Greek Shipping News Cuts
Week 24 - 2009
--- Over the past few years the Greek-controlled fleet has been growing in capacity, and ship numbers, but the number of companies operating the fleets has been declining. Indeed, a look at the s&p and scrapping scenes reveals at least 13 companies operating ships at the beginning of 2009 are now without any units, reversing a trend of 2007.
Data collected for its annual mid-year round-up by Naftiliaki Greek Shipping Review reveals a record 57 Greek-controlled operations are running fleets of over 1m dwt. This is four fleets more than at the same time in 2008 and is two more than the previous high of 55 in 2007 and seven more than at mid-May 2006. And the 2009 list of 'tonne millionaires' is one of growth, with none of the former members failing to hold their place, something, Naftiliaki says has not happened for a number of years.
The study by Naftiliaki, which is from the same publishing stable as Newsfront, notes it was not easy to collect the information as activity picked up in the s&p ring and indeed a number of companies listed in the big league have, in the past few weeks, been active as both buyers and sellers of tonnage.
Of the 57 largest owners, 16 are listed on the stock exchanges of New York and London. All have used their IPO cash to grow their fleets. US-listed dry bulk operators, Star Bulk Carriers, Eagle Bulk and Safe Bulkers are newcomers to the league while Dimitris Papadimitriou's Liquimar Tankers, re-joins after slipping out last year.
Newcomer Polys V Hajioannou's vehicle Safe Bulkers, just squeezes in - 13 bulkers of 1.06m dwt, to join cousin Polys L Haji-Ioannou/Polyar Tankers, a longstanding member of the group and now in position 10, with 36 ships of 4.46m dwt.
As operators of some 153m dwt and 1,642 ships Greece's 'tonne millionaires' run a staggering 87.36% of the estimated 175.49m dwt of trading ships controlled by Greeks and 53% of the units. A year ago the 'tonne millionaires' controlled 140.8m dwt and some 1,499 ships, 85.5% and 50% respectively of the total Greek fleet. In 2007 they controlled 133.528m dwt and 1,425 ships. At the millennium there were 39 'tonne millionaires' operating 88m dwt and just over 1,000 ships, 55.3% of the then total tonnage and just under 30% of the ships.
John Angelicoussis-controlled energy interests remain the country's largest operation. Maran Tankers Management, formerly Kristen Navigation/Maran Gas has a fleet of 45 ships of just over 10m dwt, all under the Greek flag, four ships and 890,000dwt more than at mid-May 2008. In addition, the Angelicoussis bulk carrier operation, Anangel Maritime Services, has an all Greek-flag fleet of 24 bulkers of 3.95m dwt, making it 12th fleet on the ladder.
-- Filed: 2009-06-09
Greece's 'tonne millionaires'
www.newsfront.gr, 12 June 2009
Rank....OWNERS................................... DWT ......... SHIPS
1. Maran Tankers /Marangas.................10,082,018........45
3. Tsakos / TEN....................................7,344,230........72
4. P. Georgiopoulos...............................6,104,250........62
5. Frangou / Navios/...............................5,100,000........53
8. G. Prokopiou / Dynacom.....................4,261,233........27
9. Restis ...............................................4,109,197........54
10. P. Haji-Ioannou.................................4,046,347........36
11. C.Martinos / Thenamaris....................4,039,584........41
12. Angelicoussis / Anangel....................3,951,761........24
13. Excel /Maryville.................................3,936,079........49
14. A & S Polemis..................................3,903,321........28
15. And.Martinos /Minerva.......................3,860,630........35
16. Lykiardopulos / Neda.........................3,352,717........22
17. P. Livanos........................................3,346,199........26
18. Ath.Martinos / EasternMed................3,141,661........27
Greeks playing careful game
---But the Chinese have been wasting no time buying secondhand units.
Chinese buyers have been blazing a trail in the secondhand market, creating the impression that the Greeks, who have traditionally been in the vanguard of this sector, are taking a more cautious approach for the time being.
Changes in the financial landscape and differences of opinion over the future prospects for shipping, particularly dry bulk, are emerging as key factors influencing decisions on whether or not to buy vessels.
Observers say Chinese owners are showing greater confidence as a result of government efforts to stimulate the economy, while Greek owners, boosted by profits made during the boom, can afford to be more cautious.
