Greek Shipping News Cuts
Week 46 - 2005


Athens 'NO' to Spanish request to freeze Universe assets

The security is sought to cover potential liability as the legal responsibility for the November 2002 spill starts to focus on the Athens-based company. The judge took the action in July to stop the company from ignoring a possible future court ruling over responsibility for the spill.
However, Universe failed to reply to the request and the Athens government was asked to help.
Judge Souto decided the managers of the 81,500dwt, 1976-built tanker could be held directly responsible for civil liability as he feels Prestige' captain, Apostolos Magouras, was not acting alone when refusing to have the damaged tanker towed away from the Spanish coast.
Souto formed this opinion after listened to video evidence recorded from a helicopter indicating Magouras was obeying orders from his employers prior to the break-up of the Prestige after a six-day battle in heavy seas. Actual owners behind the Prestige are thought to be beneficiaries of a foundation set up by the late John Coulouthros.
The Spanish move ignored provisions of the 1992 Civil Liability Convention, to which Spain is a party, and based its decision on Spanish criminal law, which clashes with the provisions of the CLC limiting the extent to which shipowners can be held liable after a pollution incident.
Media reports in Spain say a political agreement was reached between the Basque and Spanish administrations. It is reported the administrations and ABS have been working on a settlement for two years and as Spain's state lawyers and lawyers involved in the separate Basque action have been working together, there is a feeling an out-of-court settlement is likely. ABS strongly rejects claims it was negligent and is counter suing to cover costs it may incur fighting the actions.
Source: 18 November 2005 Vol. 6 / No. 43,

$1 million fine for waste oil discharge
---Karlog Shipping Company Ltd. (Karlog Shipping)--operator of a fleet of cargo freighters based in Piraeus, Greece--pleaded guilty to making false statements and obstructing justice in connection with the overboard discharge of waste oil ugh a hidden bypass pipe on the M/V Friendship, a Greek-registered cargo ship, the U.S. Justice Department announced Wednesday.
Under the terms of a plea agreement reached with prosecutors, Karlog Shipping was ordered to pay a $1 million fine, to develop a comprehensive court-monitored environmental management system, and to serve three years of probation.
The comprehensive environmental management system will be a fleet-wide program designed to ensure that the company properly supervises all of its vessels, preventing future illegal discharges and ensuring that vessels are in compliance with environmental laws moving forward.
"Today's guilty pleas are evidence of the Justice Department's commitment to ensuring that crimes that harm our environment will not go unpunished," said Acting Assistant Attorney General Kelly A. Johnson. "Companies like Karlog, which knowingly pollute our oceans and then intentionally lie to cover their actions, will be prosecuted to the full extent of the law."
The government's investigation began in November 2004 after the Coast Guard discovered evidence of the bypassing during a routine inspection of the M/V Friendship in Gravesend Bay, Brooklyn, New York.
Panagiotis Kokkinos, the ship's Chief Engineer, and Athanasios Chalkias, the ship's Fitter, have also both pleaded guilty in connection with their role in ordering crew members to make false statements to the Coast Guard regarding discharges of oil from the ship.
Both Kokkinos and Chalkias were sentenced to 30 days incarceration and three years of probation on October 6, 2005.
According to documents filed in court, Karlog Shipping discharged oil contaminated bilge waste overboard through the bypass equipment and without the use of the oil water separator. The pollution was then concealed by maintaining a false oil record book that made it appear that the ship was being operated properly.
Engine room operations on board large oceangoing vessels such as the M/V Friendship generate large amounts of waste oil. International and U.S. law prohibit the discharge of waste oil without treatment by an oil water separator-a required pollution prevention device. Law also requires all overboard discharges be recorded in an oil record book, a required log which is regularly inspected by the Coast Guard. The waste oil may be burned on board through the use of an incinerator or offloaded onto barges or shore side facilities for disposal.
This case was investigated by the U.S. Coast Guard Criminal Investigative Service and the Environmental Protection Agency Criminal Investigations Division, and prosecuted by the U.S. Attorney's office for the Eastern District of New York and the Department of Justice Environmental Crimes Section. The case was initiated by the Marine Inspectors and Marine Investigators from Coast Guard Sector New York.
Source: Marine Log, NY, November 18, 2005

