Greek Shipping News Cuts
Week 06 - 2009


Veniamis elected Greek shipowners president

---As widely anticipated Theodoros E Veniamis has been elected president of the Union of Greek Shipowners (UGS) for the next three years, succeeding two-term president, Nicos Efthymiou. Elected by the 30-member board, Veniamis moves up from vice president after topping the USG membership poll, February 4.
Veniamis, 58, heads-up the Piraeus-based bulk carrier operations, Golden Union and World Management Inc, which have a combined fleet of some 28 bulkers of 2m dwt including ships on order. Efthymiou, who served the maximum allowable two terms, remains on the board joining his predecessor as president, John C Lyras, who was also re-elected. Veniamis, who served as a vp for six years, presides over an executive comprising: Christos F Kanellakis and Michael D Chandris, vice presidents; Panos C Laskaridis and Matheos D Los, secretaries and Leonidas J Demetriades - Eugenides and Anastasios V Papagiannopoulos, treasurers. Laskaridis is the only newcomer to this group with Chandris moving to vp from secretary previously. Kanellakis of Alpha Tankers and Freighters, has won a third consecutive term as a vp.
Though chairman of the London-based Greek Shipping Cooperation Committee, Epaminondas G Embiricos did not stand for re-election, the board contains the usual catalogue of very well-known shipping names, including John Angelicoussis; George Gratsos, who also serves as chairman of the Hellenic Chamber of Shipping; Nicky Pappadakis, who doubles as chairman of Intercargo; the Onassis group's John Ioannides; brothers George and Dimitris Procopiou of Dynacom and Centrofin respectively; Spyros M Polemis, the hard-working chairman of the ICS and president of the ISF; George S Livanos; Dinos Martinos; and the representatives of the US-listed companies, Evangelos Marinakis of Capital Shipmanagement; John Coustas of Danaos; and Nicolas P Tsakos of the Tsakos group. Sole woman on the board is Melina Travlou of Neptune Lines, who won re-election.
In his parting address to the agm, Efthymiou said the "present economic crisis could lead to sweeping changes in the world as we know it". On the one hand, he said there are many who believe the crisis "will see a return to the more traditional ways, as Greek shipping returns to its traditional roots". And, of course, "there are those who say shipping will be swept along with the ever changing environment".
"I believe the traditional Greek flexibility and adaptibility will overcome the challenge for a better future," said Efthymiou.
"The biggest challenge facing the industry is the lack of human resources with the necessary experience and know-how," he concluded.
New UGS president,Theodoros E Veniamis, topped the poll at the February 4 elections for the 30-member board. A full rundown of the voting (*) new member: Veniamis, 17,044 votes; Dinos Martinos, 15,144 (*); Nicos Efthymiou, 14,299; John P Ioannidis, 14,029; Christos Kanellakis, 13,516; John C Lyras, 13,437; Leonidas J Demetriades - Eugenides, 12,168; George A Gratsos, 12.035; Panos C Laskaridis, 11,268; John A Angelicoussis, 10,763; Anastasios V Papagiannopoulos, 10,619; Nicos Pappadakis, 10,170; George J Prokopiou, 10,149 (*); Nicos P Tsakos, 10,093; Michael D Chandris, 10,077; Constantinos V Constantakopoulos, 10,029; Costis E Kertsikof, 9,905 (*); George S Livanos, 9,718; George J Coumantaros, 9,492; Matheos D Los, 9,442; Dimitrios D Prokopiou, 9,127; Melina N Travlou, 8,735; Stephanos D Lecanides, 8,703; John A Xylas, 8,611; Evangelos M Marinakis, 8,421; John D Coustas, 8,297; Spyros M Polemis, 7,983; Loucas S Fafalios, 7,818; George D Dalacouras, 7,397; and Leon Patitsas, 5,502 (*).
Source: e-mail texts of: Friday 06 February 2009

