Greek Shipping News Cuts
Week 33 - 2005


Shipowners are on collision course with expensive Asian shipyards

With shipyards able to wait, any ships ordered now would not be ready before the second half of 2008, making shipowners more hesitant. Recent reports suggest that ship deliveries will reach 28 million tons in size during 2005 against just 18 million tons in 2000. As for 2007 and 2008, this figure will rise as high as 31 million tons per year.
It is also clear that in the last few years the shipbuilding community has reached its limits, as since 2000 orders for container ships have risen by 125 percent, with about 9 million tons to be delivered from 2006 to 2008, while in 2007 alone 12.5 million tons of tanker capacity is expected to enter the market. About 6 million tons of carrier ships will be delivered by 2008.
After all this, the activity in shipyards had to be affected. Recent reports by international analysts have suggested that from 2006 new ship orders could drop to 20-25 million tons and as low as 15 million tons in 2007, from an order level over the last three years remaining at 40 million tons annually.
Signs of price drops
The above developments show that even the threat of stopping operations is hanging over the most expensive of shipyards, which had been quick to increase their boat cradles due to the high demand until recently. If they are forced to lower their prices closer to their costs, they will have to render their vacant cradles inactive.
On the other hand, some believe that the possible decline in container ship demand, combined with the drop in rates, will lead shipowners with significant liquidity to proceed to additional orders for liquefied natural gas (LNG), tanker and carrier ships.
Source:, Date: 8-17-2005, NIKOS ROUSSANOGLOU

---On Tuesday, indicted lobbyist Jack Abramoff agreed to answer questions about the murder of a Greek business contact named Konstantinos Boulis. Boulis was shot to death a few months after he sold 11 casino ships to Abramoff and a partner. Meanwhile, Paris Hilton continues to plan her marriage to Greek shipping heir Paris Latsis, and Mary-Kate Olsen has been seen around town with Greek shipping scion Stavros Niarchos III. What's with all the Greek shipping magnates?
Greek shippers took advantage of an increase in the oil-tanker trade to amass large fortunes and increase the size of their fleets. The Greek shipping industry doubled in size in the 1960s; by the end of the decade, it was the biggest in the world. Onassis and Niarchos were the best-known Greek shipping magnates, with huge numbers of ships and tremendous personal fortunes. They were also fierce rivals who competed over women and the length of their yachts
Greeks still profit handsomely from maritime trade, but they've fallen from the ranks of the world's wealthiest shippers. According to Forbes, the richest sea traders in the world include the nonagenarian Dane Maersk Mc-Kinney Moller ($5.3 billion), the Norwegian John Fredriksen ($3.4 billion), and the Taiwanese magnate Chang Yung Fa ($1.3 billon). Not a single Greek shipper appears on the magazine's tally of billionaires. (Paris Latsis' uncle Spiro does make the list, but at this point the family's wealth mostly comes from banking and real estate.)
The era of the celebrity shipping magnate may soon be over. Several high-profile shippers have recently died, like the Norwegian Arne Naess Jr. (who was once married to Diana Ross). And shipping companies are now more likely to be incorporated and run by CEOs rather than playboy private owners. The descendants of yesterday's magnates such as Onassis and Niarchos tend to get more publicity in the tabloids than modern tycoons like Maersk Mc-Kinney Moller and Chang Yung Fa.
Bonus Explainer: Greek shipping magnates existed long before World War II. One boom happened in the 18th century, when a war between Britain and France left important trade routes between the Ottoman Empire and Western Europe open to Greek shippers. The Greeks continued to thrive on maritime trade after they gained independence from the Ottomans in the 19th century. The extravagant mansions built on the island of Syros reflect the wealth of these early magnates.
