Greek Shipping News Cuts
Week 19 - 2004


Transport and communications minister visiting Istanbul on Sunday

---Transport and Communications Minister Mihalis Liapis will visit Istanbul on Sunday to attend, at the invitation of his Turkish counterpart Bineli Yildirim, the laying of foundations for the undersea railway tunnel in the Bosporus which will join the railway networks of Europe and Asia. During his stay in Istanbul, Liapis will be holding talks with the Turkish transport minister on issues concerning the two countries in both the transport and telecommunications sectors.
Source: Robby News, 7 May 04

Syria blacklists four ships, nine companies for Israel links
---DAMASCUS - Syria has banned a Greek, a Danish and two Maltese ships from its ports because they'd made stops in Israeli ports, and has placed nine Israeli companies on a black list, an Economy Ministry statement said on Wednesday.
The Economy Ministry usually acts on recommendations of the office of the Arab boycott of Israel, set up in 1951 by Arab nations to keep companies that did business with Israel from operating in the Arab world. It has little sway anymore, but Syria still acts on its advice.
Mohammed al-Ajami, head of the local office of the Arab boycott of Israel, told The Associated Press that the Greek ship Agios Spyridonk, Danish vessel Puma and the two Maltese ships, Orioni and Medpower, were blacklisted for violating the provisions of the Arab boycott of Israel.
Nine more Israeli companies also were added to the blacklist, a routine procedure whenever the office learns about Israeli ownership of a company.
The ministry statement also lifted the names of two ships from the boycott office's black list, Chahira from North Korea and Italy's Favola, after their owners submitted the required assurances not to visit Israeli ports.
The Syrian ministry in January blacklisted two ships, the Panama Kosmas ship and the Liberian Polsrobbsons ship, for docking at Israeli ports.
The Arab boycott office once was influential - blacklisting more than 8,500 companies, including Coca-Cola and Ford Motor Co. But the boycott has waned considerably as key Arab countries Egypt and Jordan made peace with Israel. Gulf countries started ignoring it after the interim Israeli-Palestinian accords.
Late last month, the campaign for the Arab boycott of Israel held four days of talks in the Syrian capital of Damascus. They expressed satisfaction Iraq pledged not to trade with the Jewish state and urged Europe to put economic pressure on Israel.
The United States banned its companies from complying with the boycott.
Source:, 5 May 2004

Norwegians buying used ships from Greeks? What Gives?
---Is it a clear sign that we are at the TOP of the market? After all, Greeks are famous for buying second hand tonnage from cash strapped Norwegians who overpaid for newbuildings, but now the opposite seems to be occurring. The reality is that the Norwegian private equity market has cash and lots of owners, especially public companies, are keen to sell and leaseback tonnage. Stelmar did another sale / leaseback in 2003 in which Fortis provided the debt and BTM Capital Corp put up the mezzanine. The KS market is sweet, though some think the equity is expensive. Unlike the KG market, owners do not have to give up operational control to release equity in Norway. We should note, however, that brand means a lot in Norway - as does a clean corporate structure - where credit is as important as collateral.
Momentum. That is the best way to describe Overseas Shipholding Group these days. Of course we all knew the company would post a great 1Q04, but the results released this week were breathtaking. Financially, it was the company's best quarter in history. The company logged net income of $76 million, about $2/share, which was up 72% on the previous quarter last year. EBITDA was $156 million versus $94 million in 1Q03. But that is largely thanks to the market.
What we find even more impressive than the numbers is the fact that OSG has been able to be proactive and find opportunities in a high market. They have squeezed absolutely every ounce of fat out of their balance sheet, broadened the capital base and are doing new deals that, while they appear to be tanker deals, are actually pure niche plays where OSG can leverage its brand to provide better, more comprehensive services to customers. We are speaking of the acquisition of a 50% interest in four Hellespont ULCCs and purchase of two US flag bareboat charters from Attransco.
The liquidity that is accumulating in the company is totally unprecedented. OSG has also correctly identified that this is market in which to take full advantage of the excess liquidity in the capital markets. Thanks to the $115 million equity offering in June, the $150 million 20-year bond and HUGE earnings, OSG now has nearly $1 billion in liquidity.
Source: Freshly Minted [], 7 may 04

