Greek Shipping News Cuts
Week 42 - 2008


A 'trained' shipping industry will emerge

---Amid a turbulent market and a crisis in the banking sector, there is still a conviction that based on past performance the shipping industry will emerge from the financial crisis. While challenging times no doubt lie ahead, speakers at the Financial Times conference in Athens noted shipping is already aware of problems and is taking steps to deal with them.
"The continuing growth of world trade and world economic prosperity are intrinsically connected to the maintenance and strengthening of conditions for free and fair competition in sea transport, " said Anastasios Papaligouras, Greece's Marine Aegean and Island Policy minister. "Since shipping is a global activity, its direct or indirect dependence on the international intangible factors, the de-escalation of the growth rate of developed countries and the volatility of the oil market is more obvious," he said.
But he said that "in this new and largely fluid environment, shipping has an important advantage in relation to other business sectors. Shipping does not need 'training' in these developing trade variables".
Andew Simmons, cfo of Nasdaq-listed Stealthgas, warned that "after a great run, shipping must adjust and get used to a much changed environment both financially and probably commercially and we all face very challenging times ahead". He pointed out adequate liquidity is the key, as the cost of finance will increase, repayment of loans will tighten and some banks will disappear altogether, while others will leave shipping.E
Ted Petropoulos, md of Petrofin SA, said global lending stands at approx $450bn, while at the end of 2007 lending to Greek shipping was $66.94bn. "This year we do not expect an increase, but, possibly, a contraction. As reported recently, new lending is down 23% to $13.3bn for the first half of 2008," said Petropoulos. He also estimated cancelled orders could rise to around 10% of the total newbuilding orderbook, some $55bn and this does not include delayed deliveries.
Spyros Polemis, president of ICS/ISF, stressed shipping actively encourages the seeking of solutions through Imo to reduce emissions. "The Imo package must be adopted before UN's Climate Change Conference due in December 2009. The global economy will suffer if policies make shipping relatively less economically attractive. It would be perverse if shipping was penalised," said Polemis.
Philip Embiricos, chairman of Bimco, said fuel costs are affecting shipping. World exports as a share of the global GDP are slowing down. This is reflected in the world trade growth, since the 2008 Transpacific container flow is expected to decrease 5%, while the container traffic through the Panama Canal is stable this year, when it was growing by an average of 1.5% during the last six years.
Nicos Fistes, chairman of Intertanko and of Grand Union Inc., said the about 2.6bn tonnes of oil transported by sea on an annual basis represents 65% of the 4bn tonnes of oil consumed. And this mode of transportation is getting safer said Fistes pointing out the rapid modernisation of the global tanker fleet. "By the end of this year, 84% of tankers will be double hulled, while by the end of 2010 this percentage will rise to 96%," he said.
Shipowner and former Union of Greek Shipowners president, John C Lyras, said speculators are among the enemies of open sea market. He said: "There is a difference between speculation and risk taking. FFAs are not a requirement of the shipping industry, but of the speculators. They are the reason for the high market volatility, which is distorting the supply/demand balance."
-- Filed: 2010-10-15

Marine Money panel sit firmly on fence
---Marine Money's annual Greek shipping-finance conference in Athens packed in a record 400-plus delegates all thirsting for the words of wisdom that bankers and shipowners would let fall in the context of the current financial crisis.
But from the perspective of the borrowers - that is, the shipowners - they weren't about to get a dazzling insight.
A panel of some well-known names sat so firmly on the fence, their rear ends got indented.
Evangelos Marinakis of Capital Product Partners LP advocated a "wait-and-see-how-world-banking goes" attitude.
Stamatis Molaris of Excel Maritime ventured as far as to say that if the crisis is prolonged, we will see certain failures in the shipping market.
Sotiris Dushas of Alba Maritime, which incidentally has sold off quite a few newbuilding slots recently, was even more downbeat.
"We have to handle it day by day and accept things we would not have [accepted] a few weeks or months ago," he said.
Globus Maritime chief executive officer George Karageorgiou came in with an interesting angle, saying now is the time for shipowners to support the banks.
But as long-time shipping-finance man Rex Harrington was heard to mutter in the audience,"come back next year - nobody's got any idea of what's going to happen".
published: 16 October 2008

