Greek Shipping News Cuts
Week 23 - 2004


Greek owners on the crest of a wave

---Greek shipping is not just about magnitude but fair play, says DAVID HUGHES
GREEK owners can be forgiven for being upbeat right now. Not only are the markets rewarding them for weathering the lean years but the country's shipping community and government have also pulled off a rare success in the political arena. And, of course, all of Greece is brimming with pride and enthusiasm for the Olympics which Athens hosts shortly after the Posidonia exhibition shuts its doors.
Many within the Greek shipping community will feel very pleased that, for once, Greece has got its way at the International Maritime Organisation (IMO), scuppering moves to make double sides mandatory for bulk carriers. Like many in the Asian shipping community, the Greek owners often feel that their views are not heard at the IMO or by the ever environmentally conscious European Union. But, at the IMO's Maritime Safety Committee last month, the Greeks forced a significant U-turn.
The message coming out in the run-up to this year's Posidonia is that Greek shipping matters. The IMO vote underlines the view of the chairman of the Union of Greek Shipowners, Nicos Efthymiou, that shipping people come to Posidonia not only because of the magnitude of the Greek fleet but also in recognition of the fact that Greeks influence decisions regarding 'good operation of sea transportation, free competition, the protection of the environment and the training and education of ships' crew to meet the demands posed by today's very modern vessels'.
The caricatures and the realities of Greek and Chinese shipping companies are remarkably similar. The archetypal Greek shipping firm is a family business based on the enterprise of a strong-founding individual a generation or three ago. It likes to keep its business close to its chest and will quite likely only admit to being the managing agent of the vessels it controls, quite possibly through single-ship companies.
Personal relationships count for a lot and, according to the stereotype at least, this firm tends to shun the modern corporate model of the listed company and is not overly impressed by the notion of business transparency. Reality is much more complex, though businesses exactly like the one described can indeed be found at more than a few addresses on the famous Piraeus street Akti Miaouli and its environs.
As with Asian shipping companies, many Greek owners, in complete contrast to the stereotype, are at the forefront of corporate practice with large, modern fleets, websites full of information for potential investors, stock exchange listings in Athens, London and New York and boardroom practices as transparent as can be found anywhere. The most obvious and important fact about Greek shipowners is simply that there are so many of them. According to the organiser of the Posidonia exhibition, Greece has 730 shipping companies, many with offices 'a stone's throw' from the Piraeus Port Exhibition Centre where the biennial shipping gathering is held.
One thing to remember, though, is that Greek owners do not base their operations only in Greece. Many run operations from overseas, especially in London and New York. There is a London-based organisation, the Greek Shipping Cooperation Committee (GSCC), founded in 1935, which represents some 150 Greek shipowners with offices in London and New York. In fact, it is difficult to define 'Greek shipping' or a 'Greek owner'. Many owners outside Greece have links with the country even though their operational bases, and their homes, may be elsewhere.
Nevertheless, GSCC figures for last year put Greek companies as controlling 9.3 per cent of the world's fleet in terms of vessel numbers, 18.3 per cent by deadweight tonnage and 15.9 per cent by gross tonnage. All of those figures were up slightly from the previous year. Over half of the Greek fleet fly the national flag though these vessels represent only about a third of Greek controlled gross tonnage.
As a broad generalisation, Greek owners are strongly involved in the bulk trades and have relatively little involvement in liner shipping. The formerly widespread perception of Greek shipping as based largely on very old tonnage is, however, way out of date. Mr Efthymiou said recently: 'For the past decade the Greek-owned fleet has held top position worldwide and now represents over 180 million dwt and 3,500 ocean-going vessels. But the fleet is not just growing, it is being reorganised and modernised very quickly, with annual newbuildings worth US$7 billion and second-hand purchases running at US$5.2 billion.'
Source:, 3 Jun 04

Expanding Greek fleet is engaged in consolidation process
---The Greek-controlled fleet is growing at an unprecedented rate and so is the consolidation process within Greek shipping. With the orderbook now topping 370 ships of 32m dwt, the growth is set to continue, while the consolidation process is clearly evident when we look at the largest Greek fleets.
