Greek Shipping News Cuts
Week 44 - 2006


Greeks remain on the selling side in the S&P Market

---03/11/06: Greek shipping companies appear to be holding their strengths waiting for better deals in the coming weeks. In the meantime, some of them continue to seize the opportunity to sell older tonnage at attractive prices.
On the buying side, Moundreas highlighted the probability of Greeks, having bought the small bulker (30,00-dwt) Gunay A, built in the UK, from Densan Deniz for $4,7 million.
(Nikos Skenderoglou, Hellenic Shipping News)

2/11/2006, by Harris Vafias
Aggressive clipper ordered twelve 30,000 dwt handy bulkers in tsuji yard in china while jinhui went to oshima for one 54,000 dwt bulker costing 3,48 billion yen. NJ Goulandris agreed with tsuneishi to build four 82,000 dwt kamsarmaxes for $40 mill each while WMS shipping ordered two 1,700 teu feeders in wenchong and Qatar navigation ordered one 1000 teu feeder in daesun.

Chinese eyes are smiling
---EUROPEAN shipyards are having to redouble their efforts to stave off competition from East Asia. Signs of a growing battle emerged as a splash of deals hit the market last week.
Menacing the European shipyards in particular are the Chinese, who should be glowing with pride while Europeans quake in their boots. The reason for their growing sense of self-confidence is a stack of new orders announced in the past week.
First, China Shipping Haisheng has placed a new order for two 57,300dwt bulk carriers at Bohai Shipbuilding. The total contract is worth about $45.2M, with the vessels due to be delivered in September and December 2009.
Qingdao Hyundai confirmed orders for several 5,500dwt tankers from Aegean Bunkering Services in Greece. The owner ordered nine similar ships from Qingdao Hyundai in January of this year. During the same week, Hudong- Zhonghua won four tankers from Polembros Shipping of Greece. The 105,000dwt vessels are worth $60M each and will be delivered in 2009.
Rising costs and market uncertainty resulted in the deal, but Greek interest in Asia is widespread. Two weeks ago, Greek owners such as Metrostar, Mamaras and Minerva firmed up orders for varied tankers at Hyundai Samho shipyard in South Korea.
Continuing the AHTS theme, Houston shipowner GulfMark Offshore is rumoured to have ordered a vessel from Jaya Holdings in Singapore. The $20M vessel will reportedly be delivered in 2008.
Another major rumour last week involved MSC, which confirmed it is in negotiations to enlarge 16 of its 9,700teu container ships to accommodate 13,000teu. The shipowner is thought to have approached Hyundai HI, Daewoo and Samsung to enlarge the vessels.
The orders would divide up as eight vessels to Samsung and four each to Hyundai and Daewoo. Confirmation of the orders, however, is still pending.
Source: Newbuildings, Fairplay International Shipping Weekly, 02 Nov 2006

Funding coastal shipping
---NIKOS BARDOUNIAS. The interest of many banks in funding the investment plans of many coastal shipping companies has now been rekindled, particularly concerning listed companies and Hellenic Seaways (HSW).
The financial reports of those firms are showing significant improvement, while their banking obligations were reduced, in the first half of the year, by a third within four years, falling to 1.4 billion euros from 2.1 billion euros in 2002.
Local and foreign investors who are particularly interested in investing in coastal shipping are reportedly joining forces with banks, from Greece and abroad, and are exerting pressure in favor of accelerating projects that had already begun and as regards the possible cooperation or even merging of shipping companies. The aim is the creation of two big groups whose size will be similar to those in Europe, so that investing in them will entail less risk.
In the first half of 2006, according to the financial figures of listed firms, their liabilities declined as follows:
- Attica Group, including Blue Star Ferries, had long-term obligations of 437.3 million euros and short-term debts of 47.6 million euros, a total of 484.9 million euros.
- Minoan Lines had 412.7 million euros in long-term obligations and 66.6 million euros in short-term, totaling 479.3 million euros.
- ANEK had 276.8 million euros long-term and 34.4 short-term obligations, 311.2 million euros in total.
- Maritime of Lesvos (NEL) had long-term obligations of 62.5 million euros and 8.1 million euros in short-term debts, a total of 70.6 million euros.
All five listed companies had 1.189 billion euros of long-term debts between them, along with 156.7 million euros in short-term debt, a total of 1.346 billion euros.
Several ships have been sold since 2003: six Superfast vessels of the Attica Group, five ships of Blue Star Ferries and four vessels of Minoan Lines.
Both listed and non-listed coastal shipping companies have received bank loans in order to develop their fleets. Some 71 percent of the 1.4 billion owed by companies concern debts to foreign banks, with the remaining 29 percent owed to local credit institutions. XRTC data shows that 92 percent of bank loans go to listed firms.
Xiradakis believes there now is a momentum creating opportunities in the coastal shipping market, summarized as follows:
- Administrations of high quality and momentum with long experience in management practices in tough market conditions. New realistic structures of loan deals have been realized after the completion of loan repayment. The government, with its shipping policy, aims at the upgrade of port infrastructures.
- Entry of private entrepreneurs as strategic investors and shareholders and the liberalization of fares from the port of Piraeus.
- There is room for further mergers and partnerships, creating strong groups ready to respond to the increasing competition.
Source:, 30 October 2006

