Greek Shipping News Cuts
Week 23 - 2009
Despite surging freight rates, Greek shipowners continue to stand firm regarding ordering new ships, with no new order being placed in May, the seventh month of no activity in this direction. Instead, order cancellations are coming to the surface.
Piraeus-based broker George Moundreas & Co remarked in its latest NB report: "It is hard for a shipyard to admit it has offered discounted prices for a client, when all other customers will ask for a discount as well? At the same time, how can a ship owner break the code of conduct, which stipulates that no fleet data readjustments are to be made public?"
Moundreas says that despite all the rumours, order cancellations, thus far, are lower than initially thought. Instead, negotiations for cancellations have been put on hold or even aborted, as a result of the latest rally of the dry bulk freight rates. Still, Moundreas sees a pretty dull summer on the contracting front, with perhaps just a few orders for dry bulk carriers, as tankers and container ships are the least sought after ships right now.
There was one notable cancellation by Greek interests in this past week, with US-listed DryShips confirming it has cancelled a deal for a capesize bulker under construction in South Korea. It came at a price, as the Nasdaq-listed company had paid out $42.8m of the $114m contract price for the 180,000dwt Hull 2089. "This cancellation reaffirms the company's strategy to cut down our capex requirements," said ceo George Economou in a statement. He said the "cancellation is consistent with our continued position to evaluate all of our funding options which includes potential further capex reductions, fleet additions, equity issuances and debt placements." This cancellation will further reduce DryShips' 2009 capital expenditures by $71.2m.
Meanwhile, Poland's Gdansk Shipyard has been saved from possible bankruptcy after winning support for its restructuring programme in Brussels. The yard faced having to repay aid from the state and lose access to a government loan to settle its debts if the European Commission (EC) had rejected its proposals.
Following a meeting in Brussels with Polish Treasury minister, Aleksander Grad, Competition commissioner Neelie Kroes said Gdansk's restructuring plan has "improved significantly and we are now on the path to a decision to approve the aid received."
SALE & PURCHASE
On the back of rising freight rates activity in the s&p market continues to gain steam, with Greek and Chinese players leading the way. Indeed, each is selling ships to the other, with the Chinese, for the present, the key buyers, with the country's private owners particularly hungry for dry-bulk tonnage, with an increasing number of older units going to the Far East.
Some brokers say ship sellers are pleased to have found a willing buyer of tonnage, even if it means keeping ships trading which should be on the way to the breakers. Among several sales of previously unreported panamaxes to the Chinese is Hellenic Star's Korean-built, 63,000dwt Sea Charm, built 1982, which has gone for just $3.5m.
In all, Greek interests are seen to be involved in almost 20 deals this week, the highest number for many, many months. Five of the sales involved confirmed scrap deals, with a number more said to be in the pipeline. Reefer operator Laskaridis is said to be ready to shed more older reefer units.
Goldenport Holdings/Paris Dragnis has sold the dryEbulk carrier Gianni D to the unaffiliated third party, Intrigue Shipping, Efor $20m, a deal expected to realiseEaEbookEprofit of $11.1m. The vessel is essentially debt free andEGoldenport will utiliseEsaleEproceeds toEfurtherEstrengthen itsEbalance sheet. Captain Dragnis, ceo commented: "Within the context of our continued fleet renewal, we are pleased to take advantage of theErecent rebound in the dry cargoEmarket and realise an attractive profit on the sale ofEGianni D."
A Greek owner has purchased the 30,900dwt bulker Darin Naree, built 1984, from Thailand's Precious Shipping paying $4.2m. The Darin Naree is the 13th elderly bulker Precious has shed this year.