Industrial Carriers heads to court owing $33m
---Nigel Lowry and Michelle Wiese Bockmann - Friday 17 October 2008
INSOLVENT Ukrainian dry bulk and tanker operator Industrial Carriers Inc arranged final settlements with many of its creditors before finally filing for bankruptcy in Greece last week, it has emerged.
Industrial Carriers had already run up overdue debts of more than $33m which could not be paid and which were rising daily, the filing said.
A bankruptcy hearing on November 25 is expected to accept the request and appoint a liquidator to wind up the company, which was registered in the Marshall Islands and managed from Odessa with further offices in Athens, Moscow and Shanghai.
The company filed in Greece because the company was established under Greek offshore-type legislation, it emerged.
It is understood that it has clinched final settlements with the majority of the owners of the 40-50 ships under charter through directly assigning receivables, mainly income from relets. Mr Cherepanov said that the positions settled did not amount to the $1bn rumoured in some market quarters on Friday.
One legal source estimated 75% of the owners affected had opted to settle, leaving about 10 owners and operators chasing charter debts.
The collapse appears to have hit some of the largest charterers and owners in shipping around the world.
Industrial Carriers listed Oldendorff, Deiulemar, Bottiglieri, Coeclerici, Pan Ocean, Korea Line, Transfield, BHP Billiton, Armada and Atlas as companies with whom the company did business.
Listed companies whose ships have been confirmed as on charter to Industrial Carriers at the time of the collapse included Star Bulk Carriers, Frontline and OceanFreight. London-based legal firm MFB Solicitors is acting for Industrial Carriers.
Included in bankruptcy action was ITRO Corp, but Industrial Carriers said the company had no financial affiliation.

Seanergy Commences Trading on the Nasdaq Global Market
About Seanergy Maritime Corp.
Seanergy Maritime is a Marshall Islands corporation with its principal offices in Athens, Greece. Seanergy purchased and took delivery of six dry bulk carriers from companies associated with members of the Restis family pursuant to the Master Agreement dated May 20, 2008. Its current fleet is comprised of two Panamax, two Supramax and two Handysize dry bulk carriers with a combined cargo-carrying capacity of 317,743 dwt and an average fleet age of approximately 10.5 years.
For further information please visit our website at
Source: Press Release, October 15, 2008 -

Aegean Marine Petroleum Network Inc. to Expand Presence in the Caribbean
---PIRAEUS, Greece, Oct. 16 /PRNewswire-FirstCall/ -- Aegean Marine Petroleum Network Inc. (NYSE: ANW) today announced that it will be establishing business operations in Trinidad and Tobago, expanding its presence to the southern Caribbean. Aegean is in the process of setting up its local logistics infrastructure and expects to commence operations by the end-of-the first quarter, 2009.
E. Nikolas Tavlarios, President, commented, "We are pleased to once again expand Aegean's global platform by entering into a strategically important market. Trinidad and Tobago, located in the southern Caribbean and bordering the northeast coast of South America, is a significant transshipment hub which lies along major shipping lanes connecting South America to the Panama Canal, Caribbean, and the U.S. Gulf. Ships sailing through these waters encompass all sectors of the industry, including tanker, container, general cargo, drybulk, chemical, and gas carrier."
Mr. Tavlarios continued, "We believe Aegean's leading reputation for providing quality product and service, successful track record in developing new markets, and expansive logistics infrastructure will help establish Trinidad and Tobago as a major bunkering destination in the southern Caribbean. Trinidad and Tobago is a party to the IMO MARPOL Regulation and requires all bunkering tankers entering the market to be double-hull."
Mr. Tavlarios concluded, "Including Trinidad and Tobago, Aegean will now be in 12 markets around the globe increasing its global dominance in the physical supply of marine fuel. With its expanding infrastructure of double-hull vessels and strong balance sheet, Aegean remains poised to take advantage of industry fundamentals and drive long-term sales volume growth."
About Aegean Marine Petroleum Network Inc.
Aegean Marine Petroleum Network Inc. is an international marine fuel logistics company that markets and physically supplies refined marine fuel and lubricants to ships in port and at sea. As a physical supplier, the Company purchases marine fuel from refineries, major oil producers and other sources. The Company sells and delivers these fuels to a diverse group of ocean-going and coastal ship operators and marine fuel traders, brokers and other users through its service centers in Greece, Gibraltar, Singapore, Jamaica, the United Arab Emirates, Northern Europe, West Africa, the United Kingdom and North America.

