Greek Shipping News Cuts
Week 50 - 2008


Global crisis will transform shipping financing methods

---Dubai: The shipping industry should think about ways of changing the way it is financed as it has followed the world financial markets down a deep hollow feeling the pinch of the global financial crisis, a conference at Seatrade Middle East Maritime heard yesterday.
Professor John Tzoannos, secretary-general of the ministry of mercantile marine for the Greek government, said capital requirements for shipping businesses and the liquidity squeeze may force companies to seek new financing alternatives.
"Private equity funds will come to play an increasingly important role, which was not done before. The crisis is a threat but should also be seen as an opportunity by the shipping industry," he said.
It was an opportunity because shipping would continue to be a lifeline for the global community with trade continuing to grow and the demand for water-borne transport.
Tzoannos said the first bankruptcies had already emerged in the industry and the downturn was likely to continue with banks increasingly reassessing the criteria and altering the terms of the loans they are offering. This was causing financing problems for shipping companies resulting in many orders for ships being cancelled.
The financial turmoil has caused the Baltic Dry Index to drop to its lowest since 1997. Bank loans to the industry have declined by 30 per cent in the last nine months, he said.
Culture of prudence
He added that while regional markets were "still enjoying a moment in the sun", they were not immune to the effects of the crisis.
"The Middle East and Asia are not fully immune to the impact of the US-led financial turmoil."
The Middle East may not be a haven away from the crisis but it could benefit from it too.
"The Middle East markets do not rely on the West for trade. In fact intra-Asia trade is among the largest in the world. The region will enjoy the best of both worlds; its markets are globalised to an extent but not completely.
"Regional markets are also not facing the demographic problem of ageing populations as the West is; therefore its financial exhausts would be used more for investments rather than paying out pensions."
Islamic financing is beneficial for the region as it led banks on the "right track," Tzoannos added.
"The mode of operating in Islamic financing is different... there is also a culture of prudence in the region's large banks," he said.
Gulf countries continue to invest in infrastructure and diversifying their economies through the oil revenues generated by a surge in the price of the commodity earlier this year, he pointed out.
Source: By Natasha Marrian, Staff Reporter, Published: December 17, 2008, 23:27,

Private Greeks well placed to prosper
---It is well nigh impossible to lump Greek owners together and draw a sensible conclusion about whether they are winning or losing.
First, there are simply so many of them. Secondly, they are secretive and third, according to one of their own sayings, when five Greeks are gathered together, you will hear six opinions.
Those who led the charge to Wall Street and the City have been mainly dry-bulk owners who are now unquestionably feeling the draught as their cancelled orders and filed warnings of possible problems show.
But on the private side, where the vast majority of Greek companies large and small are still firmly lodged, there have also been big winners that have played the boom market wisely and well.
One example, and a company that is often watched as an indicator of market moves, is Thanassis Martinos's Eastern Mediterranean Marine (Eastmed).
In November, Martinos snapped up two supramax bulkers at prices estimated to be down around 70% on July levels.
They were the first ships the company had purchased since it bought four tankers at the beginning of this year and the first bulkers purchased since September 2002. The owner quipped to TradeWinds that there had been no fleet renewal for a long time and "we have to do something to stay in business".
Eastmed's fleet is equally split between wet and dry. The two new acquisitions will bring its bulkers up to a total of 14, exactly equalling its tanker fleet.
The company's policy has always been to operate in the spot market and with six panamaxes, three supramaxes and three handy-maxes that likely had few or no financial obligations, it will surely have had an incredibly profitable ride through the boom market.
Another closely monitored owner is Marmaras Navigation, with a dry fleet of some 38 vessels ranging from capesizes to handysizes. The owner was a heavy buyer of secondhand tonnage in the past but appears not to have purchased any ships since it bought the capesize Zorbas (built 1996) for a mere $27m in July 2003. Owner Diamantis Diamantides turned to newbuildings when the cost of ordering a panamax bulker was around $20m to $22m. The company has 17 ships in its fleet delivered since 2002. But it also spread the risk by moving into the tanker sector through sister company Delta with a dozen ships in the water and a further 14 on order.
Diamantides appears to be fortunate even in misfortune. In September, the owner booked a pair of capesize newbuildings at Hyundai Heavy Industries at a reported $103m but unconfirmed reports earlier this month said the South Korean yard had allowed him to transfer the 20% down payment on the duo to his tanker-newbuilding programme and only charged him $6m to $7m in cancellation fees.
By Gillian Whittaker Athens
Published: 00:00 GMT, 19 Dec 2008 | last updated: 10:47 GMT, 19 Dec 2008