There has been some action in the energy sector. The Tsakos Group has sold the single hull VLCC El Junior (ex-Tohzan), 260,870dwt, built 1995 in Hitachi Zosen, for $17.5m to unidentified Chinese buyers for conversion. Greeks are buyers of the 2002 Japanese-built double hull Spirit Express, 45,861dwt. Japan's Toyo Senpaku has sold the ship for a reported $25.5m to Greeks, with brokers saying the buyer is possibly Aegean Shipping Management, controlled by Dimitris Melissanidis. It has been confirmed that the Melissanidis-controlled US-listed Aegean Marine Petroleum Network has taken delivery of the ITB Provider, a 2001-built 2,315met tonne double-hull barge to be renamed PT 22, from an unrelated third party. The barge, which was previously chartered to a Canadian-based subsidiary of Exxon Mobil, is expected to be deployed to Aegean's Vancouver bunkwe market.
At week's end there were reports US-listed Harry Vafias-controlled StealthGas was negotiating the sale of the LPG carrier Gas Sophie, 2,609dwt, built 1995, to Indonesian interests. A price in excess of $6m is said to be on the table.
Meanwhile, the market continues to buzz over rumours TOP Ships is up for sale, with George Economou said to be renewing interest in the company. TOP Ships is due to release its first quarter 2009 trading results on June 5, and with a considerable improvement expected, coupled with the market gossip, the Nasdaq-listed company's share price went up more than 100% in week 23. Economou, a shareholder in the Evangelos Pistiolis-led TOP, made an unsuccessful bid for the company last autumn.
Waiting for the wind to change
---Greek owners were wrong-footed when the shipping crisis arrived a year earlier than they expected. Now, many of them are feeling highly exposed to a volatile economic climate. Konstantin Tsolakis reports
Are the Greeks following the example of their neighbours across the Aegean and working together in tackling the crisis? Regrettably not, said Panagiotis Koutsomitopoulos of Tsakos Group, which has one of the largest Greek fleets, renowned for its quality.
Greece at a glance
GDP: $355.4Bn (2008) $320.1Bn (2009 est)
GDP growth: 2.9% (2008) -1.2% (2009 est)
GDP per capita: $31,700 (2008) $28,510 (2009 est)
Inflation: 4.2% (2008) 1.3% (2009 est)
Unemployment: 7.6% (2008) 9% (2009 est)
Exports (BOP): $29Bn (2008) $23.1Bn (2009 est)
Imports (BOP): $93.4Bn (2008) $68.8Bn (2009 est)
Export partners: Germany 11.4%; Italy 10.7%; Cyprus 6.5%; Bulgaria 6.4%; UK 5.4% (2007)
Import partners: Germany 12.9%; Italy 11.7%; Russia 5.6%; France 5.6%; China 5% (2007)
Source: IHS Global Insight
Source: Fairplay International Shipping Weekly - Cover Story 04 Jun 2009
Laskaridis leads charge to scrap
---A Greek player may be starting a demolition trend with the sale of three medium-size reefers.
Laskaridis Shipping of Greece is leading the way with a fresh round of scrapping deals in what many hope will be a continuing trend among reefer owners.
The company has sold three of its medium-size reefers to Indian scrappers at undisclosed rates. The 383,000-cbf Ravenna (built 1982) is understood to have gone for around $1.2m, 420,100-cbf Padoova (built 1983) for about $1.2m and 459,900-cbf Snowfrost (built 1979) for around $1.6m.
A number of reefer scrappings have surfaced in recent weeks, bringing the tally for 2009 to around 20 ships from eight just over a month ago. So far it is estimated that around eight million cbf has been scrapped this year.
New York-based Eastwind has emerged as having scrapped three of its older reefers, namely the 321,000-cbf EW McKinley (built 1983), 334,000-cbf Ariake Reefer (built 1980) and Fuji Reefer (built 1979).
Two other reefers owned by now-defunct Russian operator Sorus have also been added to the scrap tally - the 341,000-cbf Aurika (built 1979) and 574,200-cbf Pietari Bruin (built 1980).
Owners and brokers are expecting more 30-year-old reefers will be sold to scrappers during the summer months.
