Greek Shipping News Cuts
Week 30 - 2007
---The first six months of the year has been marked by big spending on big bulk carriers.
According to shipbroker Clarkson, $31.5bn has been spent by the world's shipowners on bulkers so far this year and the value of the dry-bulk orderbook could surpass last year's record set by the tanker sector.
Clarkson's sums reveal the lion's share of the investing in bulkers has gone on capesizes with 187 orders placed in the period. In the first six months of 2006 the 'popular choice' the tanker saw $23bn invested, a year that went on to see record ordering in this sector. But, in the second half of 2006, another $30bn was spent on tankers, for a total $53bn.
However, July has been a good month for capesize bulker orders and with prices rising past $100m a unit the tanker record of 2006 is in danger.
But, there has been renewed interest in small bulkers as the panamax and handy fleets are now being renewed. Still the prices of the smaller ships will require a huge increase in orders to balance the loss should capes lose their appeal. Also, the new yards in China which are now finding their feet building bulkers are expected to switch their interest to other ship types as they become more experienced in the art of shipbuilding .
The investment in newbuildings is more than matching that of 2006, when $116.6bn was spent on new ships of all types. In the first half of 2007, $75.8bn was spent on new ships.
As soon as there are reports that building berths are full new capacity comes on line,so capacity does not appear to be the problem it was once considered to be. Further, both builder and shipowner are more willing to now accept longer lead times in newbuilding contracts and now a four year lapse between contract placement and delivery is becoming more acceptable.
Clarkson estimates the current value of the orderbook at $304bn. Research head Martin Stopford said: "[This], to put it into perspective, is about the same as Greece's gross domestic product. Not bad for an industry that 10 years ago thought it was on death row."
Painting the Greek newbuilding picture for the first six months of 2007 has not been easy, according to newbuilding broker George Moundreas & Co. The specialist newbuilding contractor says information is fragmented and has been collected from various official and unofficial sources, and though it may not be completely accurate it does allow for certain basic conclusions to be made concerning the current status and future prospects as Greeks renew their fleets... and indulge in a certain element of asset play.
As reported in Newsfront July 6, Greek owners ordered just over 300 ships worth $16.83bn in the January/June period, with bulk carriers leading the way, 190 ships of 21.257m dwt worth $10.61bn. Energy carry ships accounted for 73 units over about 4.15m dwt worth $4.13bn. Thus looking at Clarkson's figures and those of Moundreas we see Greeks presently account for over 22% of the total investment in new ships.
Moundreas ultimately concludes that the total number of outstanding orders worldwide for Greek account on June 30 was close to 700 units roughly divided into 310 tankers, 280 bulkcarriers, 45 container ships, 32 LPGs and 33 ship types. This listing will soon change as tankers were previously ordered and now being delivered whereas bulkers are being ordered in great numbers.
Moundreas says the newbuilding activity of first six months compares to the whole of 2006, which "at the time was a record". The broker concludes that "if we adopt the method of projection to the end of the year, the 2007 total may be double that of 2006" while the investment, because "of the gradual increase in shipbuilding prices may prove to be even higher".
Moundreas further notes that details of a number of deals have not been made known, while a number of others is "pending on the issuance of the necessary guarantees or main engine and other machinery procurement by the builders". Some 150 of the 310 tanker units are chemical/products carriers ranging in size from 5,000 to 50,000dwt while on the bulk carriers side, a high percentage of ships on order are of cape size.
Source: Issue 29 (27 July 2007) of Newsfront Greek Shipping Intelligence newsletter.
Bulgarian tycoon, shipowners eye marine fleet sell-off
---Dnevnik.bg, Bulgaria - Jul 26, 2007. Local businessman Hristo Kovachki Thursday announced he will participate in the privatisation of NMB, Bulgaria's national maritime carrier, in partnership with Attica Group, an Athens-listed ferry fleet operator.
Talks are underway to create a 50/50 joint venture with the Greek company, said the Kovachki office. It has not yet been decided which of his companies will team up with Attica Group.
'Various options are under advisement but it is too early to say if we will take part in or not,' said Krasimir Kerezov, deputy chairman of the Chimimport managing board.