Greek newbuilding orders at lowest quarterly level in eight years
---GREEK shipowners ordered just one vessel in the last quarter of 2008, representing their lowest quarterly level of newbuilding ordering activity in eight years.
Piraeus-based George Moundreas Shipbrokers said only one bulk carrier had been ordered in the months of October, November and December to date.
The buyers of the only order, for an 80,000 dwt bulk carrier to be built in South Korea, have not been disclosed.
Mr Banos said a significant amount of those orders were concluded in August but not reported due to national holidays.
Potential bankruptcies of shipowners and shipbuilding yards had significantly affected the Greek sentiment over the past three months, he said.
Moundreas estimated that the number of newbuildings ordered by Greek shipowners in 2008 will reach 172 units, totalling 19.3m dwt. This includes 91 bulk carriers, 68 tankers and 13 other vessel types, worth $12.3bn.
In the last three months of 2007, 111 vessels were ordered worth $6.2m.
Mr Banos said he expected final 2008 newbuilding orders to be lower than 172 ships because of rising cancellations in recent weeks.
A London-based broker said there had not been any significant newbuilding orders since September.
Any revival in the newbuilding market would depend entirely on the health of the global financial markets and whether chartering rates rose, he said.
Greeks control the largest merchant fleet in the world, which stood at 4,173 ships or nearly 261m dwt in February 2008, according to the Greek Shipping Co-operation Committee.
This compared to 3,699 ships, or over 218m dwt, in February 2007.
Source:, Liz McCarthy - Tuesday 16 December 2008

Hellenic vessels turn to positive territory in October
Vessel numbers on the dry side show a marginal increase of 0.5%, while from a capacity point of view, the growth stands at 26%. This is easily translated to bigger bulkers entering the fleet, with capsizes proving to be the most popular type, albeit their uncertain future of late.
It may be noted that the Hellenic flagged fleet ranks third internationally and first in the EU in terms of DWT. Moreover, the Greek owned fleet under EU flags accounts for 44.1% of the EU DWT tonnage. Greek owners control 21.7% of the world tanker fleet and 20.4% of the world bulk carrier fleet in terms of DWT.
Source: Saturday, 20 Dec, 2008,

Greece proposes Piraeus base for sea-border agency
---Greece has reiterated its proposal that the operation to protect the seaborders of the European Union be run from Piraeus. Marine, Aegean and Island Policy minister, Anastasis Papaligouras said that by operating out of Piraeus, advantage can be taken of the experience gained by Greece in dealing with protecting its sea borders and those of other countries.
The minister was repeating a theme expressed by Prime minister Costas Karamanlis in October when he called for the establishment of an international specialised centre for the protection of Europe's south eastern borders.
Papaligouras, Greece's Interior minister Prokopis Pavlopoulos and the director of the border protection agency Frontex, Ilkka Laitinen, December 12 signed an agreement under with the Greek Harbour Corps is making a vessel of open type, its crew, an aeroplane and a helicopter available for surveillance of the sea borders of the EU under the coordination of Frontex.
Papaligouras said the agreement "underlines Greece's support of the targets of Frontex" and said he hopes Frontex "adopts our proposal that the headquarters be located in Piraeus".
On December 15 the Harbour Corps intercepted 121 illegal immigrants. Officials in the northwestern port of Igoumenitsa detained 54 people following the inspection of a truck that had been due to board a ferry for Italy. On the Aegean island of Samos, 67 would-be migrants were detained by the Harbour Corps.
-- Filed: 2008-12-16

---It is with deep regret that we have to report the death of shipowning entrepreneur Loucas Haji-Ioannou, which occurred on 17th December in Athens, aged 81.
He was one of the last of the Greek shipping entrepreneurs whose privately-owned fleets dominated the global shipping industry for most of the second half of the 20th century.
Born into an impoverished Greek Cypriot family in the Troodos mountains, the eldest of 12 children, he bought his first ship in 1959.
As the oil-fuelled Saudi construction boom gathered pace in the late 1950s, he became the sole importer of Heraklis and Titan cement and laid the foundations of his future wealth.
After taking advice from UK security specialists, Haji-Ioannou equipped his ships with a variety of extra safety systems, which enabled him to obtain insurance at much less punitive rates.
As one of the few owners prepared to lift oil from Kharg, his charter rates remained high and the resulting huge differential in profit margins meant that the purchase price of a tanker could be recouped within two round-trip voyages from Kharg to the safety of the Straits of Hormuz.
Always a workaholic, the strain of managing such rapid expansion took its toll on his health and in his later years Haji-Ioannou concentrated his attention on his philanthropic interests, endowing his Haji-Ioannou Foundation with over $10 mill.
The Foundation built a school in his home village of Pedhoulas in Cyprus and also supports drug rehabilitation programmes, marine environmental protection schemes and the Greek Institute of Cardiology.
Loucas Haji-Ioannou is survived by Nedi, his wife for 50 years and their three children Polys, Stelios, and Clelia.
Polys runs his own shipping fleet, Stelios is best-known as a serial entrepreneur and founder of easyJet, which he started with capital provided by Loucas, while Clelia is president of the Haji-Ioannou Foundation, a philanthropist in her own right and a noted art collector.
Source: (Dec 19 2008),