Newbuilding contracts report
---It was a much quieter week for new contracts with only 22 recorded although within this total there was some significant business.
Orders this week were dominated by the small tanker market. With berth space extremely tight owners are looking long and hard for shipbuilders not normally associated with international construction. Not surprisingly Greek owners are to the fore as entrepreneurs offering technical assistance and guidance and risking construction in these new yards. The trend in South Korea was therefore continued. Last week we recorded a new builder - 21C Shipbuilding or 21st Century Shipbuilding as they are also referred to after it was uncovered that four small multi-purpose freighters were under construction. The first - CANES - was recently delivered and three more of the same class have since been contracted for local owner Shinsung Shipping. Now it is learned that when these are completed the Korean builder will embark on construction of nine 13,000 d.w.t. double hull chemical tankers for Greek and Norwegian account.
There is strong feeling among Greek owners that small double hull tankers, which will now be certified for vegetable oil transport under new regulations to come into force, will be in demand. All the new contracts are classified for IMO II and III cargo transport. This explains why owners such as Unibros, Evalend and Lotus have also moved for similar tonnage at other small yards such as KY Heavy Industries and Nokbong in recent weeks. On this occasion Perosea and Nicholas G. Moundreas have contracted three vessels each with options attached. The odd one out centres on an order for three further vessels from Peter D. Gram, Norway. The latter is more normally associated with the car carrier business so this is a diversion into a new sector. According to information received it also appears that P.D. Gram has teamed up on a joint basis with Blystad, now running operations from Scotland, for two more 12,800 d.w.t. chemical tankers. This order has been placed with New Century, China but more details are lacking. We assume at this stage that these are new contracts and not confused with 21 Century business.
Source: Excerpts of BRL Shipping Consultants Weekly Newbuilding Contracts Report 07 May 2004

Greeks dip into wet niche trade
---A handful of Greek owners are positioning themselves to exploit the new rules on carriage of vegoils.
A number of forward-looking Greek shipowners are carving a niche for themselves in the modern, high-quality chemical/oil tanker market.
Four shipping companies have booked a total of 21 tankers including options through Piraeus-based brokers George Moundreas & Co. Some of the deals have already been revealed but the full extent of the order spree has only now come to light.
George Moundreas's son Pavlos and George Banos and Basil Galanomatis of Moundreas's newbuilding contracting department helped the owners book close to $330m in orders at three smaller Korean shipyards, which are said to be giving attractive delivery dates. All the ships are around 13,000 dwt.
Moundreas says their design, which has been adapted from larger tankers, has a number of features not previously included on smaller tankers. "The specifications of the vessels are very good because this is a new segment," Pavlos Moundreas said.
The tankers will be fitted with an inert-gas system, possibly a first for this size and type of ship.
They will all be IMO II and III chemical/oil tankers, which will put them firmly in line for cargoes expected to come up when changes to the requirements for carrying vegetable oils come into effect. Nicholas Moundreas and Perosea Shipping of Greece ordered their ships at 21st Century Shipbuilding.
Nicholas Moundreas booked three firm ships for delivery between August 2005 and April 2006. The deal includes three options for delivery within 2007.
Perosea also has three firm orders for delivery from August 2006 to April 2007, plus two options for delivery within 2007.
Evalend Shipping, which is traditionally a dry-bulk operator, has placed four firm orders from Nokbong Shipbuilding for delivery between February 2007 and February 2008.
The fourth company is Unibros, which is controlled by the Makrygeorgos family. It specialises in small tankers and its fleet includes a number of elderly units. Unibros has ordered three firm ships plus three options at Mokpo-based KY Heavy Industries.
The first is scheduled for delivery 19 months from the signing of the contract and the other two will be ready in December 2005 and March 2006. The options have been scheduled for delivery at three-month intervals up to December 2006.
Banos says he is convinced the options will all be taken up. The Moundreas executives say they have also been approached by other owners interested in this size of tonnage. But Banos said: "Prices are already moving up."
One advantage the owners have is that common technical supervision for the project is being put in place, giving them significant savings.
Meanwhile, two Greek owners have independently approached Nokbong for products/chemical tankers. Lotus Shipping booked four 10,800-dwt ships plus two options and Ancora Investment Trust ordered two 5,600-dwt and four 8,000-dwt products/chemical tankers.
Source:, Gillian Whittaker Athens, published: 07 May 2004