Orders for new ships decline sharply over first three quarters
---New ship orders appear to be losing steam in 2005, according to data for the year's first nine months, as they reached just 45 ships and were worth a touch over $2 billion in combined worth.
With the months of August and September excepted, new orders remained in shallow waters throughout the year, on the back of four years of strong growth: The hundreds of ships Greeks ordered between 2001 and 2004 have been seeing delivery since the end of last year.
In 2004 alone, Greek shipowners ordered 135 new ships, worth a total of $5 billion. They had also maintained their option to extend orders for 30 new vessels in various shipyards around the world. Most of those options were used during 2005.
The reduction in new orders by Greek shipowners is attributed to a variety of factors. The lack of launching cradles is the main one, at least in the biggest and most reliable shipyards. This problem began emerging in 2004, when most major shipowners rushed to place new ship orders while they enjoyed good cash flow thanks to the rise of chartering rates to record levels in virtually every market.
Shipyards are fully booked and this obviously affects rates as well. Shipbuilding costs have risen sharply in the last couple of years, making this a costly choice for every shipowner. When the decision to order a new vessel must be made during a period of low rates, like today, owners are likely to opt not to order.
After all, shipowners have to anticipate the future course of the market where they intend to employ their new vessels ordered, given that most deliveries could stretch up to 2008 or even 2009 in some cases.
Shipyards, for their part, are suffering significant financial problems due to their inability to foretell shipbuilding costs. They sign contracts which, a year later, generate losses instead of profits, especially in periods of rising prices for raw materials such as steel.
During the summer shipyards tried to renegotiate terms in many new order contracts. Depending on the case, shipowners either show some understanding and accept higher prices, or send the case to courts of arbitration, aiming at compensation.
The situation for shipowners worsens further by the increasing unreliability by certain shipyards, mainly among those that lack a solid financial and entrepreneurial base, say market professionals.
In order to handle the current difficult situation without compromising the Greek fleet's renewal process ongoing in recent years, many Greek companies are turning to specialized shipping niches, such as the increased number of orders for liquefied petrol gas (LPG) ships. The situation in those markets is less saturated, because of lower interest. For example, since the beginning of 2005 Greek interests have ordered at least 11 LPG ships.
These developments also point to rising confidence in dry-bulk vessels, which for the first time could overtake tankers among new ships. This is explained both by the strong prospects of the dry-bulk sector (thanks to China) and by the relative lagging in renewal of dry-cargo fleets.
Still, Greek activity in sales and purchases of old vessels partly offsets the drop in orders, as several companies make sure they renew their fleet by acquiring ships aged up to five years.
Finally, many shipping companies are finally receiving vessels they had originally ordered two or three years ago, which will allow them to cover their short-term as well as their long-term needs.
Source: Kathimerini Greece | By Nikos Roussanoglou - Kathimerini, 15 Nov 2005

---NEW bulk carrier orders by Greek shipowners in the first nine months of 2005 have matched contracting activity in the whole of last year, although in general the last two years have marked a slowdown in the pace of ordering in comparison with 2002 and 2003.
Mr Banos says the problem is not simply the fact that facilities are now booked up until 2008.
Source:, Monday November 14 2005

Panamaxes dominate in year of subdued purchasing
---High ship prices have affected deals this year and made secondhand the preferred route.
OFTEN, there has been no better indicator of the commitment of Greek shipowners to the dry bulk industry than their prodigious activity in the sale and purchase market.
But this year looks like being one of reduced dealing in secondhand vessels, notwithstanding the appetites of newly launched public dry bulk companies.
George Moundreas & Co has recorded 85 Greek bulk carrier acquisitions in the first nine months of 2005, below the levels of buying clocked up in the busiest years.
But the emphasis has been overwhelmingly on modern tonnage and altogether owners have invested $ 2.8bn in secondhand bulker deals, half of which has gone towards purchasing a total 40 panamaxes.
Stubbornly high prices for ships have almost certainly taken their toll on conclusion of deals in the market, although it may not have been the main factor for the Greek shipping fraternity.
Moundreas sales and purchase vice-president Takis Efstratiou says: "I feel the activity will be less than in 2004, although there are still three months of the year ahead.
"I think the fluctuations of the freight market this year have been more influential than high prices. Of course, there will still be people afraid of high prices and remembering the freight crisis of 1981-6."
According to Mr Efstratiou, "the trend is for as young as possible and most people can afford to pay."
Regarding older tonnage, he notes, "a 25-year-old bulker is earning good money today - but for its existing owner. The ship has probably been amortised two or three times and he knows the vessel well.
"But if you buy an older vessel at current prices there is always the possibility of a market drop at the back of your mind."
The broker concedes that "maybe" one of the reasons for a reduction in the number of transactions has been that "the market has been spoiled a bit by KGs and IPOs", contributing to the climb in vessel prices.
Yet there have clearly been plenty of noteworthy deals nonetheless, several of them involving Greeks at both ends of the negotiation. Asked for his pick of this year's crop, he singles out TOP Tankers' agreement with AM Nomikos Transworld to buy the latter's fleet of 15 bulk carriers for $ 475m.
In the end this transaction failed, but he also pronounces as "impressive" the recent capesize deal that has seen Quintana Maritime take two 2001-built 164,000-tonners from the NS Lemos group for $ 136.8m.
Source:, November 14, 2005 Lloyd's List

