Greek Shipping News Cuts
Week 28 - 2007
---With little fanfare, Greece has become one of Europe's best-performing economies and stock markets.
Greece, birthplace of the Olympics and home of ancient relics and honeymoon hideaway isles, is noteworthy for another reason. Over the past ten years its gross domestic product has grown at an annual rate of 6%, putting this economy far ahead of three of the largest European Union economies (Germany, France and Italy).
In 2000 Morgan Stanley (nyse: MS - news - people ) Capital International, which tracks global stock markets via hundreds of indexes, promoted Greece out of the emerging-market category. The catalyst for this change: Greece's 2001 entry into the eurozone, which had imposed strict fiscal and monetary policies. The MSCI Greece stock index has a 12-month total return of 42%, a tad ahead of 41% for the MSCI Europe index.
Greece can now capitalize on its central Mediterranean location, says Harris Siganos, a managing director at Alpha Asset Management in Athens. One way is with ships. Over the past four years Greek shipping companies have benefited from increased trade with China and India, and freight rates have more than doubled. Today the shipping industry leads tourism in fund inflows from abroad. Greece has 3,800-plus ships of 1,000 tons or more, the largest fleet in Europe and the fifth largest in the world. Helped by cheap bank financing, shippers have at least 260 new vessels on order.
Danaos Corp., which listed on the New York Stock Exchange at the end of 2006, is the country's eighteenth-largest maritime shipper by vessel tonnage. Its container ships are less exposed to the volatility found in bulk cargo. Profit in 2006 was down 18% to $101 million, on revenue of $245 million. The company attributes the decline in part to its investment in 28 new ships, 8 of which are already under 10- to 15-year contracts.
Tsakos Energy Navigation (nyse: TNP - news - people ), Greece's third-largest shipper by tonnage, trades on the New York Stock Exchange. Last year sales rose by 45% to $428 million and net by 21% to $196 million. As of March Tsakos, which specializes in the more volatile oil tanker market and recently added a liquefied natural gas carrier, had nine ships under construction.
Two of Greece's big banks provide exposure to southeastern Europe. National Bank of Greece (nyse: NBG - news - people ) is the country's largest banking group and recently made a big acquisition in Turkey. Net income for 2006 was up 23% to $758 million, 20% derived from abroad.
Alpha Bank, with $12.8 billion in market capitalization, has been expanding in Romania and Bulgaria. Last year 10% of net income came from abroad; the bank expects this to double in three years.
Consumer goods is another Greek sector with exposure to the Balkans. In the first quarter revenues at Coca-Cola Hellenic Bottling (nyse: CCH - news - people ) were up 18%, driven by growth in emerging markets such as Romania. With $7.4 billion in sales, Hellenic is the second-biggest Coca-Cola (nyse: KO - news - people ) bottler in the world.
Greece still cashes in on its sunny Mediterranean climate and 15,000 miles of coastline. Over 12 million tourists a year visit Greece (more than one tourist per inhabitant), contributing 17% of GDP. The government took advantage of the 2004 Olympics and its tourist traffic to open up the funding spigot for improving roads and railways.
Two companies listed on the Athens exchange offer investors an opportunity to take part in the building boom. Hellenic (or Elliniki) Technodomiki, which posted a 38% gain in first-quarter revenue, to $242 million, has a project backlog of $5.2 billion. Lamda Development, the real estate development arm of the billionaire Latsis family, is behind the two largest shopping malls in Greece as well as office and residential complexes. The company has announced plans to invest $520 million by the end of 2008 in Greece and the Balkans. Lamda sells for 14 times its 2007 consensus earnings forecast.
Source: Tatiana Serafin 07.23.07, http://members.forbes.com/global/2007/0723/110.html?partner=yahoomag
Greece Plans Ship Passenger Rights Bill
Legislation providing for a "passenger bill of rights" would be introduced in parliament in coming days, Merchant Marine Minister Manolis Kefaloyiannis said, and would take effect by month's end _ just in time for Greece's peak tourist season.
The provisions would apply to ferry and hydroplane passengers.
The bill of rights, modeled after established programs for air travelers, would grant passengers the right to claim compensation _ including money and free accommodation _ from coastal shipping companies for delayed or canceled boat trips and also for poor service.
The legislation would also require every passenger ship to have a medical doctor aboard.
Kefaloyiannis, who met Wednesday with Prime Minister Coastas Karamanlis, said companies could face fines of up to $687,100 if found to be in breach of the new rules. He also announced new investments for upgrading 11 ports around the country.
