Greek Shipping News Cuts
Week 10 - 2005


Ministry promotes move to Lavrion, cruise shipping

---Merchant Marine Minister Manolis Kefaloyiannis made it clear that efforts must be coordinated to help cruise shipping.
The development of cruise shipping is one of the Merchant Marine Ministry's priorities, Minister Manolis Kefaloyiannis emphasized yesterday, and revealed negotiations by the Panhellenic Seamen's Federation (PNO) with investors to raise the Greek flag in six cruisers.
Kefaloyiannis said the state has to improve harbor infrastructure, and that efforts must be coordinated as cruise shipping has reached "the zero point." He further mentioned the utilization of the Lipasmata area in Piraeus, saying there are talks with the National Bank of Greece to this end. An international architectural tender will be proclaimed, he said, as the project's budget will reach 3 billion euros.
The ministry is also studying the possibility of offering incentives for coastal shipping companies to move base to Lavrion, in eastern Attica, from where the distance to Aegean islands is significantly shorter than from Piraeus. The incentives will reportedly include privileged use of the passenger terminal for the companies to shift to Lavrion first, as well as privileges that would apply to full coastal shipping liberalization, such as the free arrangement of fares and the choice of the total annual time for each route.
The Public Works Ministry is also strongly behind developing Lavrion as a jumping-off point, the minister said, for besides interventions made to the port itself, the road and railway infrastructure extending to Lavrion must also be completed as soon as possible.
Regarding coastal shipping fares, Kefaloyiannis stated there will be no increases in 2005, adding that a system is being studied that would directly link the price of fares to that of fuel. "When oil has a low price then fares will fall, while when the price of fuel goes up, so will the fares," he explained.
The ministry is also engaged in a continuing and constructive dialogue with PNO about unemployment in the sector and other issues, Kefaloyiannis said, confirming that among the government's intentions is early retirement for all seamen who still have one year of work left; their social insurance payments for this year will be covered by the ministry so that more vacancies are created.
Meanwhile the Piraeus Port Authority (OLP), listed on the Athens stock market, has agreed with construction company J&P Avax for the building of a new dock at the Eleftherios Venizelos cargo station, at a cost of 35 million euros. The project will create 350 new jobs and increase the station's capacity by 30 percent, to 5 million teu (20-foot equivalent units) per year. It will take two years to be completed and a third to install the appropriate equipment.
Source:, 11 Mar 05

Greek bulker collides with anchored Swedish tanker
---The Greek-flagged 17,065-DWT bulker "Island Gem", on route from Bilbao to Newport, collided with the anchored Swedish tanker "Bro Traveller", off Cardiff on Monday afternoon. No injuries are reported and there was no risk of pollution. According to information from British authorities, damage is restricted to a crack in the superstructure of the "Island Gem" and "Bro Traveller" sustained some damage to the fo'csle and has damaged frames. Both vessels could continue to their destinations for dishcharge and further inspections. Weather conditions were good at the time of the incident.

Captain Mangouras to be allowed to return to Greece
---ITF General Secretary David Cockroft today stated: "Like everyone else in the world of shipping we welcome the news that Captain Mangouras is being allowed to return to Greece until his trial begins."
He continued: "It's good news, a long time coming. I'm only sorry that it's taken a change of government and the huge outpouring of support for the Captain to reach this point. Perhaps, after this and the release of the Karachi Eight, governments will think twice before trying to solve their political problems by picking on seafarers.
"Unfortunately I suspect that this is a problem that all of us in the industry will have to fight all the way.
"This move is another pointer to the continued flexibility of the Spanish authorities since the election. Which is doubly welcome at a time when the EU is moving ahead with the criminalisation of accidental or non-intentional pollution."
For more information contact ITF press officer, Sam Dawson. Direct line: + 44 (0)20 7940 9260. Email: International Transport Workers' Federation - ITF: HEAD OFFICE ITF House, 49 - 60 Borough Road, London SE1 1DS Tel: + 44 (0) 20 7403 2733, Fax: + 44 (0) 20 7375 7871. Email:
Source:, 7 March 2005