Owners are currently weighing up the options to either scrap ships or put them into layup as summer-income levels are low. Such older ships have enjoyed firm incomes in the past five years but this year a number of factors have worked against them, including an influx of containerships looking for work on reefer-trade routes, resulting in what is expected to be an oversupply of reefers until the end of the year.
With less tonnage on the market, observers are expecting earnings to remain steady at just above break-even levels for the next four months, until produce volumes pick up again.
By Yiota Gousas Athens
Published: 23:00 GMT, 04 Jun 2009 | last updated: 10:13 GMT, 05 Jun 2009
Sale of vessel with a book profit of US$ 11.1 million
---Athens, 3 June 2009. Goldenport Holdings Inc. ("Goldenport" or "the Company"), (LSE: GPRT) the international shipping company that owns and operates a fleet of container and dry bulk vessels announces that it has concluded the sale of the Panamax dry bulk carrier 'Gianni D', to the unaffiliated third party "Intrigue Shipping Inc" of Liberia, for a cash consideration of US$ 20.0 million. The vessel is expected to be delivered charter free to the new owners by mid-August 2009.
Goldenport expects to realize a book profit of US$ 11.1 million, after accounting for brokerage commission and the unamortized balance of dry-docking.
The vessel is essentially debt free and Goldenport will utilize the sale proceeds to further strengthen its already strong balance sheet.
Captain Paris Dragnis, Chief Executive Officer of Goldenport, commented:
"Within the context of our continued fleet renewal, we are pleased to take advantage of the recent rebound in the dry cargo market and realize an attractive profit on the sale of 'Gianni D'. Our dry bulk fleet now includes 1 Capesize and 12 Supramax vessels, of which 7 are new-buildings with deliveries due to be completed by 2011.
"Our strong forward time charter coverage in both segments in which we operate, our new-building program and our strong balance sheet, enable us to feel confident about the future growth prospects of our business even in today's difficult environment and puts us in a position to take advantage of accretive fleet expansion opportunities as these may occur."
Source: Goldenport Holdings Inc., Website: www.goldenportholdings.com or www.goldenport.biz
Omega Navigation bullish on future prospects
---(June 5 2009). Omega Navigation Enterprises has reported total revenues of $18.7 mill and net income of $6.3 mill, or $0.41 per basic share for 1Q09.
This excluded a loss on its interest rate derivative instruments, a gain on warrants revaluation and incentive compensation grants expense. Including these items the company reported net income of $5.7 mill or $0.37 per basic share.
EBITDA for the first quarter was $13.2 mill. Operating Income included revenue of $1.7 million attributable to profit sharing on charters of the 'Omega Lady Miriam' and 'Omega Theodore' generated primarily in the fourth quarter of 2008.
Excluding profit sharing, the Panamax product carriers in the fleet earned an average TCE rate of $24,486 per day per vessel during 1Q09, versus $25,076 per day per vessel during 1Q08. The Handymaxes earned an average TCE rate of $20,746 per vessel per day during 1Q09, against $20,759 per day per vessel during 1Q08.
Since the inception of the product tankers' charters through the end of 1Q09, the profit sharing element of those charters that Omega has, or is entitled to receive, amounted to around $13.9 mill. The company had already received $12.4 mill of cash and has recorded profit share revenues of $12.5 mill, and currently expects to record an additional $1.4 mill in the following quarters for voyages performed through 1Q09.
Source: http://www.tankeroperator.com/news/todisplaynews.asp?NewsID=1261 ( Tanker Operator is published by Digital Energy Journal Ltd )
TOP Ships Reports First Quarter 2009 Financial Results
---ATHENS, Greece, June 5 /PRNewswire-FirstCall/ -- TOP Ships Inc. (NasdaqGS: TOPS) today announced its operating results for the first quarter ended March 31, 2009.
