Greek Shipping News Cuts
Week 41 - 2008


Still some clouds over Cosco's Piraeus box agreement

---Though the Piraeus Port Authority (PPA) and China's Cosco Pacific are on track to sign an initial agreement October 10 granting the Chinese company the 35-year concession to operate container handling facilities in the Greece's largest port, there are still hurdles to be cleared.
Opposition of PPA employees and dockers to the privatisation of Piraeus' container terminals 2 and 3 is gaining momentum and an initial 24-hour strike took place October 8. Cosco Pacific is desperate to reach an agreement with the workforce, as it sees the employees and dockers essential to the success of the concession; however, workers say they cannot say "yes" to the sale of the profitable container terminals. They are also concerned about newly negotiated employment contracts, which they say splits the workforce.
Further, during a face-to-face meeting, Piraeus Mayor Panagiotis Fasoulas told Marine, Aegean and Island Policy minister Anastasios Papaligouras, the city's Town Hall strongly opposes the privatisation of the port's container terminals.
Cosco strongly believes the experience of the workers is vital for the terminals to reach high levels of productivity. It is aware of the shortage of experienced people and says it is not possible to train people to the required level in the time available. It is understood the Piraeus concession is a key part of Cosco's plan to expand its activities in the wider European region.
In another development, it appears the Chinese group plans to withdraw the four ships it has in the Asia/Mediterranean service, part of the CKYH Alliance, and performing port calls in Piraeus, as part of the East Mediterranean Express (EMX) service. As a result, the alliance's other participants, Yang Ming Lines with two ships and K-Line with one and Hanjin Shipping will hub through Egypt's Port Said leaving Piraeus with only one direct service from the Far East, run by MSC, the port's biggest customer.
Cosco's threat to leave the Asia/Med service reportedly comes after a dispute over the aggressive pricing policy of other members. Some analysts suggest Cosco is using the threat to put pressure on the PPA. Others say it is part of a move to re-organise its service and that eventually it will operate a service independently into Piraeus.
-- Filed: 2008-10-06

Owners urge banks to be patient
Nigel Lowry, Athens - Friday 10 October 2008
MANY shipping companies may face pressure from their banks if the current maelstrom of negative developments in financial and shipping markets persist, several leading Greek shipping executives acknowledged when questioned at an industry forum last week.
But owners urged restraint from the banks if loan covenants are breached, arguing that it is premature to assess where the crisis is headed.
However, he voiced a relatively optimistic view, that the industry could bounce back quickly if there was a timely resolution to the financial squeeze.
Banks were also urged for their own good to use some latitude in their response to breaches of loan conditions.
Brokers have reported a near total dearth of significant sale and purchase deals in recent days.
Another chief executive, George Karageorgiou of London AIM-listed Globus Maritime, pointed out that not all loan covenants were anchored to vessel values.
The conference heard that bank lending for shipping this year is likely to fall by about one third in comparison with 2007.
But Mr Andersson estimated that lending this year would fall to below $100bn, compared with $140bn-$150bn in 2007.

Enormous Crowd Joins the 10th Annual Marine Money Greek Ship Finance Forum
Moderators Anthony Backos and George Paleokrassas of Watson Farley & Williams led a panel on sourcing the expected $300 billion in capital required for the current order book. Andreas Treede of KfW-IPEX spoke first noting that the volatility of the shipping markets is reflected in banks' balance sheets and profit/loss statements.
Ulf Andersson of Nordea followed stating how global an issue the current financial hurricane truly is, with no markets left unaffected. Assuming 70% of banks that lend to shipping will be closed for the remainder of 2008, Mr. Andersson urged the crowd to accept that price and terms for capital have changed, or risk being left out.
Chris Megalou of Credit Suisse co-presented the Investment Banks perspective on equity markets, along with Jeffries' Hamish Norton. Mr Megalou noted the IPO market has been resilient and will open again for issuers after a period of inactivity. Claiming that shipping is the world's second oldest profession, Mr. Megalou assured the crowd that the world is not going to end. Stay close to your relationship banks, the market will come back on IPO's, he advised.
Guy Verberne, Head of Economic Research at Fortis, addressed the "mess in the west" and went on to say that if confidence does not return in the banking sector, credit will further tighten.
George Papadimitriou of Ernst & Young was clear that a global financial crisis coupled with an economic recession, can be explosive and will affect global demand, and therefore freight rates. Correctly stated, its not about avoiding risk, its about your risk strategy.
Gary Wolfe partner at Seward & Kissel, was all about mergers and growth: getting larger, going private, SPACs, and the legal considerations which govern each strategy.
Joseph M. Giaccobe of Banc of America Securities moderated a panel comparing the merits of being public or private. Dynamic Angeliki Frangou, CEO of Navios Maritime talked of the importance of the management team, and stressed that the balance sheet is your strength or weakness.
Ioannis Lazaridis, CFO of Capital Product Partners, George Saroglu, COO of Tsakos Energy Navigation and Vasilis Hadjiyiannis, CFO Alba Maritime Corp, and Michael S. Zolotas CEO of Grandunion Inc., debated the various stages of shock as far as valuations are concerned and whether or not it is even proper to value assets in these market conditions.
David E.K. Frischkorn of Dahlman Rose led a panel on SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis through 2010. Michael Livanos, CFO Grand Union, Anthony Argyropoulos, Cantor Fitzgerald, Elliot K. Etheredge , of JP Morgan, Andrew Meigh, Clarkson Investment Services, Theo Xenakoudis, Marshall Islands Registry and Marine Money President, Matt McCleery contributed.
Mr. Argyropoulos reiterated that there are too many ships on order, and in a global economic slow down, it is evident that rates will suffer.
Funding costs have increased to 1 percentage point above the London Interbank Offered Rate, or Libor, he said, without indicating how much the figure was last year.

Top talks still alive
Top said that the exclusivity agreement announced 25 September, which was originally set to expire yesterday, has been extended until 22 October.
Source: Fairplay Daily News 09 Oct 2008


---Friday, 10 October 2008
INTERNATIONAL Chamber of Shipping chairman Spyros Polemis told a conference in Athens yesterday that it is not inevitable that emissions trading will be applied to shipping. His comments come as IMO's Marine Environmental Committee considers the issue. The MEPC was expected to discuss the greenhouse gas problem this morning.
He referred to the high cost of fuel for ships saying that Many in the industry would argue this already provides a sufficient incentive for shipowners to reduce current fuel consumption and to invest in fuel efficient technology.