Greece, Cyprus to set up joint committee on shipping
---Cyprus and Greece have decided to set up a joint committee on shipping issues and on their interstate cooperation in this field, it was announced on Tuesday.
The decision was taken during the recent official visit to Cyprus by a delegation of Greece's Merchant Marine ministry that wrapped, a press statement released in Nicosia on Tuesday said.
EU shipping policy and cooperation between Cyprus and Greece on a broad spectrum of shipping-related issues concerning were at the centre of the talks. Two delegations agreed that on an international level each country must represent itself and express its position autonomously.
In that direction, Cyprus, Greece, Malta and other EU countries have undertaken several initiatives, which aim to exclusively promote shipping at a European level and to protect professions at sea.
Cyprus Communications and Works Ministry Permanent Secretary Makis Constantinides and Greek Ministry of Merchant Shipping General Secretary Ioannis Tzoannos also looked into ways of addressing several initiatives within the EU that they believe ignore international organisations and their policies.
The Cyprus delegation also put on the table the insurance rights of Cypriots, who have worked or work in Greek-flagged ships, as well as the issue of Cypriot students studying at Greek Merchant Marine Academies. They also examined setting up a Cyprus Maritime Chamber.
Both Constantinides and Tzoannos expressed their satisfaction over the results of their contacts, underlining that they look forward to further cooperation between the two countries in merchant shipping.
Source:, Athens News Agency, Greece - Mar 8, 2005

Excel goes back to Equity Markets
---Investors in the US are hungry for dry bulk shares and Excel Maritime is serving up another round, just as Diana Shipping moves its roadshow from London to America. Having raised $52 million through a share sale to institutional investors in late 2004, sold at a steep discount to the then-current trading price, Excel Maritime is bravely heading back to the equity markets for another round. Investors took the stock down sharply when the company announced its intention to issue another 5,899,000 shares through sales agents Cantor Fitzgerald & Co. and Hibernia Southcoast Capital. The company hopes to raise up to $32.1 million with this offering.
The proceeds are primarily to be used to pay for identified vessels, for which Memoranda of Agreement have already been signed. Proceeds may also be made available for the purchase of additional vessels or, to a lesser extent, general corporate purposes. Excel further reiterated its desire to continue its fleet expansion when on Wednesday the company agreed to acquire the MV IDC 2, to be renamed the MV Attractive, for a price of $15.5 million. The handymax bulk carrier was built in 1985, which contrasts with the company's stated objective of reducing the age of its fleet, by Mitsubishi Engineering & Shipbuilding Co. and has a capacity of 41,500 dwt.
Then on Thursday Excel announced that the company had agreed to acquire the handymax bulk carrier MV Fiona Bulker, to be renamed the MV Princess I, for a price of $25.6 million. The 38,800 dwt vessel was built in 1994 by Ishikawajima-Harima Heavy Industries.
Source: Freshly Minted, VOLUME 1, ISSUE 9, March 10, 2005

SeaContainers and Evgenides team up in Greece
---A foreign owner is set to operate in Greece's domestic ferry trades for the first time through a joint venture with a local player.
UK-based SeaContainers and the Evgenidis group are about to launch new passenger-ferry company Aegean Speed Lines (ASL) in a 50-50 partnership. The move also marks a first foray into the Greek ferry sector for Evgenidis.
The Greek Ministry of Mercantile Marine has announced that ASL will run the service between Piraeus and the western Cyclades Islands from April.
So far, one vessel is listed as under the service, the 3,003-gt passengership Speedrunner I (ex-Emeraude GB, built 1990). It will sail under the UK flag, according to the ministry.
TradeWinds understands that the joint venture will be sealed some time next week.
ASL will be the first to operate a foreign-flag passengership on a dedicated coastal ferry line in Greece after the government lifted the cabotage last year.
The cabotage lift had reportedly spurred fears in Greek passenger-shipping circles that a flurry of foreign players would invade the sector and snatch market share.
So far, however, international passengership companies have shown very little interest in making an entry into Greek waters.
Evgenides is mostly known for its Niver Lines operation, which employs general cargoships.
The group's Reefer & General Co of Greece controls two early 1980s-built cargoships.
Evgenides's fleet has dwindled since 1997, when it controlled a total of 13 reefers and general cargoships. Numerous sales led many to speculate over the group's gradual exit from shipping.
Evgenides is believed to hold investment interests in various sectors, including tourism. It is said to control an ownership stake in a luxury hotel complex in the western Cyclades islands.
For SeaContainers, the new venture will complement the group's extensive passenger-ferry activity and is another foothole in the Greek tourist industry.
The company operates up to 25 other passengerships and controls a number of companies involved in the leisure and tourism sector. It is a major investor in Orient-Express Hotels.
In 2001, the company was awarded a 40-year leasing agreement from the Greek government worth a reported $1m to operate the Corinth Canal isthmus. SeaContainers had also committed to take part in a $3m tourist-development project in the area.
Source:, Yiota Gousas Athens, published: 11 March 2005

