Greek Shipping News Cuts
Week 49 - 2008


Somali pirates release Greek ship CAPT. STEFANOS

Wednesday, 12.10.2008, 10:09pm (GMT)
mv CAPT. STEFANOS released by hijackers after 11 weeks...
The East Africa Seafarers Assistance Program (SAP) issued a statement today confirming that the bulk carrier CAPT. STEFANOS (sometimes spelled CAPT STEPHANOS) was released by its hijackers yesterday.
The vessel was captured by Somali pirates in September along with her crew of 19 in the Gulf of Aden.
"The Greek ship-owner's company Chartworld Shipping Corporation (Athens) finally confirmed that the Greek ship MV CAPT STEFANOS, with a Ukrainian citizen as a crew member, one Chinese and 17 Filipino seafarers, captured by Somali pirates September 21, was set free following 11 weeks of captivity." said the statement.
Crew members are reported to be in good health and the ship is said to be heading for the port of Brindisi in Italy.
The EU has now officially started maritime operations in the Gulf of Aden to try and combat the rising number of pirate attacks. Over 330 sailors on board some 15 ships are still held hostage by gunmen operating from the lawless regions of Somalia. Increasingly the crews of ships are seen as the best bargaining counters by the pirates, as opposed to the ships and cargos.
However, the capture of the SIRIUS STAR, which is still being held, and its cargo of $100,000 of oil has shook many as has the taking hostage of the mv FAINA which is loaded with Soviet-era armaments.

Euroseas sells FFA contracts for 2009 and 2010
---FFA panamax contracts have risen this week.
DRY bulk and container shipowner and operator Euroseas has sold panamax freight forward agreement (FFA) contracts for both the calendar years 2009 and 2010.
For 2009, Euroseas has sold contracts on the panamax index for a total of 480 calendar days with an average time charter equivalent rate of around $11,300 per day, the Athens-based company said.
For 2010, the Nasdaq Global Market-listed company sold FFA contracts for 120 days at a daily average time charter equivalent rate of $13,900.
For 2009, Euroseas has charter coverage for about 2,180 days and FFA coverage for 480 days out of 6,205 days of vessel capacity implying a total coverage of around 43%, he said.
For 2010, the corresponding charter coverage is 21%.
FFA panamax contracts have risen this week, despite the negative Baltic Panamax Index, after a quiet fortnight of low trading volumes.
Yesterday, the panamax average time charter equivalent rate fell $129 to $3,619 per day.
Source: Lloyd's List, Paul Tugwell, Athens - Thursday 11 December 2008

WISTA Forum presented "The Credit Crunch and its Impact on Greek Shipping"
The event took place at the Yacht Club of Greece, Mikrolimano, attracting a good turn-out of over 200 people, among which were many members as well as distinguished guests from the maritime industry.
Mrs. Anna-Maria Monogioudi, President of WISTA Hellas, greeted and thanked the members and delegates and expressed the hope that the outcome of the Forum will contribute towards a more constructive approach in managing the Crisis.
The write offs / sales of assets from the banks that followed, made government intervention inevitable, resulting even in the nationalization of financial institutions.
The ensuing lack of liquidity and lower circulation of money has already started a deflationary cycle.
The impact on shipping, a sector hit at the start of the recession, was massive:
The developments were swift, as the lack of debt in a capital intensive sector accelerates the decline. The situation is not expected to improve in 2009, since the banks enter the recession with weak balance sheets.
The Greek Shipping is largely affected as it depends on Financing to a great extent, in order to expand and modernize its fleets.
Newbuilding orders have also been affected, shipyards have had negative reactions showing difficulty in the timely delivery of ships and Charterers are feeling the financial pressure.
It has therefore become quite obvious that lack of credit spreads its seed everywhere and so its availability is vital for both Greek Shipping and related businesses.
The Somali pirates threat, who claimed amounts in the region of 150.000.000 US Dol. this year, involving both Ship-owners and their Insurers in lengthy and costly adventures, are additional negative parameters for the ships operations.
Source: Press release, 12 Dec 2008