Greek delivery tally set to fall
---Some Greek owners want to delay delivery of newbuildings in the face of a grim dry-bulk outlook.
Greek shipowners are expected to take delivery of around 120 new bulkers by the end of the year but fears that the dry-bulk sector is facing a prolonged downturn means the tally is very likely to fall as delivery dates are rescheduled.
Major contributing factors are the impact of collapsed and renegotiated charter deals and uncertainty over the ability of troubled yards to get ships out.
Many owners are looking to push back delivery dates. The number of deliveries scheduled for 2009 stood at around 130 last month, according to various databases. That has already come down and brokers expect more owners to delay deliveries, especially for ships slated to arrive in the second half of the year.
Athens-based, UK-listed Goldenport announced last week that it had shifted the delivery schedule for two of its supramaxes from 2009 to 2010. A number of other negotiations are currently underway, one senior broker reveals.
Reports have emerged linking US-based charterer Probulk to a number of collapsed long-term contracts starting in 2009 for newly delivered bulkers. According to brokers close to these deals, the operator was set to take a number of supramax newbuildings this year from European companies including Greek owners.
One Greek owner of dry tonnage says the situation looks dire for owners who ordered ships on the back of long-term charters that have either collapsed or are under pressure.
One year ago, owners who had wrapped up their long-term arrangements for 2009 deliveries fixed at $35,000 per day, according to brokers - but that has all changed.
A supramax that cost between $30m and $40m, depending on exactly when in 2007 it was ordered, will not be making a profit if the owner is having to cope with current spot rates.
The going spot rates are around $5,500 per day but operational costs still stand at $6,500 per day per ship on average as crew wages remain high. Then there are financing costs. If a company ordered a ship for around $40m, it now faces bank repayments of between $9,000 per day and $14,000 per day, according to one estimate, depending on the owner's credit-risk status with the bank.
But some owners looking for delays may be helped by the situation at shipyards, many of which are struggling with the downturn.
Analysts are now pondering whether to strike Target Marine off the list of 2009 deliveries. The owner was set to augment its fleet by eight ships this year, with deliveries starting in February and carrying through to December.
This was before South Korea's C& Heavy Industries ran into financial problems that could see it shut down. Target was set to receive seven 81,000-dwt bulkers of a series of 12 - for which it paid a reported $50m each. The owner is also expecting one other 58,000-dwt bulker from Tsuneishi Zhoushan.
The situation will inevitably become clearer as time goes by but there can be little doubt that some long-established owners in the sector will have no trouble coping with the depressed market. One Greek owner says many of his compatriots will likely be able to handle the crisis because they have just emerged from four years of high returns.
"People have cash reserves," he said.
Owners slated to receive tonnage this year include Peter Livanos's DryLog, which is expecting two handymaxes in the first half and two capesizes from Daewoo Shipbuilding & Marine Engineering by September. Lykiardopulo-controlled Neda Maritime is waiting for four capesizes from Daewoo, one capesize from Shanghai Waigaoqiao Shipbuilding and one supramax from STX Dalian.
By Yiota Gousas Athens
Published: 00:00 GMT, 06 Feb 2009 | last updated: 09:13 GMT, 06 Feb 2009

Cash buyers enjoy cherry-picking
On the other hand, a more optimistic case for second-hand ship values can be made against a backdrop of frenetic scrapping activity, newbuilding order cancellations across the board and a gradually firming dry market, led as usual by Capesize timecharter rates that are beginning to look vaguely respectable once again. Despite financing difficulties faced by some buyers, the level of purchase interest in bulk carriers from cash buyers cannot be said to indicate a market where there is any fundamental lack of demand.
Source: Fairplay International Shipping Weekly - Sale And Purchase 05 Feb 2009

Setting the course for shipping checks
The Competition Commission has struck a blow to the oligopoly in the Aegean Sea on coastal shipping with its decision yesterday to impose a fine on Sea Star Capital Plc.
However, the commission has confirmed by various research that Sea Star controls both Hellenic Seaways and ANEK. In the same decision, the Competition Commission has asked the General Directorate for Competition to launch a thorough probe into the possible competition distortion of this concentration in coastal shipping. This will allow for a full check on shareholders of all other companies, to locate any possible similar phenomena.