Financing of Greek shipping firms keeps attracting strong interest from major banks
---The continued confidence in the growth prospects of Greek shipping enterprises among Greek and foreign banks was reflected in a 3 percent rise in the total lending to them in the second half of 2003.
According to data in the annual study by Petrofin Bank Research on the "Main Developments in Greek Shipping Finance in 2003," the total lending to Greek shipping firms rose from $16.525 billion in 2001 to $24.821 billion in June 2003 and $25.554 billion on December 31, 2003.
The study divides the banks which finance Greek shipping into three categories: foreign with a presence in Greece, foreign without a presence in Greece and Greek banks.
Foreign banks with a presence in Greece maintained their lead in the market, with their total loan portfolio to Greek shipping rising by $685 million, or 7.5 percent, in the second half of 2003 to $10.124 billion.
Smaller players pull out
By contrast, the number of foreign banks without a presence in Greece which financed Greek shipping fell from 33 to 29 in the same period, and their total lending was 3.15 percent lower on December 31, at $9.787 billion.
This decline is interpreted as indicative of broader globalization trends and a review by banks of their role.
"Some banks with only a small participation or small shipping portfolios are withdrawing from Greek finance because it does not represent part of their policy," writes Petrofin Bank Research.
The number of Greek banks with shipping portfolios rose from 12 to 15, the newcomers being General, Omega and Aspis, but with a minimal presence. Greek financing of Greek shipping increased 6.75 percent in the second half of 2003 to $5.641 billion. It is worth noting, the study states, that the presence of Greek banks in the sector is being consolidated, mainly as a result of attractive risk and return characteristics.
Seven Greek banks are now in the top 25 - National, Alpha, Piraeus, Emporiki, First Business, EFG Eurobank Ergasias and Laiki.
According to Petrofin Bank Research, banks are showing an increasing interest in financing Greek shipping firms as a result of two factors.
First, their emphasis on new vessels, which have future rather than present borrowing requirements and, second, early repayments of loans as a result of the sale of older vessels which carry high prices.
Ships on order are currently estimated at 310, projected for delivery between 2005 and 2008.
Banks' willingness to lend for new ships continues strong, based on the high standards and sound financial position of Greek clients, and the positive prospects of the international economy, trade and shipping.
However, because shipbuilding costs have risen considerably and most deliveries are expected in 2007 and 2008, banks are beginning to be more cautious in financing new vessels, the report notes.
Looking to the Far East
A new feature of the market is the increasing willingness of Far Eastern banks (mainly Korean) to finance Greek shipowners for orders to local shipbuilders.
There have also been discussions between Greek shipowners and Chinese banks. The role of Chinese shipbuilders is expected to increase in the future, with ready financial packages supported by local banks as part of efforts to clinch orders.
The study notes that spreads of Chinese banks today are at least 0.5 percent lower than Western competitors, which may be an incentive to Greek shipowners to borrow from them.
Source: By Nikos Bardounias - Kathimerini, 3 May 04

Elefsis develops tanker design while Hellenic prepares for court
---While clouds continue to gather over Hellenic Shipyards there is considerable excitement up the road at Elefsis Shipyards as work develops on a newbuilding project which could bring the yard a stream of tanker newbuilding contracts.
In a bid to stop court action a round of talks is underway between the Economy, Development and Defense ministries as HDW tries to offload contracts with the Greek Railways Organisation and Strintzis Lines, which involve heavy penalty payments.
Newsfront has learned meanwhile that, Hellenic's neighbour Elefsis is close to being ready to market a design for a 4,000dwt fully segregated, stainless steel chemical tanker. Working with Norwegian and Finnish designers the yard is developing a design after receiving a number of inquires from Greek and foreign shipowners. Designed for European trading, it's believed the twin-engine tankers will cost between $16m and $18m each, have a speed of 13.5 knots, be less than 100mtrs long and have a draught of 6mtrs. The designers have been working closely with a Greek owner who is said to be interested in three of the ships, though the yard has such confidence in the project it is likely to build a ship on spec.
Source:, 7 Apr 04

Stelmar Shipping announces sale-lease back of nine of its pre-1990 built vessels
---ATHENS, Greece - May 7, 2004 -- Stelmar Shipping Ltd. (NYSE: SJH) today announced that it has completed, with the assistance of DVB Bank and Pareto Private Equity, a five-year sale-lease back transaction for all nine of the Company's pre-1990 built Handymax vessels. The vessels in the transaction include the Ermar and Fulmar, built in 1989; the Allenmar, Primar, Jamar, and Camar built in 1988; and the Capemar, City University, and Colmar built in 1987. The sale-lease back will produce proceeds of approximately $107 million for the Company.
Stelmar will retain commercial control of these nine vessels and they will remain in the Company's fleet over the next five years. Stelmar will realize net cash from the sale of approximately $42 million without recording any non-operating book losses. The sale-lease back arrangements will be completed during May and June 2004.
Peter Goodfellow, Chief Executive Officer and President, stated, "The refinancing of these nine vessels enables Stelmar to generate a significant amount of cash and further improve its balance sheet. We intend to draw upon our strong financial position to seek additional opportunities to further enhance shareholder value and solidify our leadership position in the Handymax and Panamax sectors. With the addition of five newbuildings to be received by July 2004, Stelmar will maintain one of the most modern fleets in the industry and continue to provide customers with safe and environmentally friendly operations."
Stamatis Molaris, Chief Financial Officer, commented, "We are very pleased to have
concluded a transaction that mitigates any residual value risk arising from the Company's pre-1990 built fleet. We have achieved this important objective by exploiting the positive market conditions for secondhand values. We intend to utilize the proceeds from this transaction to decrease the Company's leverage by almost $64 million and further improve our net debt to book capitalization ratio. The combination of our decreasing leverage and significant time charter coverage provides the Company with the financial flexibility to take advantage of opportunities as they arise. We are pleased to have leased back these vessels at a very attractive fixed bareboat rate of less than $6,500 per ship per day on average, and have once again completed a transaction that best serves our shareholders at a very competitive cost. The refinancing will enable the Company to maintain commercial control of core vessels and will be structured in a manner that the effect on quarterly earnings over the remaining half of the year will not exceed $0.08 per share, assuming proceeds are not invested."
Source: Press Release, 7 MAY 04