Greece expects more than 16 million visitors this year, and Kefaloyiannis said up to 7 million Greek and foreign tourists are expected to travel this summer by ship to island destinations from the three ports near Athens.
The largest of these, Piraeus, is chronically choked with passenger traffic in the summer months, while departures are frequently delayed because of tight scheduling and spotty ship maintenance.
Source: The Associated Press July 11, 2007, 10:48AM, http://www.chron.com/disp/story.mpl/ap/fn/4959486.html
Ports set for flurry of investment
---Projects totaling 2.5 bln euros to be announced by September; major upgrade for Piraeus ferry facilities
By Nikos Bardounias - Kathimerini
This is the picture that Minister Manolis Kefaloyiannis conveyed to Prime Minister Costas Karamanlis in a meeting this week. Kefaloyiannis reportedly informed Karamanlis that an extensive program of projects is under way, aimed at improving and modernizing port infrastructure across the country.
Coastal shipping hub
Furthermore, he reported to Karamanlis on ongoing major projects to improve the port infrastructures at Iraklion, Corfu, Igoumenitsa, Alexandroupolis, Thessaloniki and Patras. By September the first stage of the port development at Tymbaki, in Crete, is also set to begin. This will allow Tymbaki to operate as a transit center for containers from Asia to ports in Europe, North Africa and the Black Sea.
Source: 13 July 2007, http://www.ekathimerini.com/4dcgi/news/content.asp?aid=85652
G.A.Gratsos: IAME ADDRESS 4/7/07
---I would also like to welcome you on the occasion of the annual International Association of Maritime Economists conference for 2007, which is being held, this year, in Athens.
Shipping is the most cost effective and environmentally friendly form of transport emitting only 1.4% of global emissions while transporting over 90% of world trade. Were it not for shipping, globalization and its associated benefits would probably never have occurred.
The world does not owe us a living. We can only go forward through vision, better understanding, and greater productivity even where we think we have a comparative advantage. Protectionist policies have failed miserably all over the world. Others, are always ready to benefit from our mistakes.
Shipping and tourism are important Greek industries. Both are globalized and cater to international customers, thus competition is intense. It is therefore very important that all policies relating to these industries and their repercussions be fully analyzed with a global perspective.
A case in point involving Greek cruise shipping is an apt example. Greek cruise shipping was among the first in the world. The first Greek cruise ship was chartered by the National Tourist Organization of Greece in 1955 to cruise and promote the Greek islands. Other than promoting local cruises, Greek operators expanded to the Caribbean, North Europe, the Arctic as well as coastal cruises around China a long time ago. The Greek cruise ship business all but disappeared because of one unfortunate decree, designed to protect the employment of Greek catering staff on board Greek flag cruise ships. Greek cruise shipping is only now being slowly resurrected.
The resultant losses to Greece were impressive.
Greece therefore, through the above misguided legislation, substantially reduced revenues greatly hurting the Greek economy. This (was done) in order to save certain jobs on cruise ships, the price of which passengers were unwilling to pay, which were eventually lost anyway.
There are similarities with the Greek controlled ocean trading fleet of which only about 30% flies the Greek flag.
Only through the widespread knowledge of fundamental notions such as how productivity, cost efficiency, globalization and marketing of goods and services, helps increase market share, create jobs and improve the growth rate of an economy, can we maximize the benefits to our country from our very substantial shipping industry.
Maritime economists, with their analyses and expertise, can investigate these or other scenaria to improve social understanding and guide political thinking. Similar events have already occurred in the past. As the world becomes more integrated and dependent on trade, their effect now will become far greater.
I expect the deliberations during this conference will shed light on many important aspects of shipping. I also hope you leave enough time to enjoy our historic and beautiful country.
President, Hellenic Chamber of Shipping
Panagopuloa sits tight while refuting talk of selling Attica
---Pericles Panagopulos has refused to comment on rumours said to be emanating from "within the capital market" that he intends to sell his interest in the Attica Group. Though the stock market and the ferry sector expect a move from Panagopulos, he says there is nothing to comment on.
Attica sold its 15.7m Minoan shares to the Panos and Thanassis Laskaridis-controlled Access Maritime at 6 a share. Access already held a 3.7% stake and Panos Laskaridis had a stake of just over 1% in the Iraklion, Crete-based Athens Stock Exchange (ASE)-listed ML.
Attica chairman, Panagopulos, notes Attica is a holding company, and "as such buys and sells shares when the opportunity arises". He said "money and satisfying shareholders was our motive" behind the decision to do business with the Laskaridis brothers.