However, the gap between the two communities is narrower than the perceptions.
Piraeus-based Allied Shipbrokers says Chinese owners have outpaced the Greeks in the sale-and-purchase (S&P) stakes, buying 78 ships in total since the beginning of the year. Greeks, on the other hand, have bought 68 vessels but have spent more money - an estimated $1bn - on younger and larger tonnage.
Finance expert George Elliot of Naftilia Asset Management says there is a structural change taking place in shipping. Asia and in particular China is breeding a new ownership base to complement its trading sector, which has access to local capital to finance the purchase of shipping assets.
Meanwhile, the Greeks, Elliot says, have traditionally been financed by UK, German and Norwegian banks that are putting the stops on any new projects. "The Chinese are showing something to their bankers that proves they have a competitive advantage," added Elliot, explaining that Greek owners "have also become a little lazy".
"They have made so much money over the years that they are not eager to jump into the market," he said.
Greek broker Bobby Mitropoulos of WeberSeas says he would be surprised if Greek owners were anything but cautious at the moment. To illustrate this, he takes the example of a five-year-old panamax, priced at $15m in 2001 but today costing $30m despite the fall in demand and charter-market instability.
Greeks have always been good at getting their timing right and buying at the bottom end of the market during crisis periods, he says, adding that there are owners out there who believe the real opportunities have yet to surface and that the crisis is far from over.
One Akti Miaouli-based bulker owner who wishes to remain anonymous says his compatriots might be cash rich on a private basis but there are very few cash-rich companies and even fewer of them are willing to play with their equity in such a volatile market.
Despite the current euphoria caused by escalating bulker-charter rates, the owner says he expects the market to plunge in September when panamax and capesize newbuildings will hit the water en masse. He anticipates a particularly hard time for the 850 capesizes set to enter the market in the coming years. Bulker owners, he adds, cannot cancel as many newbuildings as they originally thought.
But underneath the reserve and often pessimistic views of the market, there are rumblings that the Greeks are getting ready to pick up the acquisition game but through less traditional means.
A number of private players are said to be in the midst of launching private-equity funds, with names like Theodore Veniamis and Tsakos Shipping being bandied about. Elliot says the financing scene has changed and a few owners are catching the wave. Shipping, he argues, has been infiltrated by mainstream professional and institutional investors who will keep values high and not blink at paying a premium on assets.
Agreeing that the asset game has changed in favour of the bolder, young owner, George Delaportas of Meadway points to the maths of the past few months. Listed shipping companies, he says, have absorbed over $1.5bn in fresh equity through at-the-market (ATM) offerings despite the collapse of public markets.
"It would have taken much longer for such capital to be raised by private entities through the banking system," Delaportas explained.
Greek owners, he maintains, have been good bargain hunters in the last two crises but might just "squeeze themselves out of a deal this time around if they fight over a million or five".
By Yiota Gousas Athens
Published: 23:00 GMT, 11 Jun 2009 | last updated: 11:58 GMT, 12 Jun 2009
---12 June 2009. Economics professor Roubini says country will pay the price for delayed reforms, competitiveness drop
The country is paying the price of having let its competitiveness slip and delaying the implementation of major reforms in fields such as the social security system and the labor market, he told a conference in Athens.
Greece no longer has any room to further delay reforms that will increase productivity and improve its fiscal health, and helping in turn promote convergence with the eurozone, underscored the economics professor.
The professor, who predicted the global crisis in 2006, said the risks to the Greek economy are linked to its exposure to Southeast Europe, which has been hit hard by the credit crisis.
Even though public debt is at very high levels and borrowing costs have risen, Greece will be able to meet its obligations, said Roubini. But this situation will not be able to continue for very long, he stressed.
Turning to international energy markets, Roubini said crude oil prices will likely rise to $100 a barrel again in 2010.
Crude oil for July delivery gained as much as 97 cents to $72.30 a barrel in electronic trading on the New York Mercantile Exchange yesterday.
US Prestige ruling reversed
--- 23:17 12 Jun 2009. A US appeals court has reversed the dismissal of the $1Bn suit against American Bureau of Shipping by Spain, which is seeking compensation for the 2002 sinking of the Prestige.
New York District Court Judge Laura Swain had decided in favour of class society ABS in January 2008, ruling that Spain sought damages under the International Convention on Civil Liability for Oil Pollution Damage and since the US was not a signatory, a US court had no jurisdiction.