For the three months ended March 31, 2009, the Company reported net income of $1,370,000, or $0.05 per share basic and diluted compared with net loss of $18,841,000, or $0.93 per share, for the first quarter of 2008. The weighted average numbers of common shares used in the computations were 27,522,092 and 20,295,240 for the first quarter of 2009 and 2008, respectively. For the three months ended March 31, 2009, operating income was $2,357,000, compared with operating loss of $2,434,000 for the first quarter of 2008. Revenues for the first quarter of 2009 were $29,793,000, compared to $72,637,000 recorded in the first quarter of 2008.
Evangelos J. Pistiolis, President and Chief Executive Officer of TOP Ships Inc., commented:
We are happy to report one more profitable quarter in a very challenging economic environment. Some of the most important developments that have taken place until today are the following:
>As of March 31, 2009, we were not in compliance with certain loan covenants under our loan agreements. We have received or agreed to receive waivers on covenant breaches until 31 March 2010 from four out of five banks, representing approximately 85% of our total indebtedness.
>Specifically, we have received waivers from HSH Nordbank and Alpha Bank on certain covenant breaches until 31 March 2010, representing approximately 54.6% of our total indebtedness.
>We have agreed to receive waivers, subject to completion of legal documentation, from DVB and Emporiki Bank on covenant breaches until 31 March 2010, representing 30.6% of our total indebtedness.
>We are currently in discussions with RBS regarding waivers until 31 March 2010.
>We took delivery of five out of six of our newbuilding product tankers. Our final newbuilding is scheduled to be delivered during the second quarter of 2009.
>In April 2009, we agreed with the owners of the M/T Relentless to terminate the bareboat charter. Under this agreement, during the 3rd quarter of 2009 we will redeliver the M/T Relentless to its owners and pay a termination fee of $2.5m. The bareboat charter would have expired in 2012.
On February, 2009, the Company took delivery of the vessels Miss Marilena and Lichtenstein from SPP Plant & Shipbuilding Co., Ltd of the Republic of Korea. Miss Marilena and Lichtenstein are the two out of six 50,000 dwt product / chemical tankers to be delivered within the first and second quarter of 2009. Miss Marilena and Lichtenstein entered into a bareboat time-charter employment for a period of ten years at a daily rate of $14,400 and $14,550, respectively.
On March 19, 2009, the Company took delivery of the vessels Ionian Wave and Tyrrhenian Wave from SPP Plant & Shipbuilding Co., Ltd of the Republic of Korea. Ionian Wave and Tyrrhenian Wave are the third and fourth out of six 50,000dwt product / chemical tankers to be delivered within the first and second quarter of 2009. Ionian Wave and Tyrrhenian Wave entered into a bareboat time-charter employment for a period of seven years at a daily rate of $14,300, with three successive one-year options at a higher daily rate.
On May 22, 2009, the Company took delivery of the vessel Britto from SPP Plant & Shipbuilding Co., Ltd of the Republic of Korea. Britto is the fifth out of six 50,000dwt product / chemical tankers to be delivered within the first and second quarter of 2009. Britto entered into a bareboat time-charter employment for a period of ten years at a daily rate of $14,550.
Liquidity and Capital Resources
Loan Covenants and Discussions with Banks
As at March 31, 2009, the Company was not in compliance with certain of its loan covenants.
As of the date of this release, the Company had received certain waivers on these covenant breaches until 31 March 2010 from HSH Nordbank and Alpha Bank, representing approximately 54.6% of total indebtedness as set forth below
The Company has entered into amendatory agreements with HSH Nordbank under its Bulker Financing Facility, initial amount of $95m / outstanding as of March 31, 2009 of $51.1m, and the Product Tanker Financing Facility, initial amount of $121m / outstanding as of March 31, 2009 of $92.8m. These amendatory agreements mainly provide for: (1) waiver regarding financial covenants through March 31, 2010, except for adjusted net worth for which a waiver has not been received yet (2) waiver for asset coverage covenants through March 31, 2010 (3) an increased applicable margin; (4) an amendment fee; (5) cross collateralisation of the two facilities.
