Greek Shipping News Cuts
Week 46 - 2004


Slowdown, but Greek orderbook still tops 350 ships

---Though very few newbuilding contracts have been signed by Greek owners in the past two months, Greek interests continue to be the top clients of shipbuilders in the Far East. Indeed, research carried out by Newsfront found that at the beginning of this month Greek interests had around 350 ships on order of over 31m dwt.
Further, scores of options are held and there is a steady flow of newbuildings into Greek ownership as ships previously ordered are commissioned. Many are running up the Greek flag.
The only major new contract to emerge in the past two months was the firming up of the long discussed Papachristidis/Hellespont project to build a series of six 73,000dwt tankers in New Century Shipyard, in China. The double-hull ships are reportedly costing $40m each and will deliver into seven-year Sanko charters in 2006 and 2007. Other contracts involved expanding existing building programmes, most notably Transmed Shipping ordering an eighth double-hull capesize bulker at Bohai Shipyard in China.
Trying to discover why there have been so few confirmed ship orders from Greek owners it was soon confirmed that the lack of slots was the problem. However, it also became evident orderbooks at principal yards in the Far East are full until 2008 because ships are not being delivered as quickly as would be liked because of the shortage of equipment to go on the newbuildings.
Indeed, the lack of equipment has become a major headache. Engine builders in particular are struggling to meet the demand from shipbuilders for plants to power the thousands of ships now on order. In fact, the demand for large two-stroke low speed engines is such that the inability to delivery is just as big a factor in the shortage of newbuilding berths as are the ship contracts themselves.
One leading Greek owner building in Japan has been forced to change engine builders because a licensee in Japan could not deliver the plant contracted on time. The problem is such that a party of engine builders from Korea recently made a visit to Russia looking for crankshafts and small parts."Engine builders have been caught and capacity is being expanded in Japan and Korea, but this cannot be done overnight," admitted Ole Schnohr, md MAN B&W Hellas, which has the lion's share of the Greek market.
Orders for LNG ships is also a factor. There are presently around 90 LNG ships contracted and these $150m units are of great interest to shipbuilders. They also have a long building time, again occupying berth space. South Korean yards have some 55 LNGs contracted, while the Japanese have around 20 ships. China has now entered the market and holds five orders, with Spain's IZAR and France's Alstom Chantiers Atlantique also building these ships.
Still, while the flow of orders may have dried up for the time being, some 80 Greek companies do have ships on order, accounting for around 18.4% of the world orderbook in terms of tonnage and over 10% in terms of ships. The range of ships under construction is vast, though energy carriers account for over 63% of them, of which 150 are crude tankers and nine are gas carriers with the latter an area of growing interest.
As the cost of many of the contracts is kept under wraps, brokers believe the investment in newbuildings at this time is in excess of $14bn. And that is the contracted price. Looking at the prices ships being re-sold off the building berths are now fetching the asset value of orders is far higher.
Source: Newsfront Greek, Issue nr. 42 (12 November 2004)

Dry woos investors
---Bulkers are coming out of the sideline, taking their place on the public stage.
Tanker companies have already proved their appeal to a red-hot public equity market in the US. Now several dry-bulk companies are poised to learn whether they can play the game in a significant way for the first time.
Greek bulker operator Pacific & Atlantic (P&A) is among the latest companies to investigate a public offering, boss Nicolas Pateras confirms this week.
He joins such would-be issuers as George Economou and Eastwind Maritime, both with fully or mostly dry-sector fleets. And already public bulker operator Excel Maritime filed a $200m shelf registration last week allowing it to chase both equity and debt issues.
"For the dry owners, if not now, when," said one finance man. "This is it. If they can't sell stock in this market, they can't sell stock."
Yet there is an emerging disconnection between investors who have snapped up recent issues by companies like Arlington Tankers and Top Tankers and financial professionals who worry they are ignoring inflated vessel values and the prospects of a dive in hire rates in late-2005 (see story below). A similar rift could emerge on the dry side.
Pateras confirms he has been in discussions for more than three months but says the company has faced delays in its plans to launch an initial public offering (IPO).
Like Economou, Pateras was among the wave of high-yield bond issuers in the late 1990s that encountered financial trouble and entered restructuring talks with their bondholders.
P&A brought in $128m in 1998 but was in negotiations by the following year and concluded a restructuring by February 2000. The talks were said to have left the two sides on relatively good terms. A small percentage of the original holders, including underwriter Morgan Stanley, have not yet agreed to switch their debt to equity.
"We would like to do an IPO that would also include the bond ships," Pateras said.
Pateras does not want to press ahead without a bondholder agreement because he would like to continue using the P&A name.
Pateras is also among the bidders for Malaysia International Shipping Corp's 32-vessel bulker fleet. While he has offered $670m for the whole fleet, sources have told TradeWinds he also offered $275m for just the Malaysian company's nine panamaxes, built between 1993 and 1999.
The size of any P&A offering appears to hinge on whether Pateras is successful in winning part or all of that fleet.
Economou, meanwhile, is proceeding with plans for a pure-play bulker offering under the Dryship banner. His focus is said to be on panamax and perhaps capesize tonnage.
Economou also led a failed junk-bond company, Alpha Shipping, which restructured its notes at a steep discount.
New York-based Eastwind Maritime is known to have been working on its flotation since at least June. But New York finance sources said last week that the company appears to be dealing with regulatory housekeeping issues and is "at least" several weeks away from an offering.
Eastwind has a mixed fleet dominated by reefer ships and bulkers. Sources close to the company initially gave signals indicating they were comfortable approaching the market with that profile. But the company proceeded to buy four 1990s-built products tankers from Magnus Carriers of Greece in August, fueling speculation that it needed to "sex up" its offering with tankers.
"Investors are excited about the tanker market," one finance source said this week. "It's part of the energy market, and anything connected with energy is red hot.
"The question of the moment clearly is whether that extends to dry bulk. It doesn't have that energy link, unless you consider coal to be energy. But it's a question that is about to be answered."
Source:, Joe Brady and Gillian Whittaker, Stamford and Athens, published: 12 November 2004

