Greek Shipping News Cuts
Week 31 - 2008


Greece: Sharp drop in newbuilding activity does not tell full story

---In the first half of 2008 Greek investment in newbuildings was half that of the first six months of 2007, but that does not necessarily mean Greek shipowners have lost their appetite for new ships. A key reason for the turnround was a scarcity of newbuilding berths, according to shipbroker George Moundreas & Co, who also expects action in the newbuilding re-sale market.
In a half-year report, the Piraeus-based shipbroker shows Greek owners spent $8.2bn contracting ships compared to the $16.8bn in the first six months of 2007. In the latest half, tanker and bulk carrier tonnage contracted fell by half to 12.5m dwt from 25.3m dwt, while the number of vessels ordered dropped almost a third, to 119 from 303.
Head of Moundreas' newbuilding department, George Banos, says "the most important factor was a scarcity of newbuilding berths" making it difficult to secure delivery slots". However, the broker says "some reasonable hesitation arising from the potential effect the current banking crisis may exercise on the 'real markets' is another reason which cannot be ignored".
The increase in the ordering of VLCCs and other large ships in the first six months of 2008 helps explain why the decline in deadweight and investment is much less than the drop in the actual number of ships ordered. While the potential interest in the bulk carrier is still holding at a high degree, Moundreas says "we now see a revival is evident in the tanker field" and ponders if this is because of the forthcoming single hull 'phase out'. Further, "ruling prices are considerably higher than last year's levels" points out the shipbroker.
In the first six months of 2008, Moundreas reports 65 bulkers of 5.113m dwt, worth $3.696m, were ordered compared to 190 ships, of 21.26m dwt worth $10.61bn in 2007. Some 41 tankers of 7.37m dwt worth $4.16bn were ordered this time compared to 69 tankers of 4.1m dwt worth $3.35bn. Thirteen gas carriers of 102,800cumtr worth $387m were ordered in 2008, just one ship less than in the Jan-June period of 2007, but in 2008 the units were far smaller, as in 2007 the 14 ships totalled 402,600cumtr and were worth $780m.
Moundreas notes that while a number of substantial world players ordered a big number of large size container ships, the Greeks did not participate in this action at all this year. It also appears the high interest over the last few years in chemical tankers has eased and current pace looks much quieter, while offshore supply ships "more specifically the AHTS types, have become potential newbuilding candidates" with "action in the offshore-drilling platform sector possible" says the broker.
Moundreas puts the world order book at the end of the first half at 11,000 ships of 550m dwt with Greek owners accounting for 930 vessels of 77.8m dwt or about 8.4% by number and 14.2% by tonnage. -- See 'Tables'.
-- Filed: 2008-07-30

Ferry jolts blamed on poor ports
The Aegean Pearl sustained minor damage from the jolt, while the larger Maltese vessel emerged relatively unscathed, according to Port Authority officials.
The collision, the fourth such incident in the Aegean within a month, fueled criticism from shipping union representatives who said that the inadequate coordination of crew members and human error were less of a problem than the poor infrastructure at Piraeus and other ports.
At the end of last month, a passenger ferry hit a rock off Oinousses, in the eastern Aegean. In all cases, the vessels were damaged but there were no reports of any serious injuries.

---Jul 26th, 2008 | By grhomeboy | Category: Business Economy
Meanwhile, Merchant Marine Minister Giorgos Voulgarakis said yesterday the Thessaloniki port (OLTH) is expected to announce the winner of the tender to manage its cargo operations next week. A joint venture between Hutchison Port Holdings (HPH) and Greek pharmaceutical firm Alapis has submitted the highest bid to operate the service, with an offer of more than 3 billion euros.

Evergreen pulls out of 12,400 teu deal
---Janet Porter - Friday 1 August 2008
Evergreen will not be going ahead with a charter deal with Niki Shipping.
Niki, the Theo Priovolos-linked investment company, had been planning to place an order with STX Shipbuilding, but industry sources in South Korea revealed last week that no contract had been signed. Brokers said the building berths originally earmarked for the Evergreen order had now been switched to very large crude carriers.
Whether Evergreen would follow the other front rank carriers with an order or long-term charter deal for the latest generation of containerships has been gripping the markets for months. This is the first time Evergreen has commented on the rumours that the deal was off.
Although negotiations with Niki Shipping were an open secret, group chairman Chang Yung-fa expressed public opposition to ships of that size.
Most other fixtures for this size ship have been for at least 10 years at around $60,000 a day. But in recent weeks, the freight markets have weakened considerably, with the Asia-Europe trade coming under particular pressure as demand softened.
Ships of 12,000 teu or more are only suitable for the Asia-Europe trades that now face considerable over-capacity problems as the huge number of newbuildings in the pipeline start to arrive.
Dr Chang said his personal preference was for vessels of 8,000 teu at most, since these would be best placed to cope during an industry downturn. Others believe that economies of scale can only be achieved through the very big ships. But Evergreen would always have the possibility of chartering super post-panamaxes on a sub-let basis from those owners or operators that have very large boxships on order.