Euronav adds $1bn Ceres deal in second Greek swoop
---Peter Livanos has sold Ceres Hellenic's TankLog tanker fleet to Brussels-listed Euronav for $1.02bn. Confirming the deal March 8, tanker operator Euronav said it will take over the entire fleet of TankLog, the company formed by Ceres Hellenic to hold all of its tanker assets, and merge it into its own operation.
Euronav will pay a combination of cash, stock and assumed yard payments to secure the fleet of 14 modern double-hull suezmax tankers, including five on order at South Korea's Samsung HI for delivery in 2006 and 2007, plus two double-hull aframax tankers. Piraeus-based Ceres will retain technical and part commercial management of the 16 tankers, adopted the same procedure as in the company's other merger deals.
This is the second swoop by Euronav on a major Greek fleet in under a week. Theodore Angelopoulos interests sold four VLCCs to Euronav for $477.5m last week. In this deal, Euronav acquired Metrostar Management's 290,900dwt Crude Guardian (built 1993), the 298,300dwt Crude Creation (built 1998), the 319,470dwt Crude Topaz (built 2002) and a 318,000dwt newbuilding slated for delivery in May. See Newsfront Vol. 6/Nr. 8.
Both companies will seek board approval before March 16 and Euronav plans to recommend it to the agm at the end of April. The Livanos group is set to get $420m in cash, and $350m worth of stock while Euronav will assume another $300m in obligations on five suezmax tankers under construction. Some $500m towards the deal is expected to come from funds generated when Euronav signed a new $1.2bn umbrella loan with Nordea bank reecently.
On finalisation Ceres will hold a 20% stake in Euronav, giving the Greek owner another
important chunk in a public shipping company. In 2000 Ceres' ChemLog was merged with with Norway's chem tanker operator Odjfell and today the Greek end owns over 25% of Odjfell and in 2001 Livanos merged the dry bulk vessels owned and managed under the DryLog banner with Italian owner Coeclerici to form Coeclerici Ceres Bulk Carriers, with Ceres holding a 34% stake. Ceres also manages ships in both these fleets and in the case of the latest venture, the ships will also retain the Greek flag and have Greek crews. Fate of Ceres' shore-side staff has to be discussed with the Belgian company.
Livanos said the Euronav deal was a strategic means to invest in a European tanker operation.
The combined fleet of the two companies will number 42 ships, including the 28 VLCCs and ULCCs belonging to Euronav.
Livanos said: "It is on the financial side a commitment into investing in tankers through a European public company as opposed to as individuals. There were a lot of things that we liked about Euronav, not least of which was the European play and we simply saw value in bringing the two assets together."
"They've got 28 double hull, spot-traded VLCCs which are doing very well. We've got the suezmaxes that have long-term commitments. It was not something that we would have considered doing with a US public company. Europe figured heavily in this."
Euronav's md, Paddy Rogers said: "We had been looking at the suezmax market for some time and the Ceres Hellenic fleet had all the components that we hoped to build ourselves."
Source: www.newsfront, 11 March 2005 Vol. 6 / No. 9