Greece Freight Transport Report 2008 - by
scheduled to start operations by the end of 2012, against a previous forecast of end-2011. The project consists of three sections: the Turkish gas network, which will be enlarged to allow the transmission of gas to Greece and Italy; the IGT pipeline linking Turkey to Greece; and the IGI pipeline linking Greece to Italy. The IGT pipeline was expected go onstream in 2007 with a annual top capacity of about 11.5bn cubic metres (bcm) of gas, while the IGI pipeline, connecting Italy/s and Greece/s networks, would have an 8bcm capacity and would start operating by the end of 2012.
Taking this and other projects into account, in our latest Greece Freight Transport Report, BMI concludes that Greek oil and gas pipeline throughput will grow by a healthy average of 5.0% over each year of the 2008-2012 forecast period.
Our forecast is supported by various factors. The Greek economy itself will grow at an average rate of 3.3% per annum in the next five years, but we expect energy demand to exceed that. Most importantly, Greece is beginning to carve out a role as something of an oil and gas pipeline transit hub, with a variety of projects at different stages of development. The government has said that it sees important advantages in forging a role for Greece as an international energy hub.
Pipeline developments come against the background of an upbeat outlook for the freight industry in general. By transport modes, one of the strongest performances will be delivered by airfreight, which we expect to grow by an annual average of 4.9% over the 2008-2012 period, measured in terms of million tonnes-km (mntkm). It should be pointed out, however, that in the context of double-digit airfreight growth in many other countries, this is comparatively speaking a fairly low growth rate. This is a reflection of some of the uncertainties over the future of Olympic Airlines. Road haulage should see 4.9% annual traffic growth. In shipping, Greek lines have benefited from the effects of the global boom.
Source:, 12.12.2008 18:30:01 Greece Freight Transport Report 2008 -

Hanjin Heavy completes two ships in Subic facility
The ships, named Opal and Topaz, will be delivered to Dioryx Maritime Corp., a Greek shipping company that has ordered the first six vessels from Hanjin Heavy Industries and Construction Co.-Philippines (HHIC-Philippines). Worth $60 million apiece, each vessel can carry 4,300 twenty-foot metal containers.
Earlier, HHIC completed two other locally-built container ships. The first was launched in July and the other in August. - GMANews.TV
Source: 12/10/2008 | 04:31 PM,

DRYS Cancels Underwater Panamax Acquisition; Nets Savings Even After Steep Fees
>DryShips (DRYS / Nasdaq) announced yesterday that it has terminated its purchase of four Panamax vessels from Cardiff. The acquisition, which included a 2007-built and 2008-built resale and two newbuilds scheduled to be delivered in 4Q08 and 1Q09, was announced in July at a price of $100 million per vessel. DRYS will forfeit $55 million in deposits, and pay Cardiff a fee of $26.25 million per vessel for the cancellation and option to acquire the four ships en bloc for $160 million by December 2009. DryShips also announced the sale of its 1994-built Panamax Lacerta for $55 million has been canceled after the buyer refused delivery. DryShips is pursuing legal recourse against the buyer.
>Last week, it emerged that the Chinese Iron & Steel Assoc. (CISA) is negotiating with major iron ore suppliers to reduce the price of iron ore on January 1st, ahead of the normal April 1st contract rollover date. A reduction should revive imports into China, which has been price-prohibitive for nearly two months with a $300/ton decline in average Chinese steel prices since the summer season. Although negotiations have just begun, and it is unclear how quickly or realistic a new price will be resolved by year-end, DRYS shares have gained nearly 120% this week.
Source: 11 Dec. 2008, Dahlman Rose & Company LLC

