lectures on shipping law, is a CEDR accredited mediator and is on the Admiralty Solicitors Group panel of shipping mediators. She will be a partner from 1st May 2004.
Nicholas Robinson joins as a Consultant. He has, since 1976, similarly specialised in all aspects of marine and insurance litigation and related commercial matters. he was a partner of Holman Fenwick & Willan between 1982 and 1989 - in London and Hong Kong - and headed the Shipping Department at Herbert Smith between 1989 and 1999. After working with Clifford Chance as a partner Nick set up his own legal business consultancy in 2002. He is an accredited mediator and a panel member of the ACI.
Source: Davies Johnson & Co., 1 Apr 04