The Bulgarian Shipowners Association is also interested in the sell-off procedure. It will most likely form a tie-in to that end.
The preliminary offers for a 70% stake in NMB are due by October 18.
The procedure is open to companies that had time-chartered bulk or/and general cargo vessels with a tonnage of 1.3 mln DWT in each of the past 3 years. They will have to produce a letter of intent for financing from a commercial bank rated at least A3 by Moody's that has loan-financed the purchase, construction or repair of sea vessels to the total amount of 3 bln euro.
The procedure is also open to consortia between a strategic investor and other parties wherein the strategic investor controls 70% of the partnership.(Dnevnik)
Greece is the word
Source: Posted on Mon, Jul. 23, 2007, http://www.kansascity.com/business/story/201792.html
Hellenic Seaways listing is imminent
---ANA, By Nikos Bardounias - Kathimerini
Coastal shipping company Hellenic Seaways (HSW) will be listed on the Athens Exchange at end-2007 or in early 2008, through a share capital increase via a public offering, said the company's main stakeholder Panos Laskaridis.
He added that the funds raised from the listing will be used for the further expansion of the company, which in the period 2008-2010 plans to invest -250 million. The new investment program of HSW envisages the acquisition of four state-of-the-art ships that will either be brand-new or relatively new.
In 2006, HSW was the leading player among coastal shippers with a turnover reaching -142 million. By mid-July the revenues of HSW showed a 12 percent increase over the previous year, before its new ships Nissos Chios and Ariadni began operating.
The company has also completed the refinancing of its borrowing with a new loan of -154 million on the most favorable terms in the Greek coastal shipping sector. HSW additionally acquires fuel that is 15 percent lower than current prices, through hedging contracts that protect it from the risk of oil price hikes.
Danaos Q2 Profit Jumps 95.6%; Declares Dividend [DAC]
---7/25/2007 9:50:25 PM Wednesday, Danaos Corp. (DAC) reported that its second quarter net income increased to $44.8 million, or $0.82 per share, from $22.9 million or $0.52 per share for the same quarter a year ago. Excluding a $15.7 million gain on sale of vessels, normalized net income for the second quarter 2007 was $29.1 million or $0.53 per share.
Operating revenue increased 6.3% to $63.8 million, from $60.0 million in the comparable quarter prior year.
On average, analysts polled by First Call/Thomson Financial expected the company to report earnings of $0.48 per share on revenue of $60.85 million.
Also, Danaos declared a dividend of $0.44 per common share for the second quarter, payable on August 17, to shareholders of record on August 3, 2007.
How Eagle Spent Its Summer Vacation
This serial acquirer and affirmed industry consolidator provided the basics of the deal in a press release and conference call yesterday. The fleet consists of 5 vessels of 53,100 dwt and 21 vessels of 58,000 dwt, which will be delivered between 2008 and 2012. Of the 26 vessels, 21 are secured by long-term time charters running through 2018 and of these 17 have an uncapped profit-sharing component. In round numbers and presuming the vessels are re-delivered at the end of their respective charter periods, the tenors from delivery vary with nine vessels fixed for about 10 years, four fixed for about 7 years, eight fixed for approximately 3 years and five as yet unfixed. It is important also to note that these charters were fixed for ward from periods ranging from a minimum of one to as long as five years out if not longer. A clearer picture of the impact of this deal on the visibility of revenues is shown in the graph, which plots owned days versus contracted revenues.
The benefits of this deal are manifold. With the certain fixed cash flow, Eagle has set and secured a quarterly targeted dividend of $0.50 per share over the long-term with the potential to increase it over time.Moreover the cash flows will pay down the revolver thereby providing for organic growth. The company grows its fleet to 49 vessels with an increased cargo carrying capacity of 2.7 million dwt. In addition, the average age of the fleet declines to two years while additional operating efficiencies result from the 41 sister vessels.
We have often questioned the ability of the full dividend model to grow as it effectively pays out all of its capital and is dependent on the equity and/or debt markets to grow. It seemed to us to be a variable bond although one can argue that an MLP might be a better characterization. A proponent of the model made an interesting case for the viability of the model by focusing on cash, reminding us of the negative carry of holding it on the balance sheet as well as the imperative today of returning money to shareholders. But this is a discussion better left for another time.