At the beginning of May, 46 Greek operators ran fleets of over 1m dwt. This is the highest ever number, and two companies more than at the same time last year according to a Naftiliaki/Newsfront study of Greece's largest fleets. Between them, these 46 operators control 109.36m dwt, which is up 17m dwt on the same time in 2003, and accounts for almost 70% of the Greek-controlled active trading capacity.
The 1,163 ships they manage (118 ships more than in 2003) represents 37.3% of the overall Greek fleet - 3% more than 12 months ago. Mid-2001 there were 39 'tonne millionaires', operating 88m dwt and just over 1,000 ships, 55.3% of the then total tonnage and 29.8% of the ships.
However, a study by Petrofin SA, also published in Naftiliaki reveals there were 733 Greekbased shipmanagement companies at the beginning of 2004, four more than at the same time 12 months earlier, but 193 companies fewer than in 1998. Thus, says Ted Petropoulos, md of Petrofin, "there is a continuous long-term downward trend, as economies of scale, market conditions and the increasing regulatory environment dictate fewer companies but companies of a larger size".
Petropoulos says this is in line with the ongoing globalisation process and increased concentration, as Greek companies "develop larger fleets in their quest for enhanced efficiency". He says it should be pointed out that the process towards fewer operating companies is influenced by the shipping cycle, for "at times of a shipping slump, the process accelerates and at times of boom the process slows down".
Some 36 of the 'tonne millionaires' are engaged in newbuilding programmes and 29 of them have fleets of 20 ships or more.
Greece's largest operator today is Kristen Navigation, the tanker arm of John Angelicoussis and his brother-in-law Christos Kanellakis. This company has just under 6m dwt and moves above the expansive Tsakos Group 5.75m dwt and General Maritime, 5.45m dwt which topped the group in 2003 following its purchase of the Metrostar Management fleet. Dynacom/George Procopiou also tops 5m dwt. Five other companies run over 3m dwt.
Longtime largest Greek operator, Ceres Hellenic Enterprises is now ninth on the ladder of operators with a fleet of just on 3m dwt. The Peter Livanos-controlled Ceres group has slipped some 2.7m dwt, and a dozen ships under a re-focus of the business which saw VLCCs, being replaced by suezmax tankers newbuildings.
Both Kristen and the Tsakos group's Tsakos Energy Naviagtion and Tsakos Shipping & Trading have added to their fleets as tanker newbuildings are delivered and VLs bought secondhand. Further, the Angelicoussis bulker operation Anangel Shipping is on the list (19) with 2.34m dwt and 24 ships, while brother-in-law Christos Kanellakis has 1.82m dwt and 16 bulkers and is 28 on the list. Both ownerships have grown through Kristen.
Thenamaris Shipmanagement/Dinos Martinos, Polis Haji-Ioannou interests, Eastern Mediterranean/Thanassis Martinos, Polembros/A&S Polemis and Livanos all have fleets over 3m dwt and remain more or less static in numbers though there have been changes in the make-up of all these fleets.
Three of Greek shipping's best known names and long-time members of the 'tonne millionaires' club, Basil Papachristidis, the Niarchos group and P. Goulandris are among the five companies to slip out of the group. There are seven newcomers, including Metrostar, who under Theodore Angelopoulos has made a quick return since selling his 19-ship fleet to Genmar. Metrostar comes back at number 29 (1.733mdwt/nine ships) and is set to expand as new ships are delivered. Angelopoulos re-joins his brother Constantine who has 1.5m dwt, in the list.
While the Niarchos family has made it clear the risks involved with shipping are too great for them, it will be interesting to see what shape the Papachristidis operation takes. "We are investigating certain projects and will invest back in shipping," said Hellespont executive, Spyros Vlassopoulos in April as he confirmed Hellespont's four ULCC newbuildings were being sold for a huge $100m profit. Stelmar Shipping also seems to be moving closer to reaching a deal which will see the Athens-based company merged with US-based operator OMI Corp. Stelmar has 36 ships fleet of 2m dwt.