Maritime frenzy may be prelude to Greek tragedy
---Fresh bubbles invite comparison with the dotcom crash. So have investors learned nothing?
Greek shipping companies have often struggled to get the business world to take them seriously but go to Wall Street right now and you will find investors cannot wait to get on board.
Huge enthusiasm for a hitherto shunned and volatile maritime sector is just one example of a new stock market enthusiasm that exhibits at least some characteristics of a dotcom boom that went so horribly bust five years ago.
Yet barely six years ago Mr Economou hit some financial rocks when a $175m US bond issue for his Alpha Shipping vehicle defaulted within 12 months of its launch by blue-chip managers such as Citicorp.
Chris Thomas, DryShips' English-born finance director, said yesterday there was a "tremendous appetite" for shipping issues.
DryShips is just one of a handful of new maritime ventures which have already listed or drawn up plans for an initial public offering. The company - as its name suggests - operates dry bulk vessels of the kind that move iron ore or coal, and this type of company has almost never dared go to market before.
But the boom in commodity prices and the "China story" have sent dry bulk freight rates soaring and profits have followed. Investors are keen to find new ways of investing in China and ships are seen as an interesting vehicle.
The wet shipping front - tankers carrying oil - has been relatively well-established for some years with companies owned by easyJet founder Stelios Haji-Ioannou and Norway's John Fredrik sen (today's Onassis) using the New York stock exchange some while back.
Apart from a disastrous flurry of junk bond offerings in the late-90s, many people have assumed that the heavily cyclical shipping industry, with its often poor corporate governance commitment, did not really mix with capital markets.
In 2001 there were three shipowners listed in New York and their companies had a combined stock market valuation of $2.5bn. Now there are around 17 firms worth almost 10 times that amount. Peter Shaerf, a Briton who works for financial consultants American Marine Advisers, believes that there is a bubble in shipping investment but points out that comparisons with the tech-stock boom are not totally accurate.
"One big difference is that shipowners really do have hardware that can be seen and touched but there is also huge demand for vessels now which [building] yards cannot really satisfy till 2008."
That should underpin strong shipping rates for some time yet, while Martin Stopford, a director of the world's biggest shipbroking firm, Clarkson, points out that owners made hard profits of $80bn in 2004. "That's real," he says.
But still Mr Shaerf says that a quick glance at internet chatroom gossip will show an enormous ignorance about the shipping industry.
"I saw one where someone was raving about an LNG [liquefied natural gas] operator when actually the owner used LPG [liquid petroleum gas] which are two completely different markets with hugely different characteristics," he explains.
But it is not just shipping where an irrational exuberance appears to have gripped investors. The oil market itself is being buried in a stampede to float by companies eager to take advantage of the new hunger for IPOs.
Hardly a week goes by without an offering but veteran oil analyst Tony Alves - now with KBC Peel Hunt - says some of them are "so absurd they are not worth writing about".
In the laughable category must surely be White Nile, whose share price rose 13-fold days after its launch on the back of exploration rights it expected to win from a provisional government in southern Sudan. It now turns out that French oil major Total believes it has rights to the same acreage from a different authority.
There have been other highly speculative companies which have come to market with extravagant promises, such as Circle Oil and its Namib desert rights and Petrel Resources which believed it had a head start in Iraq. As in shipping, there are some genuinely fundamental drivers for the interest in oil stocks - not least the $50-plus price for a barrel of crude.
This has driven traditional oil majors such as BP and ExxonMobil into new areas (the former has started to drill in the Black Sea off Georgia and the latter off Colombia) and encouraged speculative exploration.
The Falkland Islands has long been seen by some as a possible new oil source but one that has never delivered on its promises. Desire Petroleum - an old hand in the region - has just raised new money to explore there.
Borders & Southern and Rock Hopper are two new firms planning to visit the stock market on the back of a fresh interest in the Falklands.
So is this enormous enthusiasm for energy IPOs not a bubble? "Very much so," argues Mr Alves. "Some of these companies coming to the market are very high risk. Some are raising large amounts of money to fund exploration wells that have a 90% chance of failure," he adds.
It is not just oil which has spiralled up in price. Everything from iron ore to coal and copper have put on enormous increases in value, encouraging a host of new issues in that sector too.
James Montier, global equity strategist at investment bank Dresdner Kleinwort Wasserstein, agrees that commodities and mining stocks are displaying bubble-like valuations. "It never ceases to amaze me that investors buy into the hope of growth," he says. "Commodities and mining stocks are a play on China and the reality is that nobody has the foggiest idea of what is going on in China."
Not that the original technology bubble has disappeared. Indeed, there is evidence that it is reinflating. Last November Mr Montier was so incensed by a Wall Street Journal report of the views of Morgan Stanley's Mary Meeker that he highlighted the absurdly high valuations commanded once again by the likes of Yahoo! and eBay.
Ms Meeker, who became a household name in the US with her bullish forecasts during the dotcom years, was using those share prices to argue that "the enthusiasm was well placed, it just got ahead of itself in many respects".
Mr Montier reckoned "this has to be the kindest description possible of the biggest bubble in financial history". Just look at some of the current valuations in terms of price to sales, he argues: Google is currently worth 16 times its 2004 sales; eBay is valued at about 17 times, and Yahoo! is worth almost 13 times.
That cannot make sense, he thinks. Listen to what Scott McNealy, chief executive of Sun Microsystems, said about the time in 2000 when his company was valued at 10 times its sales.
"At 10 times revenues, to give you a 10-year payback, I have to pay you 100% of revenues for 10 straight years in dividends," he said in 2002. "That assumes I can get that by my shareholders. That assumes I have zero cost of goods sold, which is very hard for a computer company. That assumes zero expenses, which is really hard with 39,000 employees. That assumes I pay no taxes, which is very hard. And that assumes you pay no taxes on your dividends, which is kind of illegal. And that assumes with zero R&D for the next 10 years I can maintain the current revenue run rate."
So, five years on from the dotcom crash, maybe the truth is simple but ugly: investors have learned nothing.
British neterati who survived
By comparison,, the online travel search and price comparison site established in 1996, makes money, and last year accounted for 15% of all travel internet advertising.
Alongside the "start-ups", many of the UK's leading retailers have launched on the internet since the boom., for instance, is now the UK's largest online food retailer.
On the technology side of the internet goldrush, ARM Holdings, whose chips power a range of devices including Apple's iPod, has seen its share price suffer in the dotcom fallout but generated enough cash to pay its first dividend last year.
Some of the UK's neterati are also still to be found at the head of UK firms. Ian Livingston, who was finance director of Dixons when it set up Freeserve, is now head of BT's retail business. John Swingewood, who bought Sports Internet when he worked at BSkyB, recently returned as chairman of Pannal, a cash shell seeking technology investments.
Source:, The Guardian, Friday March 11, 2005, Terry Macalister and Nils Pratley