DryShips Cancels Acquisition of Four Carriers - What Does it Mean for the Stock?
---George Economou is keeping his toys but getting paid for them. DryShips (DRYS) this week said it agreed to cancel the acquisition announced in July of four Panamax dry bulk carriers from companies beneficially owned by George Economou, DRYS Chairman and CEO. This because the purchase price of $400 mn would have represented a significant cash outflow from DRYS reserves since no bank finance was obtained for the acquisition.
The DRYS Audit Committee concluded that due to the deterioration in the dry bulk market since the agreements, it would not be in the best interest of DryShips to consummate the transaction. In fact, DRYS is aiming to amend contracts for bulk carrier acquisitions and new building to save capital.
Mr. Economou and his clan get to keep the deposits totalling $55 mn for the 4 ships. Moreover, DryShips paid for an agreement with the Economou family selling companies to give DryShips an exclusive option to eventually buy the 4 Panamax vessels for $160 mn by next Dec. 9. For this it paid each selling company (4 of them!) $26.25 mn.
How comforting that the agreement was negotiated and approved by a committee of the independent board of directors of DRYS!
Also the previously announced sale of the M/V Lacerta, a 1994 built 71,862 dwt Panamax drybulk carrier for a price of about $55.5 mn, will not close due to the Buyer's decision to not perform its obligations under the MoA. DryShips will pursue all legal remedies against the Buyer.
I continue to recommend retaining half your previous holding of DRYS because this amounts to an option on the recovery of the Chinese economy, fed by iron ore pellets, coal, wheat, fertilizer and other dry bulk carrier cargo. Mr. Economou characterized the present collpase of the Baltic Dry Index (of bulk charter rates) as something like "a nuclear explosion."
Mr. Economou, an MIT educated self-made Greek millionaire is a practitioner of what the Attic Greeks called hubris. But he is also a brilliant strategic investor in sea-borne vessels who always seems to be ahead of the rest of the gang in Piraeus.
While obviously he is interested in protecting his own assets, perhaps on the backs of shareholders, he had begun to seriously prepare for the downturn in freight rates, by switching DRYS to long-term from day charters, roughly half completed; and by a strategic investment to acquire a Norwegian company renting out ultra-deep water drilling rigs.
The latter deal (as always with Mr. Economou) included his personal purchase of the Norway stock before the company big, front-running his shareholders for his own pocket. His fleet modernization since DRYS went public in 2005 have frequently involved the company buying ships that his family already owned. Self-dealing is the price you pay for going along with George Economou in the shipping business.
Because DRYS is incorporated in the Marshall Islands, do not expect much in the way of stockholder rights, despite a lot of pretty verbiage the company puts out.
Even after the fall coming with lower Chinese growth figures and Mr. Economou's latest ploy, the stock is up about 200 percent in the last 7 weeks. It fell to under $4 when an analyst who had long recommended DRYS downrated it for fear of financial collapse and a possible failure to meet loan covenants.
Source: by: Global Investing Editor December 12, 2008 | about stocks: DRYS,