Bonus Bonus Explainer: Why do we call them "shipping magnates"? Until the mid-1800s, the term "magnate" was used to refer to a political figure or nobleman, rather than an entrepreneur. It wasn't long before the press started to assign industrial leaders informal titles of nobility like "oil king," "cotton lord," "lumber baron," or "railroad tycoon." These phrases were mostly interchangeable, but certain titles tended to stick with particular industries. "Shipping magnate" first appeared in the New York Times and Atlanta Constitution in 1910, but the phrase didn't really catch on until the 1950s. The celebrity of "Greek shipping magnates" Stavros Niarchos and Aristotle Onassis may be responsible; the Times gave the title first to Niarchos in 1952, then to Onassis two years later.
Source:, By Daniel Engber, Posted Wednesday, Aug. 17, 2005, at 12:41 PM PT

Storm ahead
---A small but vital sector of Greek shipping is facing major challenges.
Greek passenger shipping is a tiny sector relative to the rest of the huge Greek-controlled fleet but it serves a vital strategic role in linking the country's islands with the mainland.
Even so, this passengership fleet may be halved by 2008, while by 2015 close to 60% of today's vessels will have been withdrawn from service, a new study reveals.
XRTC Business Consultants warns that the most serious problems facing the sector will be a shortage of ships and the inability of companies to invest in replacement tonnage. The prospect of insufficient tonnage to cover the lines is a real danger, the report predicts.
Greece has an upper age limit of 30 years for passenger vessels, after which they must be withdrawn from service.
"It would appear that the only avenue for listed and unlisted companies that want to maintain their market share is the replacement of older ships due for withdrawal from service with younger secondhand ships, which are certainly cheaper than new vessels and also can be delivered as soon as they are found," the report said.
The XRTC study principally examines the five listed Greek passengership companies, Attica Group, Blue Star, Anek Lines, Minoan Lines and Nel Lines. It also includes information on unlisted Hellenic Seaways (formerly Hellas Flying Dolphins), which in 2004 carried 45% of domestic passenger traffic, or 5.9 million passengers.
The report notes that over the past three years, the six companies have showed a continuing marginal reduction in traffic in almost all the markets in which they operate. In addition to the domestic routes in the Aegean and Ionian Seas, Greek companies serve the Adriatic routes, while Attica's superfast ferries are also active in Northern Europe.
Between 2003 and 2004, the number of passengers carried domestically dropped by 7%, Adriatic traffic fell by 16% but Northern Europe showed a small increase of 0.3%.
The total number of ships operated by the five listed companies has shrunk from a high of 50 vessels in 2002 to 41 ships today as older vessels were phased out but the corresponding age profile has improved from 17.67 years to 12.1 years, the report shows.
A number of vessels have been sold as a result of pressure from banks that financed the heavy newbuilding programmes of earlier years.
Loan servicing, depreciation and increased bunker prices had a negative effect on the financial results of the companies in 2004, the report says. Earnings before interest, tax, depreciation and amortisation (Ebitda) for the five listed outfits in 2004 slowed the upward trend of the previous three years, totalling EUR 237.8m and increasing just 2% on 2003.
A lack of investment over the past four years, with the exception of Hellenic Seaways, has pushed companies to examine other strategic moves and led to much "intermarriage" between them. Talk of mergers continues to circulate but has not yet been verified by them, XRTC says.
Meanwhile, the shadow of being brought before the European Court for not completely liberalising the sector in line with European Union requirements is hanging over the Greek state. All domestic lines are under partial state intervention an issue that has also been a source of tense negotiations between the government and owners, who claim they are expected to fulfil a social function at the cost of the listed companies.
The report also comments on the existence of a "two-tier market" that includes a number of smaller companies.
In the past six weeks, at the peak of the summer-holiday exodus, hundreds of passengers have been stranded as older ships, including three operated by GA Ferries, have broken down. Passenger traffic totalled 2.5 million in July and the first two weeks of August, says the shipping minister. The chaotic results of the breakdowns led to the ministry slapping heavy fines on the operators.