With an estimated 200m in the coffers, following the sale of the shares plus the reduction of the Superfast Ferries fleet from 12 to just four ships, the possibilities for Attica are great. With the Superfast Ferries and Blue Star Ferries banners in its stable, Panagopulos has already denied rumours of a possible link between Attica and Minoan's Cretan rival Anek Lines. However, as Italy's Grimaldi and the Italian flag operator Tourship Italia enter the fray, the Greek marketplace is becoming ever more competitive, though the invading ships are operated under Greek legislation.
"Attica is unlikely to sit still for long, and one way or the other Panagopulos will make a move which will impact the whole market," said one analyst.
Source: www.newsfront.gr 13 July 2007 Vol. 8 / No. 27
PASOK leader meets with workers at Skaramangas Shipyards
---Main opposition PASOK leader George Papandreou visited the Skaramangas Shipyards on Monday, "in order to hear about, but also support the workers in their problems", as he himself told reporters.
The Skaramangas Shipyards, which have been fully privatised since 2002 and belong to the Thyssen Group, have announced 12 dismissals while a further 100 dismissals were anticipated, and, according to Papandreou, a further 300 employees were "living with the fear of dismissal".
Papandreou said that the preceding PASOK governments had supported the Shipyards, which he said were the largest shipbuilding and repair unit in the eastern Mediterranean, and accused the New Democracy government of disdaining the shipyard and of not caring overall either about the dismissals, nor about employment or the defence industry.
In addition, he said, the government owed the Shipyard 200 million euro from orders placed by the Hellenic Navy.
He said that the response to dismissals and competitiveness could not be cheap wages, as was the case in shipyards in China and Korea but, rather, investment in the human and innovation, which would also open up new roads.
"Whereas the Right leaves itself to the rules of the market, the difference is that we intervene and ourselves put forward the rules of the market in favour of the working people's interests," Papandreou said.
He also endorsed open, transparent international tendering for armaments, criticising the government of 'secret procedures', adding that despite the fact that the international trend was concentration of the defence industry, it was not possible that countries such as Greece did not have a developed corresponding branch, and called for integrated planning that would also include agreements with international consortiums as well as the development of programmes and linking with the European defence industry.
Regarding the dismissals, the PASOK leader noted the points in his party's platform concerning social labour and public sector support for dismissed older workers to help them meet the retirement requirements.
Papandreou also met with the Shipyards' management.
Angelopoulos strikes again
At the same time, reports are circulating of a five-ship capesize buy by Stamatis Molaris-led Quintana Maritime (see end of story).
The deal would represent Genco's first outing in the capesize segment.
Metrostar picked up the two SWS contracts in December 2006 for $87m.
Aktif ordered the first four ships just four months ago at $73m a copy and the other two in June for just under $80m each.
Market sources in both Greece and the US report having heard buzz of a big deal in the works for Genco for only a short time.
Genco chief financial officer John Wobensmith declines to comment on reports of the transaction.
At the same time, reports are circulating of a five-ship capesize buy by none other than Quintana. Some say Quintana is paying $550m for two ships built in 2006 and three in 2007, with all five reportedly set for delivery late this year. It was impossible to confirm the deal. Others feel there is confusion in the market between simultaneous deals being done by Molaris and Georgiopoulos.
One observer points out that such a deal by Quintana might make sense of the company's delay in announcing its $253.5m sale-and-leaseback deal last month, in which Norway's Glitnir bought seven panamaxes, with low values both on the sale and charter side of the transaction. The leaseback deal was slightly dilutive to earnings while a purchase would likely be slightly accretive, and the deals would have been neutral to earnings if unveiled to investors simultaneously.
By Bob Rust in Stamford
published: 20:11 GMT, 12 July 2007 | last updated: 07:55 GMT, 13 July 2007
Seanergy Seeks $150 million with Maxim
---We talked a lot about SPACs at Marine Money Week having over the last two years watched the BCC (Business Combination Company, or alternatively if you prefer, Blank Check Company) come of age. Furthest along is Navios, while Rand Logistics has also completed its acquisition. Star Maritime, currently in the midst of acquiring eight dry bulk carriers from TMT, is in the middle of the process while Excel Maritime-sponsored Oceanaut went public just this spring.