DryShips Capes controversy
DryShips is not using cash, but its shareholders will be heavily diluted by the issuance of 19.4M new shares awarded to Cardiff Marine, and DryShips will be saddled with $478M in additional debt and shipyard instalments.
Indeed, DryShips capacity will skyrocket 40% following the Cardiff Marine acquisitions, from 3.8M to 5.4M dwt. DryShips was already the largest US-listed dry bulk company and the Cape infusions will propel it further ahead of Excel, Genco and Eagle Bulk.
The psychology changes...
Economou argued that assets should be valued on their long-term potential, not short-term outlook. He suggested that it was the related party nature of the deal that opened the door for DryShips to expand when asset plays overall were stalled, because it allowed for use of shares versus cash.
He also asserted that dry bulk rates are being temporarily impaired by the ongoing pricing dispute between the Brazilian iron ore giant Vale and Chinese steel manufacturers.
Full company name: DryShips Inc
Headquarters: Amaroussion, Greece
Share price: $20.88 (closing price 8 Oct) sharply down vs 52-week high of $131.34
Latest financial result: Q208 net income (excluding asset sale gains and one-offs) $152M
Fleet: Prior to Cardiff Marine transaction, DryShips had 49 ships (3.8M dwt): 7 Capesizes, 30 Panamaxes, 2 Supramaxes, 10 newbuilds (6 Panamaxes, 4 Capesizes).
Source: Fairplay International Shipping Weekly - Companies 16 Oct 2008

OceanFreight Inc. Announces Mutual Termination of M/T Olinda Time Charter & Delivery of M/T Tigani
---October 16, 2008 - Athens, Greece - OceanFreight Inc., (NASDAQ:OCNF) a global provider of seaborne transportation services today announced that it has taken delivery of the 1991 built Aframax tanker M/T Tigani which immediately commenced its new time charter with Heidmar for a period of about one year at a gross daily rate of $29,800. The Company also intends to take delivery of the 1990 built Aframax tanker M/T Tamara this week.
As part of the termination of the charter for M/T Olinda, the Company and the charterer have agreed to a mutual release of claims. In this connection, the Company has received cash compensation of approximately US$ 1.2 million and ownership of all bunkers on board the vessel.

Star Bulk Announces Updated Employment Status of Star Beta
---Athens, Greece, October 16, 2008 - Star Bulk Carriers Corp. (NASDAQ:SBLK) ("Star Bulk") today announced a change in the employment status of a Capesize vessel in its fleet, the Star Beta, and a dispute relating to that change. The Star Beta, a 1993-built Capesize vessel of 174,691 dwt., was time chartered by Star Bulk to Industrial Carriers Inc. of Ukraine ("ICI"). Under the related time charter agreement, ICI was obligated to pay Star Bulk a gross daily charter hire rate of $106,500 until February 2010. In turn, ICI sub-chartered the vessel for one year to Oldendorff Gmbh & Co. KG of Germany ("Oldendorff") at a gross daily charter hire rate of $130,000 until February 2009.
ICI has assigned its rights and obligations under the sub-charter to Star Bulk in exchange for it being released from the remaining term of the ICI charter.
Oldendorff has notified Star Bulk that it considers the assignment of the sub-charter to be an effective repudiation of the sub-charter by ICI. Star Bulk believes that the assignment is valid and that its position will prevail in this dispute.
According to press reports, a branch office of ICI has today filed an insolvency proceeding in the Greek courts.
About Star Bulk
Star Bulk is a global shipping company providing worldwide seaborne transportation solutions in the dry bulk sector. Star Bulk's vessels transport major bulks, which include iron ore, coal and grain and minor bulks such as bauxite, fertilizers and steel products. Star Bulk was incorporated in the Marshall Islands on December 13, 2006 and is headquartered in Athens, Greece. Its common stock and warrants trade on the NASDAQ Global Market under the symbols "SBLK" and "SBLKW" respectively. Currently, Star Bulk has an operating fleet of twelve dry bulk carriers. The total fleet consists of four Capesize and eight Supramax dry bulk vessels with an average age of approximately 9 years and a combined cargo carrying capacity of 1,106,250 deadweight tons.

Islanders lose ferry service
---The islands of the Cyclades will be left without the ferry service that usually connects them from tomorrow as the vessel plying that route has been deemed unseaworthy.
The Panaghia Hozoviotissa failed an inspection and subsequently lost its safety certificate, joining the Panaghia Tinou, which was anchored in June for the same reason.