Royal Olympic Cruise Lines Fails NASDAQ Listing Test
---Royal Olympic Cruise Lines (Nasdaq: ROCLF) announced today that pursuant to a letter dated May 4, 2004 received from The Nasdaq Stock Market, Inc., the company will be de- listed from the NASDAQ National Market at the opening of business on May 13, 2004.
On February 3, 2004, NASDAQ staff notified the Company that its common shares had not maintained a minimum market value of publicly held shares ('MVPHS') of $5 million over the previous 30 consecutive trading days, and, as a result, did not comply with Marketplace Rule 4450(a)(2)1 (the 'Rule'). Therefore in accordance with Marketplace Rule 4450(e)(l), the Company was provided 90 calendar days, or until May 3, 2004, to regain compliance with the Rule.
The Company has not regained compliance in accordance with Marketplace Rules 4450(e)(l). As a result its securities will be de-listed from The NASDAQ National Market at the opening of business on May 13, 2004.
Royal Olympic Cruise Lines is currently operating two cruise ships under the protection of Article 45 of the Greek Courts. Discussions with creditors and lenders continue and the company continues to seek capital needed to continue operations of the company.
This press release contains forward looking statements. Forward looking statements can be identified in many cases by the use of terms such as 'may', 'will', 'should', 'expect', 'intend', 'plan', 'anticipate', 'believe', 'estimate', 'predict', 'continue', or other terms. These statements are based on assumptions that are inherently subject to significant uncertainties and contingencies that are difficult or impossible to predict and are beyond our control and may cause our business activities and results, including the results of any discussion between Royal Olympic and creditors of the debtors, to be materially different from those that are implied by the forward-looking statements. Although we believe that the expectation expressed in our forward-looking statement are reasonable, we cannot assure you of any further business activity or result.
Source: SOURCE Royal Olympic Cruise Lines, PIRAEUS, Greece, 7 May 04

Piraeus, Posidonia and partying
---Shipping's most social exhibition.
It's that time again. Early June in even numbered years and the whole of the shipping world seems to descend on Athens en masse to experience the delights of Posidonia. For regular visitors Posidonia is not so much an exhibition as an institution, and an event which they would not want to miss. For first timers, the sheer number of exhibitors and visitors from across all spectrums of shipping and from all corners of the globe, serves to highlight just how vast the shipping industry is. And to make it more attractive, there are no entry charges to the event which is held at the spiritual heart of Greek shipping on Piraeus' Akti Miaouli in the Port of Piraeus Authority's own exhibition centre. This year's event is the 19th and runs from 7-11 June, although the daytime on Monday will be given over to the Maritime Policy Forum at the Eugenides Foundation Conference Hall. Later that day the official opening ceremony for the exhibition proper takes place. In keeping with the relaxed atmosphere - and the seemingly endless round of evening social events that are a hallmark of Posidonia - the exhibition opens each day at a very civilised 11 0'clock.
Early arrivals can take in the spectacle of the Posidonia Cup yacht races on the Friday preceding the exhibition before acclimatising themselves to the heat and sampling the delights of Greek hospitality over the weekend. Greek shipowners have been having a spending spree on new vessels recently, and have splashed out $2.4Bn on newbuilding in the first quarter of 2004 alone. This investment was matched by deals struck by Greek operators in the second-hand ship market, as the massive renewal of the Greek fleet continues so there are clearly plenty of local clients for exhibitors at Posidonia.
While equipment manufacturers make up the core of exhibitors, Posidonia attracts more ship managers, brokers, insurers, financiers and lawyers that any of its rivals. So visitors should have no problem in finding exactly what they are looking for among the more than 1,500 confirmed exhibitors. At the end of March, exhibitor numbers had not quite reached the level of 2002 but with the organisers are confident that visitor numbers will pass the 16,000 mark and set a new record. Anyone contemplating being among them would be well advised to confirm their hotel reservations early, as accommodation is at a premium during Posidonia week. This year the situation may be even worse for while it will be too early for Olympic games spectators to be arriving, many of the athletes' coaches, trainers and team managers could be making a quick "reccy" of the facilities available.
Source:, 06 May 2004