---Shipping portfolio could rise by more than 50%, writes Nigel Lowry in Athens- Friday November 03 2006

Consolidation clash
---The consolidation debating club are left to right Basil Mavroleon, John C Lyras, Trond Harald Klaveness, Angeliki Frangou, Nikolas Tsakos and Philip Embiricos.
The Greek shipping community has sided against consolidation as its best option for its success in the future.
Such was the conclusion this afternoon at the Greek Shipping Summit in Athens where 200 delegates were asked on weather they believe consolidation is a necessary and desirable goal for the successful future of Greek shipping.
Their vote was cast after listening to a parliamentary style debate with motions for and against. Two thirds of the floor voted against consolidation, while a large proportion remained undecided.
One of the most compelling speakers against the motion was Lyras says he is against consolidation if it means that Greek shipping abandons its prevailing family based propriety/entrepreneurial model in favour of a corporate model.
The owner says policy makers, the media and to a large extent financial institutions are prejudiced in favour of large corporate shipping structures.
Lyras says that big companies that have eventuated from a series of mergers and takeovers are no more profitable or achieve better charter rates than a Greek owner who controls a fleet of 10 ships.
A running theme for all three speakers is the traditional argument that when a fleet exceeds 10 ships it then becomes difficult to maintain. The direct hands on approach of Greek owners is what has given them their competitive edge.
All three speakers also extrapolated on the virtues of the fast the decision making process in a small company that is not bound by board approval for decision that have to made on the spot.
Speakers for the motion of consolidation were Angeliki Frangou CEO of Navios Maritime holdings, Trond Harald Klaveness CEO of Torvald Klaveness group and Nikolas Tsakos CEO of Tsakos Energy Navigation.
Klaveness argued that consolidation enables companies save in management costs and create an efficient information and performance tracking system.
Consolidation he says brings structured knowledge about the market that has been instrumental for the Torvald Klaveness group when analysing its charter exposure in both the physical and freight future markets.
Frangou argued that the market will inevitably move towards consolidation especially in the bulker sector given its highly fragmented profile.
Consolidated companies she says have better access to cheaper capital and this is main driver for the trend. Whether people like it or not the Frangou argued, unless owners in Greece do not create scales of economies, then other shipping nations will and Greeks will be adversely affected.
By Yiota Gousas in Athens, published: 19:07 GMT, 03 November 2006 | last updated: 19:20 GMT, 03 November 2006
[ was present at the Greek Shipping Summit and noted that in a room full of almost 200 people only a total of 50 persons voted: 18 for and 32 against ]
Source:, 3 Nov 2006