Valuing DryShips: Proving Demand for Shipping IPOs
---George Economou stunned the ship finance community worldwide and silenced almost all his harshest critics with the extraordinarily successful floatation of DryShips Inc. on the NASDAQ on February second. The final deal nearly doubled from its original size, going from 7.1 million shares in the initial prospectus to an astonishing 13.0 million shares (before underwriters' over-allotments). Even with the massive jump in size, at $18 the shares still priced favorably compared to the red herring price of $17 and at the high end of the $16-18 range, raising for the company a gross $234 million against an initial target of $120.7 million (both before shoe and underwriters' commissions). Market sources at the time said that the deal was nine times oversubscribed, and the stock price quickly jumped another 10% in heavy trading. The execution of the offering was certainly a success for underwriters Cantor Fitzgerald & Co., Hibernia Southcoast Capital, Oppenheimer & Co., Dahlman Rose & Company and HARRISdirect.
Economou's company, which owned a total of five panamax vessels and one capesize vessel with an average age of 18 years at the time of the offering, had originally planned to use the proceeds to purchase an additional eight panamax and one capesize vessel, as well as two handymax vessels, which would bring the combined fleet average age to 13 years. These were to be purchased with $111.5 million in net proceeds from the offering together with $145 million under a new senior secured credit facility with Commerzbank AG and HSH Nordbank AG, $30 million under another credit facility and 1.35 million shares. Now, having acquired its 11 identified vessels, but with more than $100 million more than anticipated in cash, the company has plenty of other options, and investors are already beginning to have the opportunity to gauge the company's growth potential.
The increase in offering size was good news for investors in the IPO in the sense that it gave the independent shareholders more control over the company. The extra 5.9 million shares diluted the ownership of George Economou and affiliates down from 67% to 51.9%, although Economou did maintain a controlling stake for himself and his affiliates.New investors also saw the dilution of their share value fall slightly from the expected $11.55. Even so, at the price of $18 per share, new investors incurred an "immediate and substantial dilution" of net tangible book value of $10.04 per share ($9.49 if the underwriters exercise in full their over-allotment options). Meanwhile, previously existing shareholders saw the net tangible book value of their shares appreciate by $8.27 with the offering, excluding over-allotments, bringing the value to $7.96 from -$0.31 as of October 31, 2004. Pre-offering shareholders were also expected to receive a dividend totaling $69 million, comprised of $51.0 million of retained earnings as of October 31, 2004, and $18.0 million of earnings of the initial fleet for the period between November 1, 2004 and the date of the prospectus.
On the valuation front, DryShips' price resembles that of its only real US-listed comparable, Excel Maritime. The company's shares priced at 4.1 times EBITDA, in the 4-5 times EBITDA range we had predicted, based on 2005 estimates for capesize, panamax and handysize vessel earnings. It also priced at 1.8 times net asset value, substantially higher than where most tanker stocks were trading but a bit short of where fellow dry bulk-operator Excel Maritime was trading at the time. As the stock traded quickly up by more than $2 per share, that gap was soon closed and was exceeded. While the EBITDA figure may appear low in absolute terms, it is important to note that the DryShips fleet has an average age of 13 years - 13 years less cashflow generation power than a newbuilding, which would clearly have a higher EBITDA multiple because most ships cost more than their marginal earning ability. In addition, the DryShips fleet will trade mostly on the spot market, so it is misleading at best to try to pin down the EBITDA multiple as a static number.
Aside from spot market and stock price volatility, the EBITDA multiple is also being affected by Mr. Economou's deployment of the new IPO funds in what appear to be accretive purchases.Among the vessels DryShips is rumored to be acquiring are an $85 million charterfree capesize ship and a $40 million 1995-built panamax bulker with a 14-month charter back to the sellers at $35,000 per day. Using Clarkson's spot market day rate guidance of $75,000 for the capesize vessel, the ship was inexpensively priced compared to DryShips' shares, at 3.5 times EBITDA. Likewise, at $35,000 per day, the panamax was accretive to earnings, at 3.6 times EBITDA. The first deal, without the charter, is of course the more risky of the two, as rates of $50,000 per day, substantially above the $43,000 per day average for 3-year time charters reported by Clarkson, would make the ships dilutive to earnings, at 5.15 times EBITDA. Now if rates for this type of vessel were to fall to $18,000 per day, which is still higher than one-year timecharter rates averaged in 2002, the purchase price of the vessel would skyrocket to 17.6 times EBITDA.
All this just bears out what investors in the deal must have been thinking from the start. Owning shares in DryShips is an excellent way to be exposed to the dry bulk market, and especially one particularly important factor in that market: China. As long as the dry market turns out to be as strong as investors are hoping, then no one should be disappointed.
Source: By Matt McCleery, Marine Money Magazine, March 2005

