Greek Shipping News Cuts
Week 30 - 2004


Main port of Piraeus closed for security cable installation

---ATHENS, Greece -- Athens' main port was sealed for two hours Tuesday to allow divers to install an underwater monitoring system as part of an Olympic security network that protesters contend is a privacy invasion.
The fiber-optic cables are a key element of an electronic web of cameras, sensors and other intelligence-gathering devices designed to help safeguard the Aug. 13-29 Olympics. Greece is spending $1.24 billion on Olympic security.
Although the devices are considered necessary for security, several groups said they will demonstrate against their use. Anti-globalization groups said they would protest outside Greece's parliament. Some political parties also have expressed concerns.
Police officials Tuesday tried to reassure Athenians that the electronic monitoring system, which includes a blimp and thousands of infrared and high-resolution cameras, will not violate privacy.
The 200-foot blimp, which carries chemical "sniffers" and high resolution cameras, will start flying over the city this week, police said.
"The security measures are being implemented with complete respect for human rights and according to the guidelines set out by the agency responsible for privacy and data protection," police spokesman Lefteris Ikonomou said.
Groups opposed to the security measures, including a group called Campaign Anti-2004, said Tuesday at police headquarters that they would demonstrate in protest outside parliament.
"For us the Olympic Games are not welcome. The culture of the Olympic Games is not ours," the groups said in a statement.
The underwater cables at the port of Piraeus will help secure an area that will host one of the world's largest gatherings of cruise ships during the Olympics.
About 15,000 visitors, state officials and dignitaries will be housed aboard at least eight cruise ships -- including the world's largest passenger ship, the Queen Mary 2. A number of luxury yachts also are expected.
High-tech systems also will be used at Athens' airport, where workers at the main operations center will be subject to retinal scans. (AP NEWS, The Associated Press News Service)
Source:, July 20, 2004

Agents say Piraeus "is now moving in the right direction"
---Greece's ship agents have expressed satisfaction with the progress being made by the new management of the Piraeus Port Authority (OLP). In the past agents have been highly critical of the managers of the country's leading port, but in a statement July 21 the agents' body, the International Maritime Union in Greece (IMU) said the port "is now moving in the right direction".
In May, the IMU was warning it was time for tough decisions, claiming that "for too long the political cost involved" has been the prime consideration when port industry decisions are made, a policy they said that will "condemn the port of Piraeus and will see it lose out to the competition".
Now the IMU says its members see "an improvement in the productivity at the container terminal" and that great efforts are being made "to secure the smoothe commercial flow within the Piraeus port". The IMU says that on the admission of OLP's management there are problems in the port's operation which "unfortunately justified the position of our union" and the tough proposals made by it to rectify the situation.
"If the new management adopts even some of the measures we have proposed, the negative image towards the port will soon change and port services will be improved further," said the IMU.
Source:, 23 July 2004 Vol. 5 / No. 29----Text Filed: 2004-07-19