Greek Shipping Summit 2006 - Consolidation Debate: Speech by John C. Lyras
Let me start by making two clarifications: Firstly, I am not against this motion if by consolidation we mean that Greek private shipping companies currently owning and operating one to three vessels should preferably own and operate more: I am against consolidation if it means that Greek Shipping should abandon the currently prevailing private family proprietary/entrepreneurial model of business organisation in favour of the corporate model with its concomitant culture and ethics.
Secondly, by Greek Shipping I understand overwhelmingly tramp bulk shipping and much less specialized or liner shipping. In the latter and especially liner shipping consolidation has already occurred starting in the post colonial era with the conference systems which still enjoy immunity from competition rules in some parts of the world, followed by consortia which enjoy the same immunity and ending with the mega mergers of the last 15 years in line with the predominant trend in most major sectors of the global economy. No doubt it is this trend that makes our current debate relevant for it poses the question how can the little guys stand their ground against the big bodies to put it simply and picturesquely. Well in my opinion they can and they should. I now intend to demonstrate why notwithstanding the simple observation that if consolidation were indeed necessary and desirable in our sector it would have already occurred.
In the first place, I acknowledge that there is a definite prejudice in our times in favour of large public corporations and especially the largest in terms of the preferences of the policy makers, the economic media, and to a large extent, financial institutions. It is the large and largest corporations that have better access to and influence on policy makers, that get reported on by the media, that are usually preferred by financial institutions and investors and therefore better attract the attention of the general public. Yet even in the U.S. less than 50% of GDP is generated by the companies quoted on the major stock exchanges. The rest is generated by all the little guys. The percentage in other developed economies is lower still, sometimes much lower.
Furthermore, it is this non-separation of management and ownership which the proprietary/entrepreneurial model literally embodies that constitutes the crux of its additional virtues, namely adaptability, flexibility, quick decision making and not least, high motivation. All of which are ideally suited to a sector that is unpredictable, volatile, risky and which requires resourcefulness and a variety of skills. These virtues become much more opaque and some are lost altogether when a traditional shipping company becomes too big or when it separates the ownership from the management and especially when it does so by going public and thereby adopting a corporate identity.
I would now like to briefly discuss three areas where it is considered that the little guys will be increasingly encroached upon by the big bodies: competitiveness, profitability and access to capital. Regarding competitiveness we all know that economic text books consider tramp bulk shipping as one of the last and a major example of a perfectly competitive market because it fulfils two essential prerequisites. Namely a very large number of players and ease of entry into and exit from the sector or, put another way, the absence of significant barriers to entry. As a result, during the twenty years between 1980- 1999 whereas the value of world trade grew by more than 12 % per annum, total freight costs during this period only increased by 7 % overall. It seems obvious enough that consolidation in the bulk sector will not lead to more but to less competition and we have seen this already in the liner sector. So on this point it is the competition authorities around the world and the advocates of mega mergers who should be called to account for they are living in sin. Furthermore the competition in a perfect market is benign in the sense that if a little guy fails the social and economic repercussions are mild whereas as we have seen repeatedly in recent years if a mega corporation fails the repercussions are so severe that they are usually bailed out one way or another with the direct or indirect assistance of governments. What kind of free enterprise capitalism is that I ask you? Definitely more sin here too.
Regarding profitability I have already claimed that larger or corporate shipping companies are not necessarily more profitable than smaller private companies solely by virtue of their size. More importantly however is a question that pertains to the ethical dimensions of business and which in my opinion cannot be overlooked. Namely, how much profit is enough profit? In public corporations that question cannot be asked for it is considered axiomatic that unless profitability is increasing at least on average, then the company is a failure and must cease to exist. And it is this dubious axiom that fuels the drive toward more and more mergers and acquisitions and the establishment increasingly of oligopolies if not effective monopolies. Is this a good thing for the average citizen of this world? I say no and that those who say yes actively or by default are also living in sin. The little guy proprietor/entrepreneur on the other hand can ask himself the question and answer it according to his own judgment for he has no shareholders, analysts or potentially hostile investors to hold him to account and can survive making less profit than his co-competitors whose comparative success furthermore he does not have to begrudge as long as he can keep his bankers relatively happy.
Which brings me to the last point, namely access to capital. No doubt the consolidation and mega mergers in the banking sector and the influence of the corporate model as well as the lack luster performance of shipping for many years and until recently have made it harder for the little guys to obtain the necessary and quite substantial financing required for an ongoing shipping concern. However, the recent dramatic change in fortunes in shipping and the huge investment activity in newbuildings has demonstrated that shipping will always remain a potentially major sector for financing institutions who understand its characteristics. It might be somewhat easier for the big bodies to access capital but I dare say less profitably from the point of view of their providers so it is in the interest of the financial institutions to make sure that the little guys continue to exist in numbers and I m confident that they are and will remain capable of perceiving this interest.
Mr John C. Lyras, is a principal of Paralos Maritime Corporation S.A., and has been involved in shipping since 1975 in London and 1979 in Piraeus. He comes from a Greek seafaring family with a tradition in shipping that goes back four generations.
Mr Lyras was President of the Union of Greek Shipowners, from 1997 until February 2003, having been a Member of the Board since 1979 and Vice President from 1991 to 1996. He remains a Member of the Board and Chairman of the Foreign Affairs Committee. Mr Lyras is also a past President of the European Community Shipowners' Associations (ECSA) 1995 - 1997, having served as their Vice-President (June 1991 - 1994).
He is also a founder Member of HELMEPA, the Hellenic Marine Environment Protection Association. A former Vice-President of the International Chamber of Shipping (ICS), Mr Lyras served on its Executive Committee for eight years, and is currently Chairman of its Shipping Policy Committee. He is also a Member of the Greek Committee of the American Bureau of Shipping and of Lloyd's General Committee.
Source:, November 3, 2006, Hotel Grand Bretagne, Athens