Greek Shipowners Union on piracy
---Feb 4, 2009 Greek Shipowners Union (EEE) President Nikos Efthymiou, speaking at a press conference on Tuesday, termed piracy a curse, adding that piracy has preoccupied the EEE a great deal, as well as many countries.
As the result of an initiative by the International Maritime Organisation's (IMO) secretary general Mitropoulos and the UN, an effort has begun and there has been considerable activity to tackle the problem.
In parallel, the European Union has also become sensitised over the problem, while the Greek government was among the first to send a warship to the region where there is an upsurge of the phenomenon and now the Greek government is participating in the EU's operation "Atalanta" to combat piracy, he added.
Efthymiou also referred to the economic crisis, stressing that it is affecting shipping, but shipping has no responsibility for it since it is a crisis of the international monetary system. The violent collapse of dry cargo markets, as he said, is the result of reduced consumption.
Source: Athens News Agency, Greece

London Greek owners slam Mangouras appeal ruling
---Monday, 02 February 2009. THE London-based Greek Shipping Co-operation Committee has spoken out forcefully against the appeal ruling by European Court of Human Rights in the case of the master of the ill-fated tanker Prestige, Apostolos Mangorous.

Sea Star to appeal against $4.7m fine
---Nigel Lowry, Athens - Thursday 5 February 2009
In a statement to the Cypriot stock authorities, Sea Star said it was confident it would successfully appeal against the fine in the Greek courts, but warned that its results for 2008 would be negatively affected.
Sea Star said it would maintain its investment plans for both the Greek and the wider European market.

Ship officials plead guilty in pollution conspiracy
---The master and chief engineer of a cargo ship pleaded guilty yesterday in federal court to conspiring with a Greek ship-management company to falsify the ship's records on disposal of oily waste, acting U.S. Attorney Laurie Magid said.
Nestor Alcantara, 52, master of the Quantum, was sentenced to three years' probation, a $1,000 fine, and a $200 special assessment. Chief engineer Alfredo Onita, 50, was sentenced to three years' probation, a $500 fine, and a $200 special assessment. Both are citizens of the Philippines. Last month, Pendulum Shipmanagement Inc. was fined $1.3 million.
According to the U.S. Attorney's Office, the Quantum arrived in Philadelphia in July. The Coast Guard found evidence that its pollution-prevention equipment was not working properly and that the ship had discharged oily waste directly overboard since at least May.
The ship's records falsely indicated the oily waste was properly processed and failed to account for the discharge of oily bilge waste. The ship's records also failed to account for the discharge of oil-contaminated ballast water directly into the ocean in February, the U.S. Attorney's Office said. - Inquirer staff
Source: posted on Thu, Feb. 5, 2009

Goldenport Freebie
---This week Goldenport announced that it had reached an agreement with COSCO (Zhousan) Shipyard to re-schedule the delivery dates of four newbuild 57,000 DWT bulkcarriers at no additional cost.
The new delivery dates for these four vessels will now take place between four and eighteen months after their originally agreed dates in late 2009. Financing remains in place as does the existing charters that will commence upon delivery.
This was a great deal for both the owner and charterer. Goldenport gets to optimize its cash flow during this deferral period and the charterer takes delivery later when hopefully charter conditions have improved. Cooperation works wonders.
Source: Freshly Minted by Marine Money editors - Blackberry Version - February 5, 2009