The Company has entered into amendatory agreements with Alpha Bank under its Bulker Financing Facility, initial amount of $48m / outstanding as of March 31, 2009 of $34.8m, and the Product Tanker Financing Facility of $39m. These amendatory agreements mainly provide for: (1) a waiver regarding financial and asset coverage covenants through March 31, 2010; (2) an increased applicable margin; (3) cross collateralisation of the two facilities.
In addition, the Company has agreed with DVB and Emporiki Bank to receive waivers until 31 March 2010, representing approximately 30.6% of total indebtedness. The agreements are preliminary and are subject to execution of definitive documents whereby certain terms of the existing financing agreements, will be amended.
Finally, the Company is currently in discussions with RBS in order to receive waivers until 31 March 2010. The outcome of these discussions remains unknown.
Due to the fact that the Company has not yet reached definitive agreements with all its banks with regards to covenant breaches, it has in this release an unclassified balance sheet which does not show a breakdown of its debt and swap facilities into current and long term.
If the Company receives waivers from all its lenders then the debt and swap facilities would be classified as current and long term portions based on when the installments fall due. If the Company cannot obtain covenant waivers from all of its lenders, all outstanding loan balances will be classified as current as a result of cross default covenants attached to all loan agreements. In addition, the Company may be in non-compliance with these or other covenants, such as minimum liquidity, in future quarters to the extent it has not received waivers for such non-compliance.
If the Company is not able to obtain covenant waivers or modifications, for current covenant breaches or for covenant breaches that may occur in future reporting periods, its lenders may require the Company to post additional collateral, enhance its equity and liquidity, increase its interest payments or pay down its indebtedness to a level where it is in compliance with its loan covenants, sell vessels, or they may accelerate its indebtedness, which would impair its ability to continue to conduct its business. In order to further enhance its liquidity, the Company may find it necessary to sell vessels at a time when vessel prices are low, in which case it will recognize losses and a reduction in its earnings, which could affect its ability to raise additional capital necessary for the Company to comply with its loan covenants and/or the additional lender requirements described above.
Source: Press Release
DryShips pays hefty cancellation penalty
---June 2, 2009 DryShips Inc. (NasdaqGS:DRYS) is to pay a total $42.8 million in penalties to cancel the previously announced acquisition of a 180,000 dwt Capesize newbuilding, Hull 2089, currently under construction in South Korea, for a contract price of $114 million. The cancellation penalty includes the initial deposit of 20%.
DryShips says the cancellation will further reduce its 2009 capital expenditures by $71.2 million.
George Economou, Chairman and CEO commented: "This cancellation reaffirms the company's strategy to cut down our CAPEX requirements. This cancellation is consistent with our continued position to evaluate all of our funding options which includes potential further capex reductions, fleet additions, equity issuances and debt placements."
Kiriacoulis Mediterranean Cruises Shipping: Announcement
---Friday, 5 June 2009 - 17:08. Following the Board of Directors decision of 2.6.2009 and in accordance with the company?s Articles of Association, the shareholders of "KIRIACOULIS MEDITER-RANEAN CRUISES SHIPPING S.A." are invited to the Ordinary General Assembly, on Tuesday, 30 June 2009, at 16.30 p.m. at the Company offices, in Alimos - Attica, at 7, Alimou Ave., for discussing and taking decisions on the following issues:
Agenda of the meeting
4. Election of auditors (regular/alternate) for the period 01.01.2009 to 31.12.2009 and fixing of their fee.
5. Approval of the distribution of the profits.
6. Approval of the remuneration and expenses paid to the members of the Board of Directors and fixing of the relevant future remuneration and expenses.
7. Ratification of the election of a Board member.
8. Election of new members to the Board of Directors.
ABS Fleet Breaks 150m gt Mark
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