Tanker buy to end Top terms
---The tanker arm of Everlast Shipping of Greece, Everenergy, is negotiating the purchase of four suezmax tankers formerly controlled by US-listed Top Ships.
The tanker company is set to take the 154,000-dwt Priceless, Timeless, Flawless and Stopless (all built 1991) from their current owner, Korea Marine Fund (Komarf). The investment fund is a subsidiary of government-controlled Korea Development Bank.
Top may be on its way to getting out from under the thumb of expensive charter-back terms that have hampered it since its sale-and-leaseback deals of 2006.
Market sources say Top may be able to terminate charters on the four suezmaxes but also on four handymax products tankers - the 47,000-dwt Doubtless and Spotless (both built 1991), Vanguard (built 1992) and 45,700-dwt Faithful (built 1992). Brokers say the medium-range (MR) units have been or are close to being sold.
As for the suezmaxes, brokers have reported the deal as sealed at $165m, which is low considering that Komarf bought the ships in April 2006 for $48m each.
Brokers cite such ships have a market value of $85m each.
Everenergy executive Stelios Tzitzis is unwilling to comment.
TradeWinds understands that a deal has yet to be sealed with Komarf, which has the ships fixed back to Top for five years. The quartet was sold as part of larger 13-ship sale-and-leaseback deal two years ago. Five went to a fund controlled by Camillo Eitzen and Norwegian fund manager Pareto.
The deal could see Everenergy control five suezmax tankers.
Last April, the company bought the 147,000-dwt tanker Sea Max (ex-Errorless, built 1993) for over $50m from Top. This ship was part of the 13-ship sale-and-leaseback package.
Top has been trying to "unwind" charter-back commitments in connection with the sale and leasebacks, which helped throw off a huge special dividend to shareholders but preceded a downturn in hire rates. Top has been paying a bareboat rate of roughly $25,000 per day for the suezmaxes and around $12,000 per day for the handymaxes.
All four units in the Everenergy deal, except for the Stopless, have been trading in the spot market. The Stopless is on a $35,000-per-day charter set to expire this quarter.
The handymaxes are on charters running into 2010 at between $14,500 and $15,250 per day.
In March, Top helped bring about the sale of the 154,000-dwt Faultless (built 1992) and was able to terminate the charter. At the time, Top chief Evangelos Pistiolis said "corrective action" in the tanker fleet would continue.
Yiota Gousas and Joe Brady Athens and London
published: 31 July 2008

TEN mixes right blend
---TSAKOS Energy Navigation reported an 85% surge in profits today for the second quarter, as the tanker company's opportunistic mix of variable-rate charters allowed it to ride the OPEC production swell.
Spot fixtures also rose 20%. Its blend of charters enabled TEN to weather autumn rate turbulence and also to exploit market peaks, the company explained.

