Greek Shipping News Cuts
Week 04 - 2006


Plan for port modernization has role for private sector

---Economy Minister Giorgos Alogoskoufis (left) discussed the improvement of Greek ports with Merchant Marine Minister Manolis Kefaloyiannis yesterday.
Source:, ANA, Date: 1-27-2006

Shipping industry challenges EU directive
--- A broad coalition of shipping industry organisations has brought legal proceedings to test the validity of the EU Directive on Criminal Sanctions for Ship-Source Pollution.
With INTERTANKO as lead applicant, the industry coalition contends that under EU law the Directive is invalid on the grounds that it conflicts with international law.
The application to the Administrative Court in London names as Respondent the Secretary of State for the Department for Transport and it was served at the end of last month. It follows the precedent of similar cases in which the aviation industry has challenged EU legislation by proceedings started in London and referred to the European Court for a ruling.
Representing a broad cross-section of shipping industry interests, the coalition contends that the Directive, if implemented, would put EU member states in breach of their treaty law obligations under the International Convention on the Prevention of Pollution from ships 1973 (MARPOL) and the United Nations Convention on the Law of the Sea 1982 (UNCLOS). The Directive would result in criminal sanctions for accidental pollution in cases where liability is excluded by international law.
The coalition also maintains that the Directive is flawed because its test of liability is not sufficiently clear for penal legislation, and because it fails in various other respects to satisfy the Community principle of legal certainty.
In statements filed with the application the coalition stresses that it is fully committed to safe transport, cleaner seas, and effective measures to achieve further improvements in the prevention of pollution from ships. However the coalition is clear that the Directive will not contribute to these objectives but will have a counter-productive effect, notably on the retention and recruitment of quality crews, and on the roles of classification societies, salvors and others concerned with ship safety and protection of the environment.
Mr Stephen Van Dyck, Chairman, INTERTANKO.
Dr Peter Swift, Managing Director, INTERTANKO
Mr Epaminondas Embiricos, Chairman, Greek Shipping Co-operation Committee
Mr Roger Holt, Secretary General, INTERCARGO
Dr Peter Swift, Managing Director, INTERTANKO
Mr Michael Lacey, Secretary General, International Salvage Union
Source:, 24 Jan 2006

Praise for Port Administration but criticism for Minister
---Under pressure Piraeus Port Authority (PPA) md, Nicos Anastassopoulos, has received a vote of support from the Piraeus-based ship agents body, the International Maritime Union of Greece, while Marine minister, Manolis Kefaloyiannis has been criticised for refusing to listen to the agents.
Praising Anastassopoulos' efforts to maintain a working peace in Greece's largest port, IMUG president, Spyros Angelopoulos said: "Nicos Anastassopoulos is making a great effort to keep the balance in the port." However, Angelopoulos turned on the minister maintaining he has "never even agreed to listen to our views and then make his own judgement on them".
Speaking at the Union's pita cutting, Angelopoulos claimed that although Piraeus port is a key element for the Greek economy, the "government it not treating it as a priority" and is listening to the views of bodies that have "a small role in the overall activities of the port" which is seeing a steady reduction in traffic.
Angelopoulos agreed services in the port have improved, but said this is because there is lesstransit movement as cargo is going to other ports, not Piraeus. He said the cargo now being diverted to other ports by liner company MSC, Piraeus' biggest customer, was a direct result of strike action by dockers in the summer of 2005, and it is unlikely volume lost will be recovered.
He also warned Piraeus' ambitions to become a major cargo centre will not be realised unless an intensive overhaul of the port's operations takes place. Indeed, he feared that unless there are changes, "nothing will materalised from the Chinese" despite the apparent success of Prime minister Costas Karamanlis' recent trip to China. During this trip the Chinese confirmed they are interested in developing cooperation with Greek ports and Greek shipping generally.
Angelopoulos said operation of the port's container terminal must be streamlined if it is to attract transit traffic. He criticised the lack of general maintenance in the port which he said has resulted in a great deal of the equipment sitting idle in workshops waiting to be repaired. Work practices have to be overhauled if productivity is to be improved, maintained Angelopoulos.
Source:, 27 January 2006 Vol. 7 / No. 3