Largest bulk ship operator on the list is Transmed/Mylonas, which is number 12 with 21 bulkers of 2.77m dwt. Transmed's George Laou has confirmed the company is building a new fleet of capesize and panamax bulkers involving a total 2.7m dwt and 22 ships. Other major bulk operators are Veniamis/Gabriel, 27 bulkers of some 2.5m dwt and the Diamantis Diamantidis-run Marmaras Navigation which has been taking delivery of newbuildings for the past 30 months.
After once running a fleet of some 45 units, selling and scrapping saw the number reduced to 30 ships of 2.15m dwt in 2002. Now the fleet stands at 41 ships of 2.75m dwt Diamantidis has also turned his attention to tankers and has invested some $380m in six aframaxes and three suezmaxes at Hyundai Sahmo for delivery 2005/06.
Container ship operators, Costamare Shipping/Vassilis Constantakopoulos and Danaos Shipping/John Coustas also continue to expand their fleets. Both have ordered huge 8,200teu-plus ships in South Korea, embellishing already existing newbuilding programmes. The 50-ship Costamare fleet now tops 2.1m dwt and 154,000teu capacity, while the Danaos fleet of 24 boxships and seven bulkers stands at 1.86m dwt.
Source:, 4 Jun 04

OMI + STELMAR: why Marine Money believes it's a done deal
1) Stelmar hired Morgan Stanley & Jefferies&Company to evaluate OMI's offer and make a recommendation on value.
Marine Money View:
We think the fact that this took 11 days is significant. In an environment where decisions are made by committee and there are loads of complex histories and relationships, evaluation of an offer like this takes some time, perhaps even more time in Greece this spring. Moreover, we are not surprised that Stelmar has not engaged OMI in a dialogue yet because their advisors are still evaluating the legal and economic implications of the proposed transaction before making a recommendation. Talking to OMI without advisors is like the accused talking to a prosecutor without a lawyer - anything you say can and will be used. The use of Jefferies is interesting because they represented OMI in 2002 when the company made its first approach to Stelmar.
2) Stelmar passed bye-laws that limit the ability of a 10% shareholder to call an extraordinary meeting
Marine Money View:
This one is very serious and potentially extremely damaging. It is serious for SJH shareholders and it is serious for what Marine Money and many of the public companies have been trying to help this industry achieve for 15 years. By taking this action Stelmar's board has stripped away the rights of the major shareholders who might have the power to push the consummation of a transaction. The shareholders of these "peer" companies overlap significantly, which makes this scenario more complex. Neuberger Berman owns 11% of Stelmar and Fidelity owns 10% while Hotchkiss owns 4.5% and Royce owns 4%. Fidelity also owns 7% of OMI. The key point here is that when the votes of these major Stelmar shareholders are combined with the 26% controlled by the Haji-Ioannou family, which has entered into a standstill and support agreement, it exceeds 50%. Now, however, Stelmar's board has taken much of their power away.
3) OMI said their offer will expire on June 9, 2004
Marine Money View:
We think this was interesting in that it set a "drop dead" date after which this offer will go away and Stelmar will lose the premium. It also forces a move because Stelmar's board is now in a position where if they do not act or at least enter into a negotiation, and quickly, they will risk alienating themselves from their shareholders and possibly tarnish the way the company is valued and hurt its reputation.
4) OMI CEO Craig Stevenson sent a letter this week to Stelmar's Chairman Nick Hartley urging action.
Marine Money View:
The letter communicates the fact that OMI is impatient with Stelmar's Board, but as mentioned above we think the reality is that this is a hugely significant event that will take time. Now that Stelmar has advisors and a drop dead date, if things don't move, we expect shareholders to become more active, rather than remain frustrated as they are now. From OMI's perspective, they have been committed to this deal for a long time, so they want things to happen. With the help of Goldman and Jefferies, OMI approached Stelmar in 2002 to do a deal, but it didn't get far.
5) Stelios Haji-Ioannou, the founder of Stelmar issued a press release urging the board to take action quickly.