Already, halfway through the summer, XRTC says, the signs of malfunctioning of the passenger-shipping network have surfaced and "can be expected to worsen in coming years if the existing status [of the sector] is maintained".
Source: By Gillian Whittaker, Athens,, Weekly issue published: 19 August 2005

Investors set sail on shipping stocks
---The fashion in initial stock offerings this summer is about as retro as you can get: shipping companies, the kind with vessels that carry cargo across the waves.
About a dozen such companies have initial offerings in the Wall Street pipeline -- and eight shipping IPOs, valued at almost $1.6 billion, have already gone to market this year, said Craig Fuehrer, head of the global shipping investment banking practice at Deutsche Bank Securities.
Shipping, he said, accounts for 15 percent to 20 percent of the value of prospective listings in New York now. "It certainly is unusually high market activity for this nonsexy industry, in terms of IPOs," said Jay Ritter, a finance professor at the University of Florida.
It's unusual, but not illogical, Ritter said. The IPO market tends to have a flavor of the month, and right now, with all the attention being paid to world trade, it's shipping. Despite signs that the ship leasing market is softening, the stock issues are still coming, though offering prices have begun to decline.
"The perception is that the shipping group is still very strong, despite coming off recent highs," said Joe Morea, head of United States equity capital markets at RBC Capital Markets in New York.
For some investors, shipping stocks offer a way to capitalize on the strong growth in the Chinese and Indian economies, said Mons Bolin, president and chief executive of Aries Maritime Transport, which is based in Athens, Greece; the company went public on June 3.
Demand for ships is high, partly because they are needed to haul the surge of Chinese and Indian imports of raw materials and fuel -- and exports of consumer goods destined for markets such as the United States.
Demand can be measured through charter rates -- the charges for leasing a ship. These rates are highly volatile. They generally peaked late last year and began falling this spring, in time to depress the market offering prices of the spate of new shipping company issues.
Charter rates have declined for both of the major categories of ships owned by the companies with new stock offerings. These are dry bulk ships -- which haul dry, raw material like grain or ore -- and crude-oil tankers. Most recent dry bulk shipping company stock issues are trading below their offering prices, while tanker operators such as Aries Maritime have generally done better.
The industry's recent IPOs, including Aries, were generally priced below their expected ranges. Aries opened trading at $12.50 a share; it originally sought to list shares at $14 to $16. It is now at $14.71.
Aries has been insulated from some of the volatility of the charter market because it has accepted longer-term leasing deals, Bolin said.
"Good, experienced ship operations with longer-term charters perform substantially better in U.S. equity markets," Morea said.
The stock performance of the shipping industry has been mixed this year, according to indexes compiled by Deutsche Bank. Stock prices of oil tanker operators were up 14.8 percent, significantly ahead of the 1.2 percent price gain of the Standard & Poor's 500-stock index. In contrast, dry bulk carrier stocks have declined 5.7 percent, and container ship stocks are up 11.7 percent.
In addition, many companies planning to offer shares have had to lower their sights.
For example, Quintana Maritime of New York, which early this summer planned to sell 16.7 million shares at $14 to $16 each, cut the price of its July 5 offering to $11.50. The stock is now at about that price. Quintana operates eight larger-size dry bulk ships.
Weakness in the charter market may mean that several offerings will fall through. "Not all deals will get done," Feuhrer said.
The Capital Maritime and Trading Corp., which had sought to raise $306.7 million through an IPO, in late June withdrew its plan for a $14-to-$16-a-share offering, according to SEC documents. Investment bankers had reported slackening interest in the IPO among institutional clients.
While demand for tankers will remain strong this year, it will not reach the levels of 2004, said Royal Shepard, an equity industry analyst at S&P in New York.
Daily charter rates for tankers carrying 200,000 to 300,000 tons of cargo and supplies averaged about $62,000 in the second quarter, versus more than $100,000 in the fourth quarter of 2004, Shepard said. That is when charter rates hit a three-decade peak, reflecting increased global demand and strained tanker capacity, he noted.