Being at the end of the call leaves one little to ask. Mr. Chappell of
JPMorgan askedMr. Ginsberg about the accounting for profit sharing.
In fact, the calculation will be made quarterly on an open book
basis and not indexed.
Another week, another billion dollars spent and all 100% debt financed. Notwithstanding that these are fine, well-managed companies, they, like all shipping companies, remain one trick ponies in a booming specialist market betting on China and increasing world trade which now may have more downside risk then upside potential. Just look at the tanker market today versus a few months ago and dare we commit heresy and mention the US housing market? And even though it is a mad, mad, mad world, can one afford to be left off the bus these days?
However, leaving aside the editorial remarks, what a fantastic deal for all the parties involved. We wonder what the odds would be for another groundbreaking deal, which could possibly eclipse this and the Genco transactions. Although extremely unlikely, none of us here are willing to take that bet in this market and we await further news during these purported summer doldrums.
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 2 6 , 2 0 0 7
Shares of Excel Maritime Hit High
---Shares of Excel Maritime Carriers Hit All-Time High on Charter Rate Increase, Ship Purchases NEW YORK (AP) -- Investors drove shares of drybulk shipper Excel Maritime Carriers Ltd. past an all-time high in trading Monday,on its purchase of two vessels late last week, and its continued fetching of above-average charter rates.
Excel Maritime rose $3.26, or 8.7 percent, to $40.68 in afternoon trading, after hitting an all-time high of $41.49 earlier in the session. Its previous all-time high was $38.01, which it hit last week.
Jefferies & Co. analyst Douglas J. Mavrinac said in a client note that Excel Maritime, along with TBS International and Genco Shippig, outperformed the sector last week on charter rates for their vessels.
Additionally, Greece-based Excel Maritime said Thursday it plans to buy two Supramax bulk carriers for a combined $126 million, bringing its fleet to 18 vessels. Both vessels will be delivered in the fourth quarter.
Charter rates for drybulk shippers -- which carry items including iron ore, grain and coal -- are currently at historic levels, driven by prt congestion and a growing demand for coal.
Mavrinac said Genco Shipping & Trading's announcement last week that it would purchase of nine new vessels provided an additional catalyst for drybulk stocks, "as the acquisition supported current asset values and signaled that one of the industry's leading companies continues to believe the fundamentals for the dry bulk shipping market remain very attractive."
Source: Monday July 23, 3:00 pm ET ,http://biz.yahoo.com/ap/070723/excel_maritime_mover.html?.v=2
Globus snaps up newbuilding
---GREEK-based bulk carrier shipowner Globus Maritime is buying a 53,500 dwt bulk carrier currently under construction at Yangzhou Dayang Shipyard in China with expected delivery in December US$57m. The vessel will be renamed River Globe and will fly the Marshall Islands flag.
With this acquisition the Globus fleet will expand to a total of seven modern dry bulk carriers, consisting of six handymax vessels and one panamax, with a weighted average age of approximately 10.9 years as at December 31, 2007 and with a total carrying capacity of 342,629 dwt.
Shipping Company Pleads Guilty to Vessel Pollution-Related Charges
FOR IMMEDIATE RELEASE
MONDAY, JULY 23, 2007
TDD (202) 514-1888
Shipping Company Pleads Guilty to Vessel Pollution-Related Charges
Engine room operations on board large oceangoing vessels such as the North Princess generate large amounts of waste oil. International and U.S. law prohibit the discharge of waste oil without treatment by an oil water separator. The law also requires that all overboard discharges be recorded in an oil record book, a required log which is regularly inspected by the Coast Guard.
This case is being prosecuted by John Irving, Counsel in the Environment and Natural Resources Division, Richard Poole Senior Trial Attorney in the Environmental Crimes Section, and John Sciortino Assistant U.S. Attorney in the Middle District of Florida.
US 'jumps the gun' in annoucing guilty plea
--- 27 July 2007 US government prosecutors have falsely claimed victory in a "magic-pipe" pollution case against shipowner Kassian Navigation, says maritime criminal-defence lawyer George Chalos.