On the crest of a wave?
---Things have been so good in the bulk-shipping market that it is hard to believe they can stay that way
BY THE pool, overlooking the wine-dark waters of the Aegean, the champagne flowed as the cream of the world's shipping industry gathered to watch the fireworks at one of many lavish parties thrown during Posidonia, a recent trade show. Thanks to the greatest boom the industry has seen since the closure of the Suez Canal in 1967, the mood was buoyant. But strong winds blew ash from the fireworks on to the guests, driving the many women in low-cut dresses to shelter under the jackets of obliging males.
No sooner was the party over than it seemed that the industry itself might have to run for cover, as the price bubble that had seen bulk-shipping rates more than double since September 2003 suddenly lost air. Fears of a slowdown in China's economy, and a temporary ban on its imports of soya from Brazil, halved the Baltic dry-cargo index, which covers bulk-cargo rates on the world's 23 busiest sea routes. Rates have since recovered somewhat (see chart), but worries abound that a more fundamental correction in rates may be coming soon.
According to Martin Stopford, an economist with Clarksons, the world's largest shipbroker, the secret of the Greek success is not, as you might expect, that Greeks are good at running ships. They leave the grind of finding cargoes to specialists: they excel, instead, at managing risk. The Greek shipping fortunes are based on buying ships cheaply and selling them dear. They have an impressive record of spotting the tops and bottoms of the market.
Foolishness to the Greeks
That is in sharp contrast to certain other perennial investors in shipping: on the waterfront of Piraeus, where owners and their agents mingle, they say that, while God gave the Saudi Arabians oil, he fortunately gave the Greeks the Norwegians. Needless to say, Norwegians disagree. After all, the world's largest tanker owner is a Norwegian company. Nor is it just Norwegians who are the fall guys. The price of second-hand bulk carriers started to fall this spring as freight rates declined, catching out some firms. On July 21st, Jinhui, a Chinese shipping company listed in, er, Oslo, issued a profit warning for precisely that reason.
The past few years have also seen the emergence of the publicly-traded Greek shipping company, an idea that would have been anathema to the likes of Onassis and Niarchos, who had little time for the transparency or accountability involved in being public. It is still a comparatively limited phenomenon, but it involves some big companies. For instance, Tsakos Energy Navigation (TEN), a subsidiary of the second-largest Greek shipowning firm, is listed on the New York Stock Exchange.
Mr Haji-Ioannou, who with his family owns 27% of Stelmar, is attacking its board for not letting shareholders consider a couple of takeover approaches. One is from OMI, an American shipping firm listed in New York; the other is from the GEM group, owned by the Greek Restis family and rumoured to be seeking a listing in New York. Argonaftis, the first shipping firm to float on the Athens stock exchange, announced in February that it would also get a New York listing.
One side-effect of the increase in transparency has been to attract more outside investors into the industry. Traditionally, shipping finance came from plain vanilla bank loans, secured against ships. Bankers such as Royal Bank of Scotland are still prominent on the Piraeus waterfront, but new sources of finance are emerging. Financial instruments, such as asset-backed securities, are increasingly popular, especially in Germany, where investors (chasing a local tax break) have a lamentable habit of entering a market just as it becomes a bubble. According to Lloyd's Shipping Economist, such new sources now account for 60% of global ship-financing.
Source: From The Economist print edition, Jul 22nd 2004 | ATHENS AND LONDON

Owner alarm over IACS bulker rules
---Standards not high enough, write Nigel Lowry and Hugh O'Mahony- Friday July 23 2004
INDUSTRY fears are starting to emerge that draft common structural rules for tankers and bulkers, first presented by the International Association of Classification Societies barely a month ago, may not be good enough.
First to air its concerns publicly is the London-based Greek Shipping Co-operation Committee, which has praised IACS for entering a dialogue with the industry but questioned whether safety margins embodied in the proposals are high enough.
"We fear that the proposed rules would not result in the construction of robust vessels which are fit for their expected 25-year life span and would consequently not meet the goal of raising standards," said committee chairman Epaminondas Embiricos.
The GSCC said it was particularly concerned in respect to the proposed Joint Bulker Project rules.
These, it claimed, "appear, in several respects, to amount to a lower standard than the current requirements of several of the leading IACS member societies".
Mr Embiricos said the Committee was "extremely concerned" that the draft tanker and bulker rules have incorporated "significantly reduced corrosion allowances, to the extent of up to 50% reductions" from existing standards.
"If adopted, these reduced corrosion allowances, would inevitably result in steel renewals becoming necessary much earlier in a vessel's life and would increase the risk of casualties due to structural failure", warned the GSCC.
The London based think-tank said its view was that the common rules should result in "safe, durable and robust ships".
Other London shipping sources yesterday agreed that the corrosion margins could be a cause for concern, but said that it was too early to draw conclusions from information received.
IACS had yet to make available its comparative studies of designs under the old and new rules, the sources said.
Under the old rules, the corrosion margin is given as a percentage figure of steel plate thickness, but the new rules give an absolute millimetre figure corrosion margin, the very thing owners asked IACS to deliver.
It is understood that internal discussions at the International Chamber of Shipping have focused on the fact that, in some cases, this could mean a lower corrosion margin than before.
Under the old rules, for example, a 20 mm plate has a corrosion margin of 20%, equivalent to 4 mm. On reaching 16 mm thickness, it is due replacement.
Under the new rules, the corrosion margin is simply 2.5 mm, so a plate would have to be replaced when it got to 17.5 mm thickness.
However, according to an ICS source, this does not necessarily mean plate replaced more often, or less robust ships, because IACS has also told shipowners that it concluded from its own records that, in some areas, ships had not corroded as quickly as had been anticipated.
Under the new rules, the critical corrosion margin is not 2.5 mm at all, but one termed t2.5yrs, denoting a 0.5 mm corrosion margin. Plate would need to be replaced at this point because 0.5 mm was deemed to be the corrosion margin that would last 2.5 years - or the time until the next survey was due.
The comparative design data is also deemed critical because the common rules are newly subject to harmonised fatigue analysis and finite element analysis, through which structures should be more robust than before. The ICS source said that shipowners were thus reserving their position until it had seen the comparative data. The matter would be would discussed on August 25th.
Source: Lloyd's List, Friday July 23 2004