Greek fleet operators find IPO odyssey far from plain sailing
---When George Economou launched the first initial public offering of a dry bulk operator on the Nasdaq last February other Greek shipowners were quick to follow.
Mr Economou, founder and chief executive of DryShips, used Dollars 270m of proceeds from a heavily-subscribed offering to expand the company's fleet from six to 27 ships, with a total capacity of 2.1m deadweight tons. "I took the opportunity to go public because I thought the dry cargo market had fundamentally changed. After a long period of low returns, freight rates had risen to a new plateau," Mr Economou said.
Eight Greek-owned shipping companies, mostly dry bulk operators, have raised about Dollars 1.5bn this year through IPOs, mainly on the Nasdaq.
Greek operators of bulk carriers have benefited from sustained strong demand in China, and, to a lesser extent, India, for commodities such as iron ore, coal and steel products. The Greek-owned fleet, which accounts for about a quarter of maritime trade worldwide, has undergone substantial renewal, with companies investing more than Dollars 12bn since 2000 in new vessels.
Owners ruled out listing on the small Athens stock exchange "because of low liquidity, regulatory hurdles and the lack of international visibility", according to one chief financial officer.
But it has hardly been plain sailing for the Greeks. As freight rates plummeted and vessel prices fell, several IPOs were reduced in size and priced at a discount. Some companies opted for higher dividend payouts to attract investors. In spite of strong second and third quarter results, Greek shipping stocks have consistently traded below their offering price.
Two leading operators, Golden Energy and Capital Maritime, postponed IPOs after shares were provisionally priced at below net asset values. The decision by Goldenport, an Athens dry bulk trader, to become the first Greek shipping company to seek a listing in London has highlighted investor fatigue in New York.
"There were too many offerings, given that market dynamics changed dramatically after the first quarter, with a precipitous decline in charter rates," said Anthony Arygyropoulos, of Cantor Fitzgerald.
Freight rates have been firming up at lower levels, but are not expected to return to the highs of 2004. On the other hand, rates are still above seven and 10-year averages, while growth in global demand for commodities is projected to remain strong.
As interest wanes in IPOs, investment banks are promoting other specialised shipping transactions, such as so-called blank cheque companies. These are special purpose vehiclesthat hold investor funds for 12-18 months to finance aGreek operator's acquisition of a fresh fleet.
"If asset values in the shipping industry come down as predicted, investors in an SPV would have the advantage of buying into the market alongside an experienced Greek operator," said Allan Schwartz, a partner in Hellenic Millennium Capital Partners, a specialist financial adviser.
Star Maritime, a listed Greek shipping company, is looking to raise Dollars 200m from hedge funds and institutional investors through a blank cheque company. The funds would be invested in a fleet of dry bulk carriers, to be managed by a team from Ocean Bulk, an established Greek operator.
However, if freight rates improve Greek owners may quickly return to the IPO market in New York.
"Recent experience has shown that shipping listings aren't easy deals. But investors are catching up on the sector's fundamentals, so this will change when the cycle moves on and rates recover," said Chris Megalou, managing director at Credit Suisse First Boston.
Forward-looking Greek companies view a New York listing as a step towards ensuring participation in further consolidation of the sector. Cash raised from an IPO enables a company to leverage three times that amount in bank borrowing, resulting in rapid enlargement of fleets.
"When it comes to mergers and takeovers, the listed shipping companies will be much better equipped to get a deal done," Mr Megalou said.
Source: 16 November 2005, Financial Times, London Ed1,