Seanergy Maritime Holdings Corp. Receives Waiver On Loan Covenant

Angeliki Frangou, Chairman and CEO of Navios Maritime Partners L.P. (NYSE: NMM) Discusses the Dry Bulk Sector and NMM
---Monday February 2, 9:00 am ET, Interview With Barry Parker of BDP1 Connect
NEW YORK, NY--(MARKET WIRE)--Feb 2, 2009 -- Angeliki Frangou, Chairman and CEO of Navios Maritime Partners (NYSE:NMM - News) was interviewed today by Barry D. Parker of BDP1 Connect. The interview focused on the development of Navios Maritime Partners and on the dry bulk sector in general. Please find below the interview in its entirety. An audio file of the interview can also be accessed on
Barry Parker: We have with us today Mrs. Angeliki Frangou, the Chairman and CEO of Navios Maritime Partners. Navios Maritime Partners is a publicly traded master limited partnership (NYSE:NMM - News) formed by Navios Maritime Holdings Inc (NYSE:NM - News) and is an owner and operator of Capesize and Panamax vessels transporting dry bulk cargoes.
Angeliki, tell us what drives the NMM story. You just had another strong quarter with strong performance and results in line with your expectations, when other companies in your sector have been suffering, showing significant decline in revenues and profitability. Can you explain how you have accomplished this?
Angeliki Frangou: This has to do with our business model which has certain structural advantages over other dry bulk players, virtually all of whom have eliminated dividends.
As you know, Navios Partners operates modern vessels with charters-out averaging approximately 4.4 years. This is especially favorable when you consider that many of our dry bulk companies have less than two years of charter coverage. Thus, when the market dropped precipitously, the charter renewals for our competitors will be particularly damaging for their earnings. In contrast, we can observe the market for a significant time as we have 100% charter coverage for our fleet for 2009 and 2010 and 80% for 2011. Therefore, we expect to be able to charter the vessels that open up at that time in a more favorable market environment.
We have also been selective about our counterparty risk in the form of charter parties. After all, the charter agreement and related cash flow are only as strong as the underlying signature. A piece of paper promising to pay significant amounts is of no value if there is large doubt of payment in difficult markets.
At least as important as the quality of our counterparties is the care we have taken to insure that we will be paid should an unforeseen event overtake one of our charter parties. Moreover, we have insured each of these charters, for the length of the entire agreement, through a double "AA+" rated European Union government entity. The terms of the coverage require that if the charterer does not pay, the insurance kicks in and scheduled payments are made by the insurance company during the remaining term of the charter.
We also have several other structural advantages. Our fleet is relatively young, with an average age of 6 years as compared to the global dry bulk fleet with an average age of 15 years. Also, our operating costs are fixed until November 2009.
Barry Parker: The insurance feature that you mentioned is very interesting. What kind of insurance is it? Is it different from a loss of hire insurance; is it a form of credit type insurance?
Angeliki Frangou: It is credit default insurance. If the counterparty does not perform for any reason and goes into payment default, all we have to show is the non-payment and the insurance kicks in allowing us to collect under it for the duration of the charter.
Barry Parker: This is quite unique. I hope you never have to collect under this insurance but at the same time I am sure it enables everyone to sleep better at night knowing that this type of protection is in place.
Angeliki Frangou: Of course, yes, it does allow a great deal of comfort.
Barry Parker: Why are you increasing your dividend payout, when other companies eliminate or decrease their dividend? Is this sustainable? Would you increase it further in the future?
Angeliki Frangou: We increased our dividend by 4% since Q3 2008 and by 14% from November 2007. So, as you can see, we have a very consistent growth pattern. For Q4 2008, we declared a cash distribution of $0.40 per unit, which is $1.60 on an annualized basis, and this represents an annualized dividend yield of close to 20% at current stock market levels. We have significant forward visibility that allows us to make these determinations. First, Navios Partners operates vessels with charters-out averaging approximately 4.4 years. Second, we have been selective about counterparty risk and have insured each of these charters, for the length of the entire agreement, through a double "AA+" rated European Union government entity. Third, have controlled our operating costs, which are fixed through November 2009 through an agreement and given the current deflationary environment these expenses may be even lower when this agreement expires. We also have a significant capital reserve account with an operating surplus after the replacement capex which further enhances our forward visibility.
Barry Parker: Let's switch now to questions on the industry. Why did we have such a sharp decline in the spot rates for dry bulk shipping? Is this a reflection of lack of trade financing, decreased demand from importing countries or what else?