Shipping narrows C/A deficit
---Current account improvement over first five months due to transport services receipts and EU funds.
The current account deficit narrowed considerably over the first five months of the year, notably thanks to the contribution of receipts from transportation services, mainly from the shipping sector.
The current account deficit for January-May 2004 stood at about 4.04 billion euros, down from 5.07 billion during the same period in 2003 and 4.46 billion in 2002.
"This development mainly reflects a substantial rise in the services surplus and, to a lesser extent, an appreciable increase in the transfers surplus, which, together, more than offset the widening of the trade deficit and the income account deficit," the Bank of Greece, which released the figures, said in a statement yesterday.
The services surplus increased to just over 4 billion euros in the first five months of 2004, from 2.62 billion in 2003 and 2.29 billion in 2002. "The (improvement was) a result of a rise in net transport - mainly shipping - receipts and, secondarily, an increase in net travel receipts," the Bank of Greece said.
The transfers surplus widened to 3.14 billion euros, from 2.77 billion in the first half of 2003, mainly thanks to a significant increase in net transfers from the European Union. This transfer of funds, mostly for infrastructure projects funded by the Third Community Support Framework (CSFIII) took place mainly in February, but came too late to benefit the previous Socialist government, long criticized for the low absorption rate of EU funds, which was defeated at the March 7 polls.
The trade deficit in the first five months of the year stood at 10.08 billion euros, up from 9.42 billion during the same period in 2003 and 9.37 billion in 2002. The growth "reflects a 1.30-billion-euro, or 11.4 percent, increase in the non-oil import bill, which more than offset both a 477-million-euro (12.2 percent) rise in non-oil export receipts and a 160-million-euro decrease in the net oil import bill," the Bank of Greece said.
For the month of May alone, the current account deficit narrowed to 681 million euros, compared to 738 million in May 2003 and 741.3 million in May 2002. Again, this was due to the widening of the services surplus outweighing the bigger trade and income account deficits. During this month, the transfers surplus narrowed because transfers from the EU declined.
Source:, 23 jul 04

Financial account balance
In January-May 2004, a net inflow of 439 million euros was observed under direct investment, which mainly reflects the acquisition of mobile telecommunications firm Panafon by parent company Vodafone in January and the acquisition of a controlling stake in the General Bank of Greece by Societe Generale in March. Over the same period, a substantial net inflow of 5.68 billion euros was recorded under portfolio investment, mainly reflecting non-residents' purchases of Greek government bonds, which more than offset the corresponding outflows by residents to foreign bonds.
Finally, a net outflow of 2.61 billion euros under "other investment" is largely associated with residents' (mainly credit institutions') sizable outflows to deposits and repos abroad and, to a lesser extent, outflows for the repayment of loans granted by non-residents.
At end-May 2004, Greece's reserve assets were 3.4 billion euros.
Balance of payments data for June 2004 will be released on August 18.
Source: ---In May 2004, a small net outflow was observed under direct investment. Under portfolio investment, a net outflow of 3.042 billion euros mainly reflects residents' increased purchases of bonds - whether Treasury or corporate - issued in other countries. Finally, regarding "other investment," a net inflow of 4.02 billion euros largely reflects a decrease in residents' (credit institutions') deposits and repos abroad, as well as an increase in non-residents' deposits and repos in Greece.