Moody's changes rating outlook on four Greek banks to negative
---December 12, 2008. Moody's Investors Service has today changed the outlook on the bank financial strength ratings (BFSRs) and long-term deposit and debt ratings of the following four Greek banks to negative from stable:
National Bank of Greece SA, EFG Eurobank Ergasias SA, Alpha Bank AE and Piraeus Bank SA. See detailed list of the ratings affected. At the same time, Moody's has affirmed the short-term deposit and debt
ratings assigned to these banks.
The outlook changes have been prompted by Moody's growing concerns over the banks' intrinsic financial strength due to a number of factors, including:
1) Increasingly challenging economic conditions, both within Greece and in a number of South East European countries where the banks have built sizeable operations in recent years. In Greece, economic growth is expected to drop from an average growth rate of 4.3% for the last decade to less than 2% for 2009, with growing indications of an even more severe contraction, especially given that the ability and flexibility of the Greek government to boost economic activity and to mitigate the impact from the ongoing global financial and economic crisis is limited by already high levels of government debt and increasing borrowing costs.
2) Exposure to the shipping sector, which is experiencing significant stress with freight rates dropping sharply due to the global economic slowdown. With banks having increased their lending exposure to shipping companies and their owners in recent years, Moody's expects such credit portfolios to come under pressure.
3) The economic slowdown and challenging conditions for a number of economic sectors in Greece, which suggest that unemployment levels could rise, leading to increased default levels in household credit portfolios.
4) The pressure on banks' profitability from weaker business expansion, interest margin pressures and a likely increase in credit costs. Credit expansion in Greece is decelerating, while business expansion in the banks' overseas operations will also slow down reflecting weaker economic conditions, growing risk aversion and higher funding costs needed to support such expansion. Interest margins are under pressure from elevated funding costs, reflecting acute competition to raise customer deposits and higher costs for wholesale funding. At the same time, faced with a strong backlash from politicians and the Greek public, banks are facing difficulties in re-pricing their lending assets in order to reflect increased funding costs and the potentially higher risk profile of their borrowers. Finally, Moody's expects the weakening credit environment to lead to higher default rates among borrowers, necessitating elevated provisioning expenses.
Moody's adds that the Greek authorities are in the process of finalising and implementing a plan to provide liquidity to the Greek economy by supporting the banking sector. The plan comprises the following three broad measures: (a) the government will guarantee up to EUR15 billion of debt to be issued by banks to refinance maturing debt, (b) the government will issue EUR8 billion in sovereign bonds to inject liquidity into the banking system, with banks being obliged to use this facility to extend mortgage and SME loans, and (c) the government will inject up to EUR5 billion of capital in the form of preference shares.
Moody's anticipates that this plan will mitigate some concerns with regard to the liquidity and funding position of those banks with a relatively high reliance on capital markets funding and will ease any
refinancing risks over the next couple of years. In addition, capital injections in the form of preference shares could help banks to sustain adequate regulatory capital levels during the ongoing financial and
economic crisis.
The majority of Greek banks have announced that they will participate in the plan. According to the plan, the government will appoint a state representative on the board of directors of any banks that participate, who will have a veto power on dividend payments and senior management remuneration. An oversight council will be established -- comprising officials from the Ministry of Finance and the Bank of Greece and state representatives on the board of directors of participating banks -- that will oversee the implementation of the plan and whether banks are adhering to the lending conditions imposed. Moody's views these measures as generally beneficial for the banks but cautions that some of them may constrain the banks' strategic and financial flexibility.
Moody's will continue to monitor the ongoing economic crisis closely and, depending on the severity and longevity of the crisis and on the degree of potential problems in troubled sectors, may downgrade ratings of banks that exhibit weakened financial strength, in particular in terms of asset quality and profitability.
The change in outlook to negative from stable applies to the following issuers and ratings:
Alpha Bank AE
- A1 long-term deposit rating
Alpha Credit Group Plc
- A1 senior unsecured debt rating
- A2 subordinated debt rating
Alpha Group Jersey Ltd
- A1 senior unsecured debt rating
- A2 subordinated debt rating
- A3 preferred stock rating
EFG Eurobank Ergasias SA
- Aa3 long-term deposit rating
EFG Hellas Plc
- Aa3 senior unsecured debt rating
- A1 subordinated debt rating
EFG Hellas (Cayman Islands) Ltd
- Aa3 senior unsecured debt rating
- A1 subordinated debt rating
EFG Ora Funding Limited II
- Aa3 senior unsecured debt rating
EFG Hellas Funding Ltd
- A2 preferred stock rating
National Bank of Greece SA
- Aa3 long-term deposit rating
- A2 preference stock rating
NBG Finance plc
- Aa3 senior unsecured debt rating
- A1 subordinated debt rating
National Bank of Greece Funding Ltd
- A2 preferred stock rating
Piraeus Bank SA
- A1 long-term deposit rating
Piraeus Group Finance plc
- A1 senior unsecured debt rating
- A2 subordinated debt rating
Piraeus Group Capital Ltd
- A3 preferred stock rating
Moody's previous rating action on Alpha Bank was on 24 April 2007, when it upgraded its long-term deposit rating to A1 from A3. Moody's previous rating action on EFG Eurobank Ergasias was on 7 October 2008, when it changed the outlook on the bank's ratings to stable from positive.
Moody's previous rating action on Piraeus Bank was on 24 April 2007, when it upgraded its long-term deposit rating to A1 from Baa1 and its bank financial strength rating to C from C-. Moody's previous rating action on National Bank of Greece was on 24 April 2007, when it upgraded its long-term deposit rating to Aa3 from A2.
Re-disseminated by The Asian Banker

5th Annual Greek Shipping Awards & Gala Dinner
Source: Lloyd's List

Piraeus Marine Club - Invites to Open House Christmas Party - 18 Dec. 2008
The traditional Christmas party is on Thursday 18 December 2008 at 13:30 hours and onwards.
With DJ music on the 7th floor. The Club's traditional buffet on the 8th floor and Sushi buffet on the 9th floor.
For further details contact: Ketty Vienna <>