Angeliki Frangou: In essence trade financing was completely absent in the market in the 4th quarter of 2008. This more than anything else caused the deteriorating of the market. I think from that moment we have seen some recovery.
Rates have rebounded from their low in December with the Baltic Dry Index up more than 50% from 650 to over 1,000. Of course we cannot compare them to their pre-September levels. It will take some time for the market to recover to those levels. There has also been some unclogging of the credit markets.
Dry bulk shipping is essentially a logistics provider to the infrastructure development and the underlying dynamics are healthy for infrastructure development. Urbanization is irreversible. The IMF projects that emerging markets will grow by more than 3% and China by almost 7%. Fiscal stimulus will include significant amount for shovel ready projects. All of these will drive the dry bulk industry.
So I think that should see further recovery in the dry bulk sector especially as of the second half of 2009.
Barry Parker: What is the catalyst that could turn freight rates around? Is it the continuation of investment in infrastructure?
Angeliki Frangou: The drivers in dry bulk are infrastructure development and urbanization. We know that urbanization will continue. China will be growing even in 2009. If you take the latest estimates of the IMF, China's GDP is expected to grow by 7%. This may not seem large in light of China's recent history but it still represents significant growth for one of the world's largest economies. So, urbanization and infrastructure development will kick in and give some vitality to the dry bulk market. It will not happen automatically, it will take some time but the trend is there and I think we saw the worst in the last quarter of 2008.
Barry Parker: How can the Chinese $600 billion stimulus plan affect economic growth in China and demand for commodities?
Angeliki Frangou: We anticipate that this stimulus package will be focused at infrastructure development, as it employs many and continues to create the infrastructure necessary for the urbanization that must be extended. As such, this will benefit dry bulk tremendously. Also, you have to look at what the USA is doing with its close to $900 billion stimulus package, a significant portion of which will go into infrastructure projects. So, all this will ultimately have some effect on the dry bulk market but it will take some time, maybe a couple of quarters.
Barry Parker: Let me now pass from the demand to the supply side of shipping. Have there been a lot of cancelations of new buildings? How will this affect the supply/demand balance in dry bulk shipping?
Angeliki Frangou: Reaching equilibrium for the number of vessels is critical for the health of the dry bulk industry. The underlying dynamics driving our industry, infrastructure development in emerging markets, continue. Today, we are critically reviewing two streams of data -- new builds and scrapping.
In terms of new build vessels, we anticipate that around 50% of new builds previously announced will not be delivered. Ironically, many of these cancellations will be driven by the lack of financing. This lack of financing would affect both the number of shipyards building vessels as well as the number of vessels.
In terms of scrapping, we have seen scrapping greatly accelerate from less than 1/4 of 1% over the past few years to over one percent last year. Scrapping is accelerating as almost 30% of vessels in the water are over 20 years of age... so these vessels are prime candidates to be scrapped and this process is picking up pace. Just to give you an idea, in Q4 2008, it was the first time in recent history that the deliveries of Capesize newbuildings were less than those scrapped.
So, as much as the credit crisis is overall a negative development, when it comes to the supply side, it has a positive effect on the supply side of vessels.
Barry Parker: Let me ask you a final question. Given the insurance you have on your charterers, this is not something you have to worry about, but if we refer to the wider industry, what is the situation with charterers? Are we likely to see more renegotiations / defaults?
Angeliki Frangou: Charterers will ask for relief and there may be some negotiations. However, in the case of Navios we have taken two steps that offer significant protection.
First, we have been extremely selective about the quality of our charter parties. We are virtually the only company with an e credit committee that carefully monitors the credit quality of current charter parties as well as screen proposed charter parties.
Second, we have insured all of our charters with an AA+ EU governmental entity, so we are not compelled to accept any offers. Indeed, under the terms of our insurance, the entire charter is covered -- both in terms of amount as well as over the period, with the insurance company picking up the payments the charter party had to make.
About Barry Parker:
Barry Parker is a financial writer and analyst. His articles appear in a number of prominent maritime periodicals including Fairplay, Seatrade, Lloyds Shipping Economist and James Transport Finance and Capital Link Shipping.
Source: Press Release Source: Capital Link Shipping,