COSCO Pacific to Operate Greek Port
---ATHENS, Oct 14, 2008 (SinoCast China Transportation Watch via COMTEX) -- CSPKF | Quote | Chart | News | PowerRating -- COSCO Pacific Ltd. (SEHK: 1199) successfully bade EUR 4.3 billion or around HKD 45.2 billion for 35-year construction and operation licenses of the No.2 and No.3 docks of Piraeus Port, Southeast Greece, and both parties recently entered into the preliminary financial agreement.
The Greek central government takes a 74% stake in Piraeus Port now, so this deal should be approved by local related authorities. COSCO Pacific and Piraeus Port are expected to form a partnership formally in the upcoming one to two months, and it will be the biggest investment Greece receives from foreign investors.
As one of Europe's top ten container ports, Piraeus Port performed staggeringly on account of inharmonic labor relations in recent years. In the entire 2007, the total volume of its container transshipment business fell 33.7%.
In addition, the company has aggregately plummeted more than 70% on the Athens Stock Exchange this year, and its market value just stands at EUR 300 million or so, so the Greek central government has to introduce suitable strategic investors into this ailing company.
COSCO Pacific regards the construction and operation of the No.2 and No.3 docks of Piraeus Port as its important progress in further expansion in the European market, because it still has a lower say in the global container transportation sector in default of its own ports.
Total throughput of the No.2 dock hit 1.37 million TEUs last year, and the Hong Kong-listed company intends to complete the 1.1-million-TEU No.3 dock before 2015, said the vice general manager for COSCO Pacific.
Hutchison Whampoa Ltd. (SEHK: 0013), an aggressive peer of COSCO Pacific, ever participated in the public bidding above, with a bid quotation of EUR 4.06 billion, said people with the direct knowledge of the matter.
In particular, another Greek port started seeking for strategic investors two months ago, and the public bidding charmed six international corporations. COSCO Pacific gave a USD 880 million offer, with a view to conveniently transporting products made in China to Southeast Europe through the northern Greek port and highway in the near future.
COSCO Pacific, under the wing of Beijing-headquartered container terminal coglomerate China Ocean Shipping (Group) Company (COSCO), went public on the Stock Exchange of Hong Kong in December 1994. It is mainly engaged in container terminal operation, container manufacturing and leasing, as well as integrated logistics
Source: Tue. October 14, 2008; Posted: 04:34 AM

Greek navy prioritises maritime patrol aircraft contest
---Acquiring a new fleet of maritime patrol aircraft is now the top procurement priority for the Greek navy, with the nation's six Lockheed P-3B Orions nearing the end of their operating lives.
Candidate systems now include special mission variants of the Alenia Aeronautica-promoted ATR 72, Beriev's Be-200 amphibian, EADS Casa's C-295 and Embraer's EMB-145 regional jet.
A previous US government offer to supply secondhand Lockheed S-3B Vikings has been rejected, along with a proposal from the manufacturer to upgrade Athens' existing P-3 fleet.
Alenia Aeronautica's ATR 72-based proposal will draw on elements of the anti-submarine warfare variant already sold to the Turkish navy and to enter service in 2010. Greece will be offered a tailored version of the design's Thales-sourced Amascos mission system, and the option to integrate undisclosed anti-ship weapons during the new contest, the company says.
Previously ordered by the Chilean navy, a maritime patrol development of the C-295 is being offered with the company's Fully Integrated Tactical System mission equipment. Beriev recently announced plans to sell a military development of the Be-200, citing interest from the Chinese and Russian navies.
Embraer's P-99 bid would offer airframe commonality with the Greek air force's four EMB-145-based airborne early warning and control system aircraft and EMB-135 transports. However, with the Brazilian company having previously sold only two EMB-145 maritime patrol aircraft to Mexico, Athens' multirole requirement represents a new and much broader mission set for the type.
"We believe a jet solution will be favoured," said Ricardo Marcelo Bester, Embraer's vice-president marketing and sales, defence and government market for Europe, the Middle East and Africa during the 7-11 October Defendory exhibition in Athens. Alenia Aeronautica officials counter that other recent acquisitions have favoured a turboprop solution, however.
Athens' current P-3s are assigned to the air force's 353 Sqn at Elefsis air base, but its navy is expected to form a new unit to operate the replacement fleet. The nation's defence ministry could launch a formal request for proposals for the deal within the next year, say industry sources.
Boeing does not expect to offer its 737-based P-8A multi-mission maritime aircraft, but is promoting a Boeing Business Jet solution for a separate requirement for three VIP and presidential transports.
Source: By Craig Hoyle,