Ferry operators return to free competition standpoint
---The Coastal Shipowners' Association (EEA) yesterday accused the government of breaking its pre-election promises, saying that the 3.5 percent rise recently approved for fares in the ferry economy class "constitutes a mockery for the sector and does not bind the members of EEA, who are entitled to freely determine their fares depending on vessels' operating costs and the peculiarities of the routes they serve." EEA said the "attempted regulation of fares is an impermissible continuation of state interventionist policies in fully private enterprises." EEA President Stelios Sarris said members remained true to their standpoint of unadulterated competition but also recognized their social role in ensuring adequate sea transport communications. "Deregulation does not necessarily mean fare increases."
Source: Kathimerini Daily, 24 Jul 04

Greeks eye tanker operator
---ONE of Greece's biggest family-owned shipping companies has made a takeover approach for Stelmar Shipping, the oil tanker operator set up by Stelios Haji-Ioannou, the easyJet founder.
Golden Energy Management, part of the Restis shipping group, has written to Stelmar and Mr Haji-Ioannou, its biggest shareholder, to inform them of its interest.
Victor Restis's letter, on behalf of Golden Energy, did not reveal an indicative bid price nor details of the merger proposal. It is thought that Athens-based Golden Energy wants to use Stelmar as a vehicle to list on the NYSE.
Mr Restis said Golden Energy would control the merged group and he urged Stelmar's board to open talks with him.
Golden Energy's approach comes only a month after Stelmar rejected a $653.8 million unsolicited bid from OMI, a New York-listed rival.
The OMI offer had been instigated by Mr Haji-Ioannou, who has lost confidence in Stelmar's board, led by Nick Hartley, and accused directors of not representing shareholders' interests.
OMI's offer valued Stelmar at about $40 a share. Last night, Stelmar's shares were trading at $33.66.
Neither Mr Restis nor Stelmar could not be reached for comment last night
Source:, Jul 19, 2004

Stamatis Restis dies
---JUST as the group he founded was making a bid for Stelmar, the 64-year old founder of the Restis shipping operation, Stamatis Restis, collapsed and died at his home in Athens.
Mr Restis set up Enterprises Shipping and Trading which has diversified in recent years from being mainly a reefer ship operator. Mr Stamatis's son Victor is expected to take over the group.
Source:, Tuesday, 20 July 2004

DZ Bank makes $1 million on Top Tankers IPO
---Marking Anthony Argyropoulos' first shipping IPO, DZ Bank has earned a $1 million fee for its advisory work on Top Tankers.
Bank of Scotland in L+100bps loan for Top Tankers
By way of review, Top will acquire 10 1991-1992 built tankers from Sovkomflot for $251.2 million, of which approximately $144 million was intended to come from the equity offering and the remaining $107.3 million will come from a new facility with Royal Bank of Scotland. The balance of the new $197 million RBS facility, which bears interest at LIBOR + 100, will be used to refinance 6 of the company's other 7 vessels.
Top's strategy is to generate enough free cash to pay a 7% dividend by putting 10 of its to-be-acquired Handymax tankers under two-year time charter contracts that include profit sharing arrangements - though this is a bit more complex than usual. Under Top's rather unusual profit sharing provision on 4 of the ships, the Company will receive, on a quarterly basis, the first $500 per day that the charterer generated with the vessel in excess of the base contract price and 50% of the excess thereafter. As for the other 6 ships, the time charter has a base contract rate of $14,250 per day plus the Company will receive, on a quarterly basis, the first $250 per day that the charterer generated with the vessel in excess of the base contract price and 50% of the excess thereafter. BUT there are strings attached. On all 10 ships, Top will have to reconcile with the charterer and may have to return a portion of the proceeds received under the profit sharing provision at the conclusion of the time charter contract based on the actual rate generated by the vessel during the complete duration of the time charter contract. So there is a potential liability looming 2 years from now.
Moreover, in order to be able to make the dividend payments, Top must be in compliance with the Royal Bank of Scotland covenants. For example, the new credit facility will contain financial covenants requiring that the aggregate value of the mortgaged vessels at all times must exceed 130% of the aggregate outstanding principal amount under the new credit facility; Top must maintain minimum cash balances with the lender in the amount of $10 million on a monthly average basis and $5 million at all times; Top must ensure that total assets minus debt will not at any time be less than $150 million and will at all times exceed a ratio of 35% and the company must ensure that EBITDA will at all times exceed 120% of the aggregate of interest expenses and debt due at a particular period; and meet minimum working capital requirements
No matter what you think of this deal, it's important to separate the issues here. First off, Top Tankers isn't Teekay. The company will emerge from this offering as the smallest of the public companies, with the oldest fleet and the largest shareholder taking approximately $13 million out of the company. But what has impressed us about this deal is the fact that Pistiolis has endured the grueling offering process, found a team of underwriters to execute and structured a marketable deal that achieved his stated objectives. Now it is up to him and his team to deliver value to shareholders. Congratulations and good luck!!
Source:, Freshly Minted Weekly, 22 Jul 04