And so it is that this week we see a filing for yet another shipping SPAC, this one led by Georgios Koutsolioutsos and brothers Panagiotis and Simon Zafet. Led byMaxim Group and advised by Loeb & Loeb, Ellenoff Grossman & Schole and Reeder & Simpson, the new SPAC, called Seanergy Maritime Corp., is seeking to raise $150 million through the sale of 15,000,000 units at $10.00 apiece. Each unit consists of one share and one warrant; a warrant entitles the holder to purchase common stock at a price of $6.50. There is an overallotment option for 2,250,000 additional units while for $100.00 Maxim gets an option to purchase 750,000 units at $12.50 per unit.
Seanergy Directors & Management
Name Age Position
Georgios Koutsolioutsos 37 President and Co-Chairman of the Board of Directors
Panagiotis Zafet 41 Chief Executive Officer and Co-Chairman of the Board of Directors
Simon Zafet 44 Chief Operating Officer and Director
Alexios Komninos 41 Chief Financial Officer, Treasurer and Director
Ioannis Tsigkounakis 41 Secretary and Director
Elias M. Culucundis 64 Director
Roland Beberniss 65 Director
George Hamawi 67 Director
As a side note, Maxim is making its mark in the shipping SPAC space, having worked on the Star Maritime Acquisition Corp, Energy Infrastructure Acquisition Corp, and Oceanaut deals in the past two years.
Executive management prior to the offering purchased 11,600,000 warrants at $0.90/warrant, contributing an aggregate of $10.44 million in a Reg S private placement. All of the insider warrants to be purchased by the executive officers will be identical to the warrants in the units being offered to outside investors, except that none of the insider warrants will be transferable or salable until after they complete a business combination, are not subject to redemption if held by the initial holders thereof or their permitted assigns and may be exercised on a cashless basis if held by the insiders or their designees.
Of the proceeds from the offering and private placement, $150 million will be deposited in trust at Deutsche Bank Trust Company. This is to include up to $3.375 million payable to Maxim Group if and only if a transaction is consummated (out of $5.625 million payable to Maxim in total).
Management has outlined its intent to acquire one or more assets in the maritime or shipping industry, including a diverse group of shipping sectors as well as related service businesses. They have indicated a belief that investing in more than one sector of the shipping industry provides a hedge against cyclicality. However they also note that because they have considerable experience in other sectors, such as general transportation, commercial and retail trading and real estate, their pursuit will not be limited to maritime interests.
Shareholders will receive quarterly interest payments on the amounts held in trust until a transaction is completed, and will receive their full $10 plus any accrued unpaid interest in the event that a suitable acquisition is not found and the company is liquidated.
Directors and management are to retain a 20% stake in the company while 80% will be publicly floated. In addition to the $10.4 million for their warrants in a private placement, transaction insiders paid $25,000 for 3,750,000 shares in Seanergy and lent the company just under a half million dollars to fund expenses associated with the offering. Seanergy is incorporated in the Marshall Islands and headquartered in Greece.
Source: h t t p : / /www.ma r i n emo n e y . c om Ma r i n e Mo n e y F r e s h l y Mi n t e d T h u r s d a y , J u l y 1 2 , 2 0 0 7
Top Tankers going dry
Source: Fairplay Daily News12 Jul 2007
SHIPPING & THE MEDIA: When the oil hits the fan
The first thing to remember about media is that the maw must be fed.
First International chairman and Maritime Industry Foundation founder Paul Slater contrasts the proper handling of the Sea Empress spill in 1996 by John Fredriksen with media failures such as Erika and, more recently, the grounding of the Ofer-operated MSC Napoli in the UK.
Critics will clamour in the press, but ship operators must not take the bait.Yet another issue arises with deaths or serious injuries.
One perennial complication in devising a media crisis strategy is the conflict between the interests of public relations versus the P&I club and lawyers.
Among the questions faced by an owner or press liaison executive when a casualty takes place, according to Jim Lawrence (pictured) are:
Does the boss speak the language of the media in the country where the incident occurred?
Are cultural barriers a factor in the country where the casualty has taken place?
Is the liaison executive sufficiently charismatic for broadcast media?
How wrong can the press be?
Respond to media after a casualty in time for their deadlines
Ensure that executives several levels deep in the organisation are pre-emptively trained to deal with media queries
Invest as an industry in informing the public about shipping as an essential service
Evade media queries and give insufficient public response after an accident
Belittle the fallout from an accident in public statements or otherwise make a casualty situation even worse through wrong-headed comments to media
Turn up the heat by publicly engaging in rhetorical debate with environmentalists, politicians or prosecutors
Lie to media or omit details that will ultimately be uncovered
Source: Feature Fairplay International Shipping Weekly 12 Jul 2007