Takeovers and IPOs bring bulkers out in landmark deals
---Greeks own a quarter of world bulk carrier market, writes Nigel Lowry in Athens- Monday November 14 2005
GREEKS are the largest bulk carrier owning nationality worldwide and have been keen on bulkers ever since their introduction to the shipping world in the late 1960s.
This contrasted with the continued decline of the conventional general cargo fleet, which diminished by 80 vessels over the same 12 month period.
Only 318 of these, aggregating 24m dwt, were under the Greek flag, however.
Once considered a mainly elderly armada, the Greek-linked ore and bulk fleet now appears well spread in terms of its age profile.
A typical Greek-owned bulker is liable to be 16 years old, the statistics suggest, although the fleet averages under 14 years on a dwt tonnage basis.
George Economou raised nearly $270m for his DryShips venture on Nasdaq early this year, subsequently growing the fleet to 27 bulkers, while Diana Shipping, another well-known Greek name, also hit the crest of investor interest in the dry bulk sector with a successful $210m IPO on the New York Stock Exchange.
Subsequently, a number of Greek companies strongly identified with the US have also come to the market, including the Zoullas family-led Eagle Bulk Shipping, Quintana Maritime, headed by chief executive Stamatis Molaris, formerly of Stelmar Tankers.
Tanker star Peter Georgiopoulos of General Maritime Corp fame moved into the dry bulk sector a year ago with his $420m purchase of a 16-strong fleet of bulkers from China, and this summer finally listed his dry company, Genco, on Nasdaq, raising $247m.
Newly formed GO Carriers raised the equivalent of $41m in listing on the AIM market of the London Stock Exchange, to acquire an initial fleet of panamax and handymax tonnage.

Greece's Aegean Marine plans U.S. IPO
---WASHINGTON, Nov 17 (Reuters) - Greece's Aegean Marine Petroleum Network Inc., which supplies and markets refined marine fuel and lubricants to ships in port and at sea, on Thursday said it is seeking an initial public offering of 10 million shares.
The company filed a preliminary offering document with the U.S. market regulator, the Securities and Exchange Commission, to indicate its intention for an IPO of common stock priced at $14 to $16 per share.
The company, based in Athens, has been approved for a listing on the New York Stock Exchange under the symbol "ANW" , according to the IPO prospectus.
Bear Stearns & Co. Inc. is the lead underwriter.
The company said it buys marine fuel from refineries, major oil producers and other sources and delivers the fuel with a fleet of bunkering tankers to end users such as oil tankers, container ships, drybulk carriers, cruise ships, naval vessels and ferries.
Its fleet includes seven double-hull and two single-hull bunkering tankers with an average carrying capacity of 4,700 dwt, or dead weight tons.
It said it had revenue, including sales of marine petroleum products and voyage charters from its cargo-carrying non-bunkering tanker, of $197 million in the six months ended June 30, up from $133 million a year earlier. Net income was $8.6 million, down from $9.3 million a year earlier.
It said it intends to pay quarterly cash dividends starting with 1 cent per share in March 2006.
The underwriters, which also include Johnson Rice & Co. LLC and Simmons & Co. International, will have an option to buy 1.5 million additional shares in the event of heavy investor demand.
Aegean Marine could raise as much $160 million in proceeds, based on the high end of the expected price range. It said it plans to use $45 million of the proceeds to buy secondhand double-hull bunkering tankers, $76.4 million for debt repayment, and the remainder for working capital and general corporate purposes. (Additional reporting by Joel Rothstein)
Source: By John Poirier 17 November 2005 Reuters News

Greece To Open 18,000 Miles of Coastline to Dive Industry
As a result of a campaign led by diver and government adviser Manilos Alifierakis, new laws have been drafted that will allow access to 18,000 miles of coastline, rather than the meagre 126 dive sites designated under a 2002 ruling.
Under the new rules, diving federations from other EU countries will be recognised (as was not always previously the case), but dive centres will have to apply for licences. Government adviser Manilos Alifierakis has said Greece is likely to create a system of marine parks in order to monitor and manage diving tourism in the future.
Source:, By Simon Rogerson, Posted Nov 18, 2005, 9:08 AM ET by Willy Volk,