GMR and ATB Become One
We congratulate the parties on a well-structured transaction, which, being based upon an exchange of shares, was successfully concluded in these most turbulent of times.
Source:, Freeshly Minted online newsletter, 19 Dec 2008

Greek shippers sue FMG for breach of contracts
---Costas Paris | December 18, 2008, Article from: Dow Jones Newswires
A major Greek shipping company is suing Fortescue Metals Group for $US130 million for suspending long-term shipping contracts.
The Greek complaint is the latest case against the Perth-based miner, which said earlier this month that it was suspending long-term shipping contracts due to changed market conditions.
Splendour Special Maritime Enterprise, a subsidiary of Angelicoussis Group, said Fortescue cancelled a five-year charter and refused to take delivery of Anangel Splendour on December 8.
The ship was contracted in July.
Fortescue and Splendour Special Maritime were not immediately available for comment.
Fortescue said earlier this week it was facing legal disputes after it suspended shipping contracts in the face of sagging freight rates and that it was reviewing the legal status of the contracts.
The global slowdown has seen a sharp drop in freight rates from the record highs seen earlier this year, and Morgan Stanley analysts said Fortescue looks to have struck contracts at rates well above current prices.
Bulk carrier Armada (Singapore) has also filed a complaint against Fortescue seeking $2.5 million in damages for one contract it claims was breached in the fourth quarter.
Armada has contracts with Fortescue worth between $US200 and $US300 million, people familiar with the situation said.
Dow Jones Newswires

Greece Takes Measures against Fuel Smuggling
With annual revenues generated from illegal fuel smuggling in Greece reaching a staggering 3 billion euros, the trade has numerous ramifications, including the degradation of competition in the domestic market, the expansion of illegal activities in neighboring countries and the intrusion of organized crime syndicates in the energy sector.
Operation Poseidon
The action plan was developed by the Greek ministry of national economy, which is in dire need of capital. The plan involves techniques centered on the monitoring of the fuel trade in the country, so as to isolate instances of smuggling as they occur.
The financing of this project (further information, in Greek, can be found here) will be jointly shared by this Greek ministry and by the European Union. Further, according to information that is not yet verified, the Greek National Intelligence Service (NIS) will also provide know-how regarding the electronic monitoring of the smuggling networks.
Finally, the important port of Piraeus near Athens will in the near future get a Command & Control Center, from where the movements of every ship carrying fuel within the port zone can be monitored 24 hours a day.
This center will also be able to merge all electronic information being gathered via sensors in all vessels and fuel transport vehicles across the entire Greek territory. Sensors will be also placed in the taps of every unit that either carries or stores fuel. Thus, every time a transaction takes place, the center will be able to verify the quantity of the commodity that was either extracted or pumped in.
Source: Ioannis Michaletos, 15 Dec 2008,

Mitropoulos wins Greek Personality of the Year
Shipowner Nikolas Lemos took the Lifetime Achievement prize at the gala dinner, sponsored by Ernst & Young, which attracted 1,000 guests.
Sixteen awards were made during the evening. Anangel Maritime Services was recognised in the Dry Cargo Company category, Eletson Corp took the Tanker Company accolade, Anek Lines won the Passenger Line title and the award for shipbroker went to Carriers Chartering Corp.
Laboratory for Maritime Transport won the Piraeus International Centre award, the Safety and Environmental prize went to Basil Papachristidis, an icon of Greek shipping quality, Dimitris Tsalapatis was recognised in the Technical Innovation category, the Ship of the Year was the offshore vessel Toisa Pegasus and a new award for Education and Training was made to the Union of Greek Shipowners.
Seafarer of the Year was Tsakos Energy Navigation master Lazaros Vassiliadis, who was honoured for the dramatic rescue off Portugal in September when he and the crew of his vessel Parthenon saved four Swedish sailors from a distressed yacht.
The 2008 judging panel, in alphabetical order:-
Vasso Armogeni, Managing editor, Efoplistis magazine
Dinos Caroussis, Vice-chairman of the Greek Shipping Co-operation Committee
Nicos Efthymiou, President of the Union of Greek Shipowners
George Gratsos, President of the Hellenic Chamber of Shipping
Anna-Maria Monogioudi, President of WISTA Hellas
Spyros Polemis, Chairman/president of the International Chamber of Shipping and International Shipping Federation
Nicolas Tsavliris, President of Propeller Club, Piraeus; president of the Institute of Chartered Shipbrokers, Greek branch
Dean Tseretopoulos, Sole industry representative, IMO Advisory Group on Goal Based Standards; chairman (2004-08), Intertanko Safety, Technical and Environmental Committee
Source:, Nigel Lowry and Christopher Mayer, Athens - Monday 15 December 2008