Marine Money View:
This is a fascinating public relations approach by Stelios that is the direct by-product of OMI's imposition of an expiration date for their offer. In his letter, Stelios claims to be talking to the Board, but is in fact talking to the shareholders. Through the letter, he is telling them he has negotiated the deal with OMI and based on all of his (and his family's) experience in shipping and deal making this is a good deal. The letter is also a warning that the expiration date creates a Clear and Present Danger as he knows that in the shipping world, offers are take it or leave it and markets move FAST.
Source: ---It has been a very significant week for OMI's attempt to acquire Stelmar. Here are the developments and what we believe they mean:

Stelios' first comments on the proposed merger between Stelmar and OMI
---Stelmar shareholder Stelios Haji-Ioannou urges Stelmar board to act quickly in its consideration of OMI's merger proposal
"Twelve years ago, I established Stelmar and took it public in 2001. In the meantime, I have created and developed a number of other successful companies, one of which, easyJet plc, is now listed on the London Stock Exchange. Throughout this time, I have never taken up salaried employment nor have I ever claimed expenses or perks. I have only worked for shareholder value. As for Stelmar, the original investment was allocated by my father to all three of his children and whilst each of us may have different portfolio strategies from time to time, we all remain long-term investors in shipping.
Since April 02, when I voluntarily stepped down from the board of Stelmar, I have spent considerable time contemplating ways in which shareholder value in Stelmar could be optimized. I carefully weighed a continuation of Stelmar's status quo as a stand-alone NYSE-listed "micro-cap" company under current management against the increased visibility in the investment community and the economies of scale that could be obtained by a combination of Stelmar with another important player in the industry. Partially based on developments at Stelmar, I recently became convinced that a combination with another shipping company would be the best solution to maximize value for Stelmar's shareholders in the long run.
During one of my recent visits to New York I discussed the shipping market in general with several investment bankers, as I often do in many industries, and a few of them suggested that I should meet the CEOs of other publicly-listed tanker companies. One such meeting was set up by Goldman Sachs with OMI. Having made it obvious that my stake was not available for sale for cash or in an exchange offer without a meaningful market premium, the discussions quickly centered on a potential business combination. Based on my conviction that a shareholder is most motivated to find a solution that optimizes shareholder value and in order to mitigate the risk of a hold-up by a procrastinating Board of Directors, I decided to drive the process myself and in short order negotiated with a number of interested parties. I am convinced that the transaction proposed by OMI constitutes a very good deal for all Stelmar shareholders.
Once I signed my agreement with OMI and OMI announced its intentions to Stelmar, I fully expected that the Board of Directors of Stelmar would proceed to appoint advisors and search for the best manner in which to create value for all shareholders. What I did not expect is that the Board would first proceed to engage in maneuvers such as its recently announced amendment of Stelmar's by-laws. These maneuvers, following the receipt of an offer, can serve no other purpose than to prevent shareholders from calling a special meeting or to seek action by written consent - rights certain Stelmar shareholders held until last Friday.
I am concerned that the actions of the Stelmar Board may cause the significant gains that the Stelmar stock has achieved since the OMI offer was announced to evaporate. Accordingly, it is my hope and expectation that the Board of Directors of Stelmar now act with all deliberate speed to seriously review the excellent opportunity for Stelmar's shareholders offered by OMI, and of course any alternatives there may be, and then act to optimize shareholder value without further delay."
Source:, posted: June 3, 2004

Greek operators use boom profits to update
---Secrecy prevails in the Greek shipping sector, but one thing's clear: no one knows better what to do with the windfall sparked by China's economic surge more than this tight-knit group. But why do the shipowners care so little about so much debt?
Greek owners are making profits beyond their most avaricious dreams and are thankful for China's economic explosion. No one knows exactly how much money they are making in this secretive sector, but Greece's central bank does provide a ballpark figure: the invisible earnings from Greek shipping for 2003 were about $9.5Bn. This would be 15% higher than the bankers' estimate for the previous year - and double the estimate of four years ago. Indications of a buoyant mood in the industry are strong. Freight rates and ship values have gone so high that the owner's happy dilemma is whether to sell his ship at a very high price or continue trading, with alluring charter earnings but also risk that the ship's value will drop if the market tanks.