Top Ships reports second quarter and first half 2008 financial results
For the three months ended June 30, 2008, the Company reported a net loss of $5,589,000, or $0.22 per share, compared with net income of $7,276,000, or $0.67 per share, for the second quarter of 2007. The weighted average numbers of basic shares used in the computations were 25,182,389 and 10,825,912 for the second quarter of 2008 and 2007, respectively. The results for the second quarter of 2008 include net charges of $6,661,000, or $0.26 per share of special items that affected the Company's net results that are typically excluded by securities analysts in their published estimates of the Company's financial results, which are described in Appendix A to this release. For the three months ended June 30, 2008, operating income was $7,078,000, compared with operating income of $8,651,000 for the second quarter of 2007. Revenues for the second quarter of 2008 were $76,687,000, compared to $75,289,000 recorded in the second quarter of 2007.
For the six months ended June 30, 2008, the Company reported a net loss of $24,430,000, or $1.07 per share, compared with net income of $10,275,000, or $0.95 per share, for the first half of 2007. The weighted average numbers of basic shares used in the computations were 22,738,815 and 10,801,6121 for the first half of 2008 and 2007, respectively. The results for the first half of 2008 include net charges of $23,109,000, or $1.02 per share of special items that affected the Company's net results that are typically excluded by securities analysts in their published estimates of the Company's financial results, which are described in Appendix A to this release. For the six months ended June 30, 2008, operating income was $4,644,000, compared with $12,099,000 for the first half of 2007. Revenues for the six-month period ended June 30, 2008 were $149,324,000, compared to $149,277,000 recorded in the first half of 2007.
> The delivery of our last drybulk vessel, which completed the diversification of the Company into the drybulk sector. We agreed to acquire these vessels in July and August of 2007 and since then we have successfully raised debt and equity capital in excess of $390 million to fund our capital expenditures in the drybulk and the tanker sector.
> The chartering arrangements of all our drybulk vessels are with major charterers for periods between one and five years. These fixed rate charter agreements significantly reduce any potential downside of the drybulk market for the next years and provide stable operating cash-flows for the Company.
> The private placement of 7.3 million common shares for aggregate net proceeds of $51 million.
> The agreement to sell five Suezmax tankers built between 1992 and 1996 for an aggregate sale price of $240 million. Two of the vessels have already been delivered and the remaining three are expected to be delivered to their new owners by the end of August 2008. The net proceeds of the sales of approximately $90 million may be applied to acquisitions and general corporate purposes.

FreeSeas Inc. Reports Results for the Second Quarter Ended June 30, 2008
Operating Revenue Increased 324.3 Percent in Second Quarter
Company Announces New Quarterly Dividend Rate of $.20 Per Share
PIRAEUS, Greece, July 31, 2008 (PRIME NEWSWIRE) -- FreeSeas Inc. (Nasdaq:FREE), (Nasdaq:FREEW) and (Nasdaq:FREEZ) ("FreeSeas" or "the Company"), a provider of seaborne transportation for drybulk cargoes, announced today unaudited operating results for the second quarter ended June 30, 2008.
Financial Highlights
* Operating revenues grew by 324.3% compared to the same quarter
of 2007, to $15.11 million from $3.56 million.
* Net income for the second quarter of 2008 was $4.18 million
or $0.20 basic earnings per share based on 20,936,252 common
shares outstanding, compared with net income of $1.71 million,
or $0.27 basic earnings per share based on 6,290,100 common
shares outstanding for the same quarter of 2007.
* Adjusted EBITDA for the quarter ended June 30, 2008 increased
by 205% as compared to the same period in 2007, to $8.73 million
from $2.86 million.
Dividend Information
* FreeSeas declared its second quarterly dividend of $0.175 per
share on its common stock outstanding. The dividend was paid on
May 30, 2008 to shareholders of record as of May 20, 2008.
* The Company also announced today that it has declared an
increased quarterly dividend of $0.20 per share on its common
stock outstanding. The dividend will be paid on August 29, 2008
to shareholders of record as of August 20, 2008.