Did players' greed curdle their milk?
---Shipping's triumph in the equity markets in early 2005 turned into disappointment for many shipowners and losses for most investors. Did greedy owners and bankers curdle their own milk?
A majority of experts says the answer is yes but it is carefully qualified. They contend that lame offerings were likely a much smaller factor than lame hire rates, especially in the dry-bulk sector.
"At the beginning of the year, people just wanted exposure to anything shipping," said Simon Rose, whose boutique bank, Dahlman Rose, was a supporting underwriter on six initial public offerings (IPOs). "As the year progressed, people got more confused rather than educated. By the end of the year, they were so confused about what they'd bought that they didn't want to buy anything."
Investors are accustomed to seeing an IPO trade upward on pricing. This confirms that initial investors got in at a so-called IPO discount from the stock's true worth, perhaps 10%. Yet as the year wore on, issue after issue traded down or, at best, flat.
"If you're a buyer who knows nothing else about shipping, all you know is that the last offering traded down when they said it would trade up," Rose said.
Anthony Argyropoulos of Cantor Fitzgerald, the underwriter who led the DryShips IPO, concedes that "a lot of deals were almost forced down the throats of investors". But he maintains that weaker freight rates were the dominant factor.
"That accounts for 80% of it in my opinion," he said. "The dry-bulk performance especially scared investors by showing them how volatile the market can be. There's been a 50% decline in rates and a 30% to 35% decline in asset values since the start of the year."
Argyropoulos has little patience for those who complain about the greed of owners and his fellow bankers.
He said: "That's what they said when the tanker companies were coming public. That's what they said when we were doing Stelmar. If you bought tanker stock in January 2000, it had increased 544% by the end of 2004.
"That's not too bad," he added. "Who's to say that can't happen with these companies?"
Still, some of the companies going to market in 2005, especially in dry bulk, have at their foundation what now appear to be bloated vessel valuations and rapidly expiring top-market charters that may not be possible to replicate in the near future. Investors still seem to be struggling to understand and differentiate between them.
For instance, shares in Eagle Bulk Shipping plunged 12% in one day earlier this month after an analyst called the stock overvalued. The plunge erased its gains for 2005 in one swoop.
In cynical circles, some observers are already comparing a number of the IPO companies in 2005 with the glut of junk-bond issuers of the late-1990s the ones who went bust or reworked their debt. But making such a parallel is a stretch, most agree.
"What is the same is you had owners cashing out their interest at the height of the market," said one banker of that era. "What is different is that these are equity companies. The initial investors may lose a lot of money here but the stock doesn't just go away."
Source:, , published: 27 January 2006

Dry shipping industry has a rocky crossing
Wait for the Year of the Dog
Industry specialists do not believe activity will pick up again until after the Chinese Lunar New Year, which begins Jan. 30 and ends a week later. Ironically, there are indications that China will face shortfalls in its plans to convert power stations to natural gas, and will have to import more coal. But this will not happen until the holiday is over. Other main shipping routes have also seen price drops, but not as dramatic as those in Asia. Rates for vessels transporting coal to Rotterdam from the world's second-biggest coal-export port in South Africa fell 1.4% to $10.83 a ton, according to the Baltic Exchange.
There are special factors hurting DryShips. There have been heavy rumors to support short selling from European sources in Norway and Britain. Two charges are being made against George Economou, the CEO of DRYS -- one more or less true, and the other unfair.
According to the initial public offering prospectus, DRYS, when it raised money, was going to buy a fleet from companies associated with Economou and owned by Economou and his sister. This was spelled out in the paperwork and we must assume that, when the money was in hand, it was spent that way.
The reproach is not that Economou and his family cut their own risks with bulk shipping by selling the vessels to DRYS. The rumors say that DRYS overpaid. Looking at the price paid then, in May, and the price of ships today, you could argue that DRYS paid too much. But that is because the bulk shipping industry has fallen into an oversupply situation. That all happened before we bought the stock, and admittedly, I did not expect it to continue at these levels.
But it is extremely unfair to say that George Economou expected the current, possibly temporary, shipping glut, either. We know this is a risky business, but in December when I met him, Economou expected the supply of shipping to dry up from the levels it had reached.
Wait for the Greek to make money
The second charge against Economou is even more unfair. About a decade ago, Economou used a different company to raise money for his first shipping fleet, called Alpha.
The company did not issue stock. A consortium of largely Swiss banks sold junk bonds issued by Alpha to European institutional investors. The shipping market collapsed in the following months and the underwriting banks repurchased the bonds from institutions at fire-sale prices. Then Economou made a settlement with the banks in which he paid more than they had -- 37 cents on the dollar -- to redeem the bonds and take back control of the ships. This took place on the Isle of Man, another of those funny places where shipping companies are incorporated. While Economou got, in effect, $1 worth of ships a few months later for every 37 cents he spent, the banks still made far more money out of the deal than he did.
Why does Economou draw so much attention? First, possibly because his shares pay shareholders less than the rivals had to pay. These are all family-controlled businesses, and none of them is particularly ethical. They are very competitive and all are incorporated in funny-money places. All international shipping companies, not just the Greeks, incorporate in exotic places such as the Marshall Islands, Liberia, etc. This is the norm in international shipping. The Marshall Islands in particular, where DryShips is incorporated, is U.S. Territory.
DryShips is the most liquid of the dry bulk stocks and until a few days ago (when Diana Shipping announced it would trade options), it was the only dry bulk company with options traded. People may have been shorting the stock because it is liquid and because of its exposure to the spot market.
Unlike Jacqueline Kennedy, I do not want to marry a Greek shipping tycoon. I just want to give him a chance to make money for me with his stock. Take a longer view.
Source:, Global Investor Vivian Lewis, Journal: Friday, January 20, 2006