Charter rates for dry bulk ships have also been volatile because utilization is high, approaching 95 percent of capacity, said Barry Parker, of bdp1 Consulting of Bayville, N.Y. "Small increases in demand quickly translate into higher charter rates that generally go to the bottom line for operators of these ships," he said. Of course, small declines in demand can put a big dent in profits.
New issuers are generally using IPO proceeds to reduce debt incurred when creating or expanding their fleets, to cash out original investments or to buy additional vessels. The world's shipyards are already working full tilt, so the offerings are unlikely to result in an immediate increase in global shipping capacity.
Beyond worrying about charter rate volatility, investors may be concerned that many new shipping companies have limited operating histories because they were formed specifically to buy and manage newly acquired ships.
Finally, there is history to consider. The first-day returns for shipping IPOs are well below the historical average for IPOs in general, according to Ritter.
From 1988 to 2004, the average first-day return for 13 shipping industry IPOs was 2 percent, compared with 21 percent for 5,137 other IPOs during the same period, he said. And from 1988 to 2001, the 10 shipping companies that had IPOs and histories of at least three years had an average return, excluding first-day gains, of just 5.6 percent a year over their first three years. That compares with 6.9 percent for other IPOs during the same period, Ritter determined.
Source:, Posted on Mon, Aug. 15, 2005

Boom and bust at sea
---How long can the good times last for the shipping industry?
IF TRADE is the lifeblood of the world economy, then the ships that perform the mundane task of transporting goods and raw materials from where they are produced to where they are wanted are the red corpuscles. In 2004, the world's fleets carried around 90% of total global exports worth $8.9 trillion, largely unnoticed. This year, however, shipping firms are attracting the attention of investors as never before. On August 11th Seaspan, a container-ship firm spun out of Canada's Washington Marine, became the biggest of many shipping initial public offerings (IPOs) this year with a $600m listing of its shares on the New York Stock Exchange.
Investors have noticed bigger profits, and shipowners have been cashing in with an enthusiasm that suggests they are not entirely convinced that the good times will last. Peter Shaerf of AMA Capital Partners, an investment bank, points out that in 2000 publicly traded tanker firms had a market capitalisation of just $2.5 billion; today the figure is nearer $20 billion. The stockmarket value of firms operating bulk carriers (ships that transport raw materials such as ore, coal and grain) has soared from almost nothing to $5 billion in the same period.
Most of the recent IPOs have involved bulk-carrier operators. Theirs is a highly fragmented business, consisting of perhaps 1,300 firms around the world. Typically, these share offerings are put together by a Greek family-shipping concern, which parcels together some assets and sells a minority stake through companies registered in the Marshall Islands. This small archipelago in the Pacific, equidistant from Hawaii, Japan and Australia, is much prized among shipowners for its light regulatory touch.
Investors with long memories may feel more than a tinge of concern about some of the people involved in the latest IPOs. Shipping firms that raised cash during the junk-bond mania of the late 1990s were among the worst performers. Bondholders in Enterprisers Ship Holding still smart over a default that cost them $175m. Despite chasing the firm's refrigerated-cargo vessels around the world's ports with court orders and threatening the Restis family with legal action, bondholders have had little recompense. Now the Restis family wants to sell Golden Energy Marine, although its IPO is currently on hold.
Stormy weather ahead?
The uninspiring track record of some shipowners is but a squall compared with the storms that may be gathering over the horizon. The recent bumper returns from shipping have prompted a ship-building boom. As a result, an armada of new ships is joining the world's fleets just as the rate of growth of world trade may be slowing. According to the Economist Intelligence Unit, a sister company of The Economist, the rate of growth of world trade in goods is set to slow, albeit to a still respectable 6.6% this year and 7.0% in 2006.