The controversy comes after a week of apparent government breakthroughs in two such prosecutions of Greek shipowners.
But Chalos tells TradeWinds that the US Department of Justice (DoJ) has jumped the gun in publicly announcing a guilty plea by Kassian and a second engineer.
"The way they rush to announce victory is no different from the way the US Coast Guard [USCG]rushes their investigations," Chalos complained, describing the treatment of his client as "really unfair for a first-rate operator that has co-operated with the investigation from day one".
No deal is final, Chalos insisted after the DoJ released an announcement that Kassian had pled guilty and accepted $1.3m in fines and other payments over failing to maintain an accurate oil-record book.
Chalos, along with his father, Mike Chalos of Long Island's Chalos, O'Connor&Duffy law firm, is a frequent, visible and vocal defender of shipowners in US criminal-pollution cases and the Kassian controversy comes at the same time as a setback for a client.
TradeWinds has learned that a second engineer on Ionia Management's 45,000-dwt products tanker Kriton (built 1991) has agreed to plead guilty in a Connecticut court to four pollution violations from separate US jurisdictions in Florida, New York, the US Virgin Islands and Connecticut. The plea by Filipino second engineer Edgardo Mercurio, 42, is likely to be bad news for Greece's Kriton despite its lawyers' success on important procedural battles. Chalos recently succeeded in getting all proceedings transfered to one jurisdiction, the federal district of Connecticut.
The DoJ has also attempted but failed to block Chalos from admission to the Connecticut bar.
Further information on the Ionia case was not available before TradeWinds went to press.
Resonding by e-mail to telephone enquiries on the Kassian case, a DoJ spokesman confirms the district judge still must accept the deal that has been presented to a magistrate judge. The deal is final once sentencing takes place.
"Otherwise, the plea did resolve all pending indictments against the company," the spokesman said.
There was no response to follow-up enquiries.
Chalos is more accessible, especially on the subject of the DoJ's public announcement of a deal that, he says, is only in the works.
"This is absolutely appalling," said Chalos. "The deal was not done yet and the district judge has not accepted the plea agreement. This is a clear indication that the DoJ's real goal is to try to get another notch in its gun-belt, as opposed to protecting the environment."
If a Middle District of Florida federal judge objects to any part of a plea deal with Kassian, the plea is invalid and the case will go to trial with no guilty plea,he says.
Also at stake is the liberty of second engineer Spyridon Markou, 29, of Kassian's 71,000-dwt North Princess (built 1996). The panamax bulker was inspected in November 2006 at Jacksonville by the USCG, who found that the ship had been dumping bilge and waste water illegally and covering up the emissions with faked oil-log entries.
Markou is accused of making false statements to the USCG in connection with the investigation.
According to the allegedly premature announcement by the DoJ, Markou could be imprisoned for up to five years and fined $250,000.
However, TradeWinds understands that the parties have agreed that Markou may return to Greece after the next court hearing.
By Bob Rust , Stamford, published: 27 July 2007
Italy, Greece, Turkey sign gas pipeline deal
---Italy, Turkey, and Greece have signed an agreement to build a pipeline to bring natural gas from the Caspian and the Middle East to European markets, Italy's Edison gas company said Thursday.
"The gas pipeline will go into operation in 2012. It will help diversify gas supply sources, while promoting competition," a company spokesman said, adding that it is of strategic importance.
The agreement comes after months of negotiations on shipping natural gas from the Caucasus to Western Europe through Turkey and Greece.
The Turkish-Greek section is expected to begin operating in late August, while construction on the Greek-Italian link, owned by Italy's Edison and Greece's DEPA, should begin next year.
The pipeline will include a 212-kilometer undersea connector from Greece to Italy, worth an estimated 300 million euros, and should carry some 11 billion cubic meters of gas a year to Greece. - RIA Novosti
Source: Submitted by Dinka on Thu, 2007-07-26 15:10. , http://www.huliq.com/28343/italy-greece-turkey-sign-gas-pipeline-deal. Posted under: Business gas supplies Greece Italy natural gas Natural Gas Pipelines Turkey