The panel also ruled on a cross-appeal by ABS, which sought a reinstatement of counterclaims against Spain for contributory negligence. Ruling for ABS, the appeals panel remanded those claims for further proceedings.
BIMCO 2009 General Meeting in Athens: Shipping in Transition
Shipping in Transition
Shipping does not need to be defensive about its record, and the BIMCO General Meeting was a further chance to emphasise that it is the most efficient transporter of goods, its international credentials and the importance of global standards and regulations. With the Copenhagen Climate Change Conference imminent, it was important that there is a fair and proportionate representation of the industry at this important meeting.
State of the Industry
The lack of precedents made any form of forecasting of the pace of any recovery almost impossible. There was some optimism that recovery might be encouraged by the fact that governments have intervened on an unprecedented scale, along with a certain buoyancy and strength in the emerging economies, such as China, where a focus upon domestic growth, environmental improvement and education would see this vast country becoming closer linked to the world economy. This more positive message about the emerging economies, notably when viewed from Asia would be a counterweight to the pessimism of the west during the meeting. There was a need to look more closely at the developing world, too, observing the increasing spending power of even the rural poor.
At the same time it was impossible to deny the trouble the industry was facing from the sudden decline in demand for ships. Even though the industry is accustomed to recession (spending some 60% of its time in such a condition over the years), the speed of the swing caught the industry ill-prepared. The huge overhang of tonnage still to be delivered, changing trade patterns, demographics, and consumers changing their spending habits, all would appear to aggregate to a lengthy period of famine for the shipping industry. Is this unrelieved bad news? While this particular audience was unlikely to cheer the observation to the rafters, it was pointed out that five years of cheap freight rates might be an excellent stimulus for world trade!
The Market Session
But looked at from an economic standpoint, the future of the industry does not seem secure, as the world comes to terms with the dual shocks of a collapse in credit and oil price volatility, all exacerbated by the banking crisis. Banking recovery will not be speedy, perhaps another three years before there some stability, with more contraction in the interim. And while there has been massive government intervention, this itself tends to defer the adjustment, even though it stops immediate pain. We are dealing with problems that are bigger than governments, and on an unprecedented scale.
Piracy- the lessons learned
The despatch of warships to the Gulf of Aden and Somali basin had been generally effective, having reduced the number of successful attacks. Naval vessels tasked to protect ships carrying World Food Programme cargoes to Somalia were hampered by the age and poor quality of the cargo ships chartered. The task of protecting merchant ships in general is hampered by the shortage of warships and the limited military assets available, notably in the open ocean in the Somali Basin. Pressing needs included an ability to successfully prosecute captured pirates, with human rights issues to consider. Uncertainties included the duration of the mission, with the EU only authorising it initially for a single year. There was a need for the industry to keep lobbying governments to maintain support, and to press for long-term solutions.
Manpower shortages will not go away, was the consensus, with shortages of experienced people likely to remain for the foreseeable future. Experience is a major issue, quality and accident-free operations an expectation, with newer ships being more complex and requiring better trained officers to man them. There was a problem in that shortages had already accelerated the pace of movement through the ranks with officers reaching senior ranks 33% faster than they had done in the past. This clearly brings its own problems.
In the colleges, there was a shortage of good lecturers, and a need to upgrade the pay and conditions to attract better teachers. Afloat, there was a need to improve both recruitment and retention, to persuade people to train rather than poach and to provide more training places aboard ship. There was also a great need to address the fact that real expertise was spread too thinly, that more maritime interests were fishing in the same pool of talent, and a need to make seafaring more tolerable an occupation, with good conditions afloat, and good career prospects.
There seemed little argument about the need to reduce global emissions, the political imperatives demanding that the developed countries pay more to ease the burden on the developing economies. There was still no consensus about whether market-based solutions, rather than taxes were more appropriate, still some hope that efficiencies and benefits might flow from technical improvements.
Meanwhile, the very real prospect of an emission control area up to 200 miles off the North American coast is being developed across the Atlantic, as the US tries hard to improve air quality, which has been shown to have serious health problems. MARPOL Annex VI has been seized upon as an effective weapon, offering major improvements from its implementation. Thus a public policy case, proved by cost benefit analysis