Frangou on roadshow "blank check" blind pool shipping company
---This week marks a first for shipping finance in the U.S. Capital Markets. On Monday Angeliki Frangou, who was senior vice president of Good Faith Shipping (co-founded by her father Nikolaos Frangos) when the company attempted to access the U.S. high yield bond market in 1998, filed an S-1 with the SEC detailing her plans to bring to market an entity called International Shipping Enterprises, Inc. (ISE).
ISE, which plans to raise $102 million through the sale of 17 million units (comprised of one common share and two warrants each), is a "blank check company," which means the company is raising the money to make as yet unidentified acquisitions.
Sunrise Securities of New York, best known for its longstanding role in raising equity for Tsakos family interests, is the sole underwriter on the deal, which will initially trade on the bulletin board. It is our understanding that if and when the company makes an acquisition, they will apply to be listed on the NASDAQ. ISE's plan is to acquire dry bulk vessels that are 5-15 years old and the stated goal of the company is to consolidate the dry bulk industry and create a portfolio of spot and longer-term time charters.
ISE estimates that net proceeds from the sale of the units, after deducting offering expenses of approximately $1.5 million, of which $1 million will be paid to Sunrise in the form of "non-accountable expenses" (1% of the gross proceeds), and underwriting discounts of approximately $6.1 million ($7 million if the green shoe is exercised), will be $94.4 million. Of this amount, $92.3 million will be held in a trust account until acquisitions have been identified and the remaining $2.1 million will be used to pay the salaries and run the day-to-day operation of the company's management for up to 18 months. According to the prospectus, 80% of the shareholders must vote in favor of any acquisition that the company proposes.
ISE is currently on a roadshow and unavailable for comment, but assuming the company is successful in raising $92 million in net investible cash, it can borrow up to three times that amount on a secured basis, a substantial $276 million.
Source:, Freshly Minted, 11 Nov 04

Bureau Veritas: 9th meeting of the Hellenic Marine Technical Committee
---The Hellenic Marine Technical Committee held it's 9th meeting on the 21st of October 2004 at the Yacht Club of Greece under the chairmanship of Mr. A. Faraklas, Managing Director of Chartworld Shipping Corp. and the top management of Bureau Veritas Piraeus, namely Mr. Didier Bouttier, Regional Chief Executive for Hellenic & Black Sea Region, Mr. L. Chahalis, Marine Department Manager for Greece and Cyprus, & Mr. A. Angelopoulos, Ships in Service Operational Manager for Greece & Cyprus.
The Committee is consisted of leading Bureau Veritas personalities and of prominent Managing & Technical Directors from the Greek shipping industry.
According to Committee's regulations new members have been elected during this meeting, namely Mr. A. Ioannidis of Cardiff Marine Inc., Mr. N. Manolakis of Cyprus Maritime Co. Ltd., Mr. A. Tsirigakis of Oceanbulk Maritime S.A., and Mrs. P. Paleologou of the same company.
Following the agenda, one big issue was addressed and extensively discussed between committee members:
* IACS Common structural Rules for Bulk Carriers (detailed analysis) by Mr. Jean-Francois Segretain, Marine Regional Chief Executive France - South Europe & North America Region, Bureau Veritas Paris.
Upon the completion of the meeting a dinner was held, attended by the B.V. representatives and all Committee members.
Source: Press Release, Piraeus, 10th November 2004

Salvors conquer elements to refloat bulker
---GREEK salvage company Tsavliris has refloated the stranded bulk carrier Ken Explorer in what the company described as "one of the most difficult and protracted salvage operations carried out in the Indian Ocean in recent times", writes Sandra Speares.
Tsavliris has been working on the salvage operation under a Lloyd's Open Form contract since mid-August.
The Liberian flag, 1997 built, Ken Explorer , which is operated by Ikaros Shipping ran aground in the Gulf of Khambat while on a voyage from Chile to India. Two salvage tugs Fairplay IX and the Tsavliris-operated SB-408 were mobilised to assist the bulk carrier, which was severely damaged in the accident.
The operation was hampered by the monsoon season, and the cargo of 43,800 tonnes of copper concentrates, which liquifies if the moisture content rises, was potentially destabilising the ship.
Four cargo holds were flooded during the accident.
Tsavliris successfully removed the bunkers from the ship using a bunker vessel from the United Arab Emirates.
Two further vessels, the Patara and the Sheng Mu were mobilised to act as storage vessels, as well as a large team of personnel including three salvage masters.
Tsavliris group managing director Xenophon Constantinides described the work as "an extremely delicate and long-running salvage operation, where our team had to battle a very difficult combination of circumstances that even experienced salvors do not face every day".
Source:, Tuesday November 09 2004