.......As does Capital
(Aug 1 2008)
---Owner of modern double-hull tankers, Capital Partners said that net income for the second quarter of this year was $12.6 mill.
This translates to earnings of $0.50 per limited partnership unit, which is 43% higher than the $0.35 in the 1Q08 and 2.3 times higher than the $0.22 per unit in the 2Q07. Both increases were driven by the higher number of vessels in the fleet and growth in profit sharing revenues, the company said.
The partnership generated an operating surplus for the quarter of $15.7 mill, up 54% both from the 1Q08 and the 2Q07. Operating surplus is a non-GAAP financial measure used by certain investors to measure the financial performance of the partnership and other master limited partnerships.
Gross revenues for the 2Q were $32 mill, of which $4.5 mill were profit sharing revenues, reflecting buoyant spot rates in both the MR product tanker market and the Suezmax crude oil tanker market.
Total operating expenses were $13.7 mill, including $6.3 mill in fees for the commercial and technical management of the fleet paid to a subsidiary of Capital Maritime & Trading, the partnership's sponsor, $5.9 mill in depreciation expense, and $0.7 mill in general and administrative expenses. Net interest expense and finance cost for the quarter was $5.7 mill.
Ioannis Lazaridis, ceo and cfo of Capital Product Partners' general partner, said, "We are very pleased with the strong second quarter results, driven by our ongoing fleet expansion as well as our profit sharing strategy which enabled us to take advantage of the rising spot markets in the second quarter. In addition, we continue to benefit from our five-year fixed-rate management agreement with a subsidiary of Capital Maritime."
The clean product market improved significantly in the 2Q compared to the 1Q supported by a very strong transatlantic market, which was followed by a substantial re-bound in the Eastern market. The market benefited from the exports of diesel from the US as demand in Europe increased, as well as from seasonal increase in US gasoline imports.
Furthermore, timecharter activity in the product tanker sector regained momentum, while asset prices continued to rise. Spot earnings for Suezmax tankers averaged close to a 10-year record high for the quarter on the back of a tight demand and supply balance of tonnage.
The Partnership's long-term debt as of 30th June was $428 mill and partners' equity was $198 mill. The balance sheet remained strong, with a modest debt level relative to the market value of the vessels.
The partnership has a right of first refusal on six MR product tankers from Capital Maritime if medium- to long-term charters are arranged for them.
Lazaridis concluded, "So far this year, Capital Product Partners has made excellent strategic progress. In 2008, we have taken delivery of two newbuilding MR tankers contracted prior to our offering and have completed the acquisition of two additional tankers from our sponsor, Capital Maritime, that are expected to add approximately $0.08 per unit to our annual operating surplus.
"In addition, we secured earlier in 2008 a new $350 mill five-year non-amortising credit facility, which will enable us to continue to fund accretive transactions over the coming years. With our modern, high-quality fleet and unique relationship with our sponsor, Capital Product Partners is well-positioned to capitalise on the tanker industry's long-term growth dynamics."

Dahlman Rose Research Comments: DSX, Marine Shipping Re-Cap
>Management noted its intent to continue expanding but acquisitions would be contingent upon more stability in the equity markets that would support a share offering. Management typically chooses to fund acquisitions with significant amounts of equity to preserve its 100% dividend payout structure.
>Even financed mostly with equity, time charter returns render fleet purchases quite accretive to dividends. We estimate the acquisition of one Capesize vessel, fixed at current rates of $87,000/day and financed entirely with equity, adds $0.13/share to our 2009 dividend forecast of $3.32/share.
>Diana continues to offer extensive visibility, with 97% and 69% of its remaining 2008 and 2009 operating days locked-in on contract. The company retains some optionality within its Panamax fleet, as 9 vessels roll off contract between now and the end of 2009.
>We believe Diana shares are attractive in that they offer a solid 11.5% dividend yield and potential upside with vessel additions. We forecast the company to payout $3.50/share in dividends during the next 12 months and its book net debt/cap is just 17%. We maintain our buy rating and $40 target on Diana, based on a 9% target dividend yield.

10th Annual Marine Money Greek Ship Finance Forum
Marine Money Greece and anchor sponsor Fortis Bank will host the 10th Annual Marine Money Greek Ship Finance Forum on October 9, 2008 at the Athens Ledra Marriott Hotel.
While shipping keeps going strong, the conference will look the debt markets and the capital markets as they try to keep pace. It will also examine whether the industry is set for a slowdown and if there are any cracks appearing in the bull run of the past years.
Further information:
Sponsors agreed to date include:
Anchor Sponsor Fortis Bank
10th Anniversary Event Sponsor Capital Product Partners L.P.
Speakers Dinner Sponsor Navios Maritime Holdings Inc.
Lunch Party Sponsor Tsakos Energy Navigation Limited
Closing Reception Sponsor International Registries, Inc.
Prime Sponsors: Alba Maritime Services SA * Capital Product Partners L.P. * Dahlman Rose & Co. LLC * Excel Maritime Carriers Ltd. * International Registries, Inc. * Jefferies & Company Inc. * Navios Maritime Holdings Inc. * TEN Limited *
Corporate Sponsors:
Blank Rome * Cantor Fitzgerald & Company * Clarkson Investment Services * Credit Suisse * Deloitte. Hadjipavlou Sofianos & Cambanis S.A. * Dubai Maritime City * FSL Trust Management Pte. Ltd. (FSLT) * G. Bros Maritime S.A. * Golden Destiny S.A. * JP Morgan * Nordea * Pareto Group * Seward & Kissel * Top Ships Inc. * Watson, Farley & Williams LLP *
*List of 2007 participants* is available at:
Source: Marine Money Greece,