LR awards OSG fleet Ballast Water Nnotation

Cost of addressing TMSA - Is it primarily a training problem?
---It is beginning to be widely accepted that there will be a significant cost to justifying the good practices of in house management in accordance with TMSA stipulations.
Figures of $50,000 to $70,000 per vessel have been discussed. This is seen as a high price to pay for those who have continuously been trying their utmost to provide an economic and demonstrably responsible service.
Changing perceptions from due diligence in one area to due diligence in another.
Those of us, who have done their best over the years, feel the most concerned about the prescriptive stipulations, which can be seen to overlook the vast efforts to make ships economical to run. Since the mid-seventies economy was the item that occupied the focus of fleet managers. It is difficult to reprogram an entire generation to forget what they spent their working life learning, in a never-ending uphill battle against rising costs through legislation etc.
It has also been widely discussed that the money spent in addressing TMSA will be partly spent on a cultural change.
By cultural change what the industry really means is realignment of priorities.
Source: press release, Ulysses Systems,20 jan 2006,

21 today but snubbed by the Onassis trust
---WHEN Athina Onassis turns 21 today there will be no birthday card and no celebratory call from the philanthropic Onassis Foundation, the other half of the fabled fortune she formally inherits.
For the fabulously wealthy heiress, charity is in short supply.
"We will not be making any comment, answering any questions or giving any interviews," the foundation's spokeswoman, Barbara Charamis, said. "Oh, and is it really [her birthday]?"
Barely six weeks after marrying Brazilian showjumper Alvaro Alfonso de Miranda Neto, the Onassis dynasty's sole survivor will mark the day with friends in Belgium where the couple, both competitive horse riders, are training.
But with the battle for control of the $1 billion foundation looming, Ms Onassis may also celebrate by plotting her next legal move. Under rules drawn up by her grandfather, the shipping tycoon Aristotle Onassis, the reclusive heiress was to succeed her late mother, Christina, and take over the foundation on her 21st birthday.
The woman once dubbed the "poor little rich girl" came into her family fortune aged 18. Estimated at $1 billion, the estate included an oil tanker and business empire, priceless art and properties on three continents. But assuming control of the other half of the fortune, bequeathed by her grandfather to a charitable fund set up in memory of his son, is about more than money.
Chairing the foundation would allow the Swiss-educated Athina Onassis to make millions of dollars' worth of charitable donations in Greece and have a say in the life of the land of her forefathers. Her compatriots are keen that, as the last of the "golden Greeks", she does so. But the foundation appears as determined to prevent her.
Last year its four administrators abruptly changed its founding charter, abolishing the heiress's automatic birthright to the post on the grounds that she knew neither the country nor its language. Instead, said Antonis Papadimitriou, its new president, she would "have to stand in line and apply" for the position.
Ms Onassis was raised speaking French to her father, Thierry Roussel, and Swedish with her stepmother. As she approaches 21 she has tried to reclaim her Greek ancestry.
She has hired a Greek language teacher, enrolled at a riding school in Athens and, with her husband - who has applied for Greek citizenship - wants to be in the Greek Olympic equestrian team.
The wrangling over the foundation follows years of similar battles between her father and its older generation of executives. To show she means business, Ms Onassis has hired a team of London lawyers.
The Guardian
Source:, The Guardian, By Helena Smith in Athens, January 29, 2006