Might there be a return to the overcapacity that characterised shipping in the 1970s? Mr Stopford points out that last year shipping firms ordered new ships at a cost of $80 billion. The world's shipyards saw their order books expand by one-third in the year to January 2005. They expect to be fully occupied until 2008. In 2000-03 the world's tanker fleet grew by 6m deadweight tonnes (dwt) of capacity. In 2004 alone, it grew by 39m dwt. At the end of 2004 the world cargo fleet, with 889m dwt, was 14% bigger than at the end of 2000, says Lloyd's Register. In 2000, orders for new ships equalled only 10% of the fleet's total tonnage. At the start of 2004, 207m dwt of new ships were on order, equivalent to around 23% of the current fleet.
Freight markets are volatile and hard to forecast. Investors in this notoriously cyclical industry may soon be in trouble. In the first half of this year, for instance, rates for VLCCs dropped to half their 2004 level (see chart). Bulk-carrier rates have also plunged in recent months.
Up to 20 more IPOs may take place later this year, assuming that freight rates pick up a little after the summer lull. But most analysts expect rates to slide again next year. According to Drewry, a shipping consultancy, demand is likely to outstrip fleet growth for container shipping this year but could slip behind in 2006, when fleets are expected to grow by a heady 14%.
China's astonishing rate of growth cannot last forever. Indeed, spot rates for bulk carriers in Asia recently hit a two-year low after falling by half from a peak in March as Chinese demand has cooled a bit. And the more slowly growing trade across the Atlantic is vulnerable to any slackening of economic activity in Europe or America. If growth and trade stumble while shipping lines are piling on extra capacity, the result could be empty holds, plunging shipping rates and rapidly sinking profits.
Source:, Aug 18th 2005, From The Economist print edition

Hanseatic bags deal with TOP Tankers
---Shipmanager Hanseatic now counts Nasdaq-listed TOP Tankers as a client after the commitment of six vessels for management.
The opportunity to break the Greek market with third-party management has only come about in recent years. Previously, the country operated a closed market where management of ships was kept in-house and not outsourced, bucking the trend seen elsewhere in the world.
In a further boon to the fledgling Greek arm, Hanseatic has also secured the management contract for a third Vafias liquefied natural gas carrier.
Source:, By Carly Fields in Limassol- Thursday August 18 2005

Quintana Maritime Limited Takes Delivery of Vessel
---Quintana Maritime Limited (Nasdaq:QMAR) announced today that it has taken delivery of another Panamax vessel. The vessel named "Coal Pride," built in 1999, has a carrying capacity of 72,600 deadweight tons (dwt). The "Coal Pride" is employed with Cargill under a 4 to 6 month time charter at $15,000 per day gross.
The fleet now includes seven Panamax size vessels with cargo carrying capacity of 511,682 dwt and an average age of approximately 8 years.
About Quintana Maritime Limited
Quintana Maritime Limited, based in Greece, is an international provider of dry bulk cargo marine transportation services. The company currently owns and operates a fleet of seven Panamax size vessels and has entered into an agreement to acquire one more Panamax vessel, expected to be delivered to Quintana by the end of August 2005. At that time, it will have a fleet of eight vessels with a total carrying capacity of 585,072 dwt and an average age of approximately 8 years.
Forward-Looking Statement
This press release contains forward-looking statements (as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) concerning future events and the Company's growth strategy and measures to implement such strategy; including expected vessel acquisitions and entering into further time charters. Words such as "expects," "intends," "plans," "believes," "anticipates," "hopes," "estimates," and variations of such words and similar expressions are intended to identify forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates which are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of the Company. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to changes in the demand for dry bulk vessels, competitive factors in the market in which the Company operates; risks associated with operations outside the United States; and other factors listed from time to time in the Company's filings with the Securities and Exchange Commission. The Company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based. SOURCE: Quintana Maritime Limited
Source:, ATHENS, Greece, Aug 16, 2005 (BUSINESS WIRE) --