The ideal is to have the best of both worlds: sell and charter back. Stelmar, Dynacom and TEN are among many companies that have done this. In general, the golden rule has prevailed: "buy when everybody sells, and sell when everybody buys." Greeks have been primarily sellers. "As buyers, they are very selective these days, making sure that the vessel they choose is tied up with the kind of time charter that will pay back the ship's premium price," says Piraeus shipbroker John Pachoulis of Megachart.
This is also a period of speculative euphoria. Brokers tell incredible stories of ships that have been sold and resold again and again, every time at a higher price, generating quick profits for the resellers. "No matter how high you put the price tag, there will always be a keen buyer," Pachoulis says. He adds that there is an unprecedented demand for second-hand tonnage. Even large companies such as Transmed, Metrostar and Golden Union, which sold some of their newbuilding contracts at profit, cannot resist indulging in asset play. Bank financing for such deals is in great supply. Dimitris Anagnostopoulos, head of shipping at ABN-AMRO Bank Greece, indicates that the good freight market has attracted more lending institutions to compete for business. Contributing to this is a perception by banks these days that shipping is no longer a high-risk industry. "The bank competition has created an owners' market where shipowners can command more flexible terms," Anagnostopoulos explains. Financing a second-hand purchase with today's prices at unrealistically high levels means a higher risk for the bank, yet lending criteria and terms remain the same.
"A bank with a long presence in shipping does not revise its policy according to the market's fluctuation," Anagnostopoulos remarks, adding that an "intelligent" bank follows a consistent commitment to the industry through well-thought-out, counter-cyclical behaviour.
Few reducing bank debt
Owners' income has increased considerably these days, so it might seem prudent for them to reduce their bank debt now to alleviate the pay-back stress when the good days wind down. But very few are taking such steps, according to Anagnostopoulos. Most prefer the 'dividend' method taking liquidity out of the balance sheet. Anagnostopoulos believes that the market's next downturn will be a test for creditworthiness. "Will owners inject funds back to their balance sheet to support deficits?" he wonders. China's booming economy has been a blessing for Greek shipowners, but it has introduced problems for other people in the sector.
Shipping shift to East Asia
Piraeus bunker trader and IBIA chairman Nick Ladis attributes a fall in the volume of bunker fuels sold in Piraeus - from 3.9M metric tonnes in 2002 to about 3M in 2003 - to the shift of shipping traffic to the area of action in East Asia. Local ship repairers also blame China for steel's shortage and its price spike.
Apart from making Greek owners rich, the extravagant market is bound to benefit the nationally controlled fleet. Lloyd's Register-Fairplay figures indicate that the average age of the Greek-owned vessels this March stood at 16.8 years (down from 20.3 years in 2000), and of those flying the Greek flag at 12.7 years.
Greek-flag oil tankers have a very youthful average age of 6.5 years. The Greeks have been leading in newbuilding orders, with 293 ships in May, and dominate the S&P market, mostly getting rid of old tonnage. Add to this the impact of the phasing out of single-hull tankers and the result will be if not a larger fleet, certainly a younger one. That will change the once-strong reputation of Greeks as operators of rusty old tonnage.
Freight boom a boon to Greece
CONTROL of one-quarter of the world's dry bulk tonnage makes Greece's shipowners the biggest beneficiaries of the extended freight market boom that continues worldwide. Greek local tanker owners are also enjoying good earnings. However, exactly how much money flows into the secretive shipowning community can only be estimated. Discounting a handful of publicly traded companies, the 700-plus offices in Athens and Piraeus that operate oceangoing ships are family businesses and do not release results.
Source: Feature, Fairplay International Shipping Weekly 03 Jun 2004

Friendly end to shipyard suit?
---The German shipyard HDW, owners of Hellenic Shipyards, Greece's largest shipbuilding company located at Skaramangas, west of Athens, announced yesterday they were willing to drop a suit lodged on Wednesday against the previous owners, if a friendly settlement could be reached.
Board Chairman Helmut Burmester told a press conference that shareholders were seeking "an agreement through negotiations."
A day earlier, the shipyard owners had sued the former owners in order to avoid paying over 150 million euros as penalty for late deliveries of ships and rolling stock to Strintzis Lines and Hellenic Railways (OSE) respectively, claiming they had not been informed of the contracts and their stipulations during negotiations two years ago over the purchase of the company.