Genmar Kestrel is latest major repair job as Hellenic bounces back
---GENERAL Maritime- managed suezmax Genmar Kestrel has entered Hellenic Shipyards for repair after its collision a month ago with another suezmax tanker off Egypt.
The double-sided Genmar Kestrel suffered damage in number four and five starboard ballast tanks, as well as lighter damage to a centre cargo tank.
The estimated $4m repair is expected to take under 40 days and involves about 485 t of steel renewal.
According to sales and marketing director Alex Koutsorodis, the contract is the latest in a string of significant repair projects underlining the Greek yard's resurgence.
Currently four vessels are under repair at Hellenic and the yard was "fully booked until May", he said.
Source:, By Nigel Lowry in Athens- Tuesday March 08 2005

Bulgaria-Greece Pipeline Building Inked in April
---Bulgaria, Russia and Greece will sign next month a memorandum for building the Burgas- Alexandrupoulis pipeline, it became known on Friday.
The USD 668 M project has been in planning for almost a decade, involving the governments and companies from the three countries, plus European Union (EU) financial support.
April 15 is the date fixed for a trilateral meeting in Sofia, and for signing the memorandum.
The pipeline will be 193 km long and will be used for the transportation of 50 to 60 millions of tonnes of oil annually.
Source: Business: 11 March 2005, Friday.