Gigilinis increase fleet to 8 tugs
---Gigilinis Salvage & Towage, a well-established company in the field of towage and salvage, has recently purchased (in October 2004) the 8th motor-tug/salvage-tug of its fleet.
The newly acquired tug has been named "CAPTAIN MICHALIS" in the honour of Mr. Michalis Gigilinis, founder of Gigilinis Shipping Group and father of the company's managing director, ship-owner Mr. Alexandros Gigilinis.
M/T-S/T "CAPTAIN MICHALIS" (B.P. 48 Tons, BHP 4.200, Class ABS) will be engaged in salvage and towage operations in The Mediterranean, Black, Red and Arabian Sea, the Persian Gulf and the Atlantic Ocean.
The purchase of M/T-S/T "CAPTAIN MICHALIS" comes shortly after the purchase of the M/T-S/T "EUROPE" (B.P. 50 Tons, BHP 3530, Class HMMI), which was placed in operation in July 2004. Although "EUROPE" is classed as a "harbour tug", based in the port of Thessaloniki, it works in the same geographical areas as M/T-S/T "CAPTAIN MICHALIS".
The company is expanding steadily by renewing its fleet. It is a full member of ISU (International Salvage Union) and is accredited with an ISO 9001:2000 certification by ABS. With a fleet of eight (8) tugs, four of which are based in the port of Thessaloniki, two in the port of Kavala and the remaining two constantly engaged in towage and salvage operations worldwide, with specially trained crews, technical equipment and the most up-to-date telecommunications systems, the company is dedicated to providing efficient and professional services to its clients.
The available services include:
- Ocean salvage and towage
- Fire-fighting and control
- Pollution combat - oil spill control and clean-up operations
- Re-floating operations
- Underwater surveys
- Coastal and harbour towage at Thessaloniki and Kavala"
Gigilinis Salvage & Towage,
Source: Press release, 11 Nov 2004

Criminalisation rebels delay EU sanctions
---EU PLANS to criminalise accidental oil pollution first united the maritime industry in its opposition, but now the plans have divided member governments. Opponents cite concerns that current proposals being put forward by the European Commission exceed both Marpol and Unclos conventions. Ministers from Greece, Cyprus and Malta last week blocked the consensus position needed by governments to progress to the next stage of European Union debate.
The blocking move has won these ministers support from their national shipowners, but has sparked criticism from France, Germany, Spain and Portugal - the key EU countries that support the need for strengthening criminal sanctions by the EC.
As a result, the Dutch EU presidency has passed the issue on to the EU Council of Ministers, effectively promoting the issue to the top of the political agenda. Industry sources have also suggested that this response is a veiled attempt to put further political pressure on the three rogue member states to back down.
A protracted bureaucratic solution is now inevitable, but the tensions will simmer until the European Parliament concludes its second reading of the draft directive, which is not expected to be finalised until early next year. It remains to be seen whether the council and Parliament can then broker a compromise over the details.
With industry bodies, maritime unions and the IMO all voicing opposition to the current draft, however, changes to the legislation will need to be in line with existing international conventions to avoid major political stumbling blocks.
Source: Fairplay International Shipping Weekly 11 Nov 2004

Dimitris Talianis photographs the harbors of Greece
---Large-format, bilingual volumes profusely illustrated with color photographs devoted to aspects of Greek life, landscape or culture have become a mainstay of the Greek book market.
A recent addition to the growing array comes from Topio Publications, a pioneer in the field when it started in 1987. Showcasing the work of photographer Dimitris Talianis, Topio's list now boasts some 30 such books, as well as boxed sets including music CDs. All are on Greek subjects, most devoted to individual places - Santorini, Kasos, Patmos and Crete - or to themes, such as the seasons or olives in Greece or the cuisine of the Aegean, while others marry fine photographs to verse by eminent Greek poets: works by Elytis in "Orientations" and Seferis in "Rust and Brine."
"The Greek Harbours" is the latest in the series. Talianis brings technical skill and enthusiasm to this exhaustive record of Greek harbors great and small and the working and pleasure vessels that ply them. At times one wishes for more than strictly documentary shots that might have escaped from a shipping catalog or the conventionally pretty views that thousands of postcards have spoiled us for.
Novelist Panos Theodoridis contributed a prologue and commentary on the photographs in the kind of flowery language that can work well in Greek but poses a challenge to translators. Geoffrey Cox has made a manful effort.
A more straightforward historical overview of Greek harbors and a chapter on the art of the Greek sailor by navy captain and writer Anastasios Tzamtzis adds valuable information and context.
Source: Kathimerini Daily, 11 Nov 04, Vivienne Nilan