Burmester said yesterday that the owners had gone to the courts for purely legal reasons, since the shareholders' right to seek compensation arising from the sales contracts was to expire on June 1, 2004.
Formally, the suit was against Piraeus Bank which, since the shipyard's sale in 2002, has taken over formerly state-owned ETBA Bank, Hellenic Shipyards' previous owner. In reality, the suit targeted the State.
Burmester claimed that ETBA had given guarantees that the contracts would be fulfilled, and that there had been guarantees regarding the rolling stock for Hellenic Railways from former Economy Minister Nikos Christodoulakis and former Development Minister Akis Tsochadzopoulos.
Sources at Piraeus Bank reiterated yesterday that the issue was of "no concern" to it and that Burmester's reference to "contractual obligations" were due to "complete ignorance of the terms of the contract."
Source:, 4 Jun 04

Greek prime minister will open Posidonia
---GREECE'S Prime Minister Costas Karamanlis is to open the 19th Posidonia exhibition at a ribbon cutting ceremony in Piraeus on Monday evening, announced the event's chairman, Themis Vokos, at the launch press conference yesterday.
Mr Vokos said the record figures claimed for this Posidonia "reflect the impressive renewal and modernisation drive that the Greek fleet is currently undergoing".
David Moorhouse, executive chairman of Lloyd's Register, called the event "without doubt the most prestigious shipping exhibition in the world".
Lloyd's Register is sponsoring today's Posidonia Cup yacht race, boasting 40 entries, which Mr Moorhouse said was "a great way to start Posidonia".
He added that the class society was mindful that its sponsorship was also assisting the Hellenic Offshore Racing Club, whose educational and training programme helped underpin sailing in Greece.
"Sailing is a skill that must not be lost," Mr Moorhouse commented.
Union of Greek Shipowners' president Nicos Efthymiou looked forward to a "hard but enjoyable week" which would reinforce Piraeus' status as "the centre of shipping, not only for Greeks but for others who want to come here to do business".
He said that Greek shipping was in strong shape but called for efforts to attract more ships to the Greek flag, which is currently used by only one in four Greek-owned vessels.
Source: Lloyd's List, by Nigel Lowry in Athens,Friday June 04 2004

Posidonia 2004 General Information
POSIDONIA CUP : Friday 4 June 2004
Venue : Faliron Bay - Piraeus
Venue: Attica Football Club, Voula
POSIDONIA MARITIME POLICY FORUM : Monday 7 June 2004 - 09.00 hrs
Venue : Eugenides Foundation Conference Hall
Participation by invitation only
EXHIBITION OPENING CEREMONY : Monday 7 June 2004 - 18.30 hrs
Venue : Piraeus Exhibition Center
(Entrance by special invitation only)
Opening Hours : Tuesday 8 June 11.00-19.00
Wednesday 9 June 11.00-19.00
Thursday 10 June 11.00-19.00
Friday 11 June 11.00-17.00
Admission to the Exhibition : Admission to the exhibition is free to all those involved in the sea transportation industry. To receive your visitors pass please register on-line or register at the Exhibition entrance.
Posidonia 2004 is the nineteenth biennual International Shipping Exhibition. In the last Posidonia 1,630 exhibiting companies from 79 countries participated and more than 16,000 visitors from Greece and other countries were recorded. The span of exhibited products and services covered every aspect of the shipping industry. In Posidonia 2004 the number of visitors is expected to exceed that of 2002 and furthermore, new products and services will be introduced.
Posidonia 2004 is organized under the auspices of the Greek Ministry of Mercantile Marine, the Ministry of Aegean and Island Policy, the Municipality of Piraeus, the Hellenic Chamber of Shipping, the Union of Greek Shipowners, the Greek Shipping Co-operation Committee of London and numerous others related associations.
We would strongly suggest that visitors intending to visit the exhibition arrange their accommodation the soonest possible as most hotels in Athens, Piraeus and the suburbs are usually fully booked during the Posidonia period.
Source:, Jun 04