Greek & Turkish Class Societies to knock on AIAC's door
---The Greek and Turkish classification societies have renewed their attack on the 'closed shop' stance they claim is being enforced by leading members of IACS. Leaders of the Hellenic Register of Shipping (HRS) and Turk Loydu Vakfi (TLV) have vowed they will combined their efforts to win recognition by IACS on "quality grounds" while slamming the "quantity criterion" demanded by IACS.
"It is unacceptable. IACS must apply quality criterion not quantity when judging a classification society," said Turkish Chamber of Shipping president, Metin Kalkavan. "We must breakdown the monopoly in IACS for it is our ships that are making them what they are," said Kalkavan, a leading Turkish shipowner. He said that it is not easy outside IACS and "we support the efforts being made by HRS to win full IACS recognition".
He was speaking after the signing in Piraeus of a bilateral agreement between HRS and TLV which, in the words of HRS md, Costas Chiou "seeks to both widening and expanding the fields of mutual interest, technically and geographically".
HRS has long been determined it be given the recognition it deserves as an approved European Union classification society. The Greek class society was the first non-IACS member to win EU approval, which means it is subject to the same auditing and quality-control criteria as the world's largest societies. The management of HRS feels so strongly about the lack of recognition from the European Union and other societies it has taken its case to Brussels and to London.
HRS has long recognised it will never be able to meet the quantity requirements to be a member of IACS, but says that qualitatively it is on a par, as is proved by the fact it meets the conditions of an EU audit each two years, just as the IACS members have to do and works closely with the US Coast Guard.
Marine ministry secretary general, John Tzoannos, said the agreement has great significance for overall maritime safety and prevention of accidents. He also saw it as strengthened the establishment of maritime clusters in the region. Tzoannos said the agreement was a plank in bringing the countries together at the European and Imo level.
George Gratsos, president of the Hellenic Chamber of Shipping, (HCS) also saw the agreement as helping "create a critical mass in this region particularly in the R&D sector".
A Yucel Odabasi, chairman of Turk Loydu said the society offered a "boutique service" of the highest quality to shipowners, and noted that under the agreement, owners can enjoy dual class.
Source:, 3 November 2006 Vol. 7 / No. 41

Russian firms to share control of Bulgaria-Greece pipeline
Three Russian companies will split a 51 percent stake in a long-delayed pipeline to pump Russian oil from Bulgaria to Greece, the head of Russia's pipeline monopoly said, news agencies reported.
The share will be split equally between Transneft, state oil major Rosneft and state-controlled Gazprom Neft, he was quoted by RIA-Novosti as saying.
Negotiations between Russia, Greece and Bulgaria over the Burgas-Alexandropoulis pipeline to the Aegean Sea have lasted 14 years.
Bulgaria had insisted that the three countries hold equal shares in the project of 33 percent each, while Russia insisted that its companies have a majority stake.
Vainshtok said that the Greek side had also backed off of previous demands to be financially compensated for being limited to splitting a 49 percent share with Bulgaria.
Aimed at avoiding the shipping through the busy Bosporus Strait, the project will transport oil across the Black Sea from the Russian port of Novorossiysk to the Bulgarian port of Burgas.
The oil will then be pumped from Burgas overland to Alexandropoulis in northeastern Greece. The project is expected to cost about $900 million (709 million euros) and transport about 35 million tons of oil per year.
Source:, Thursday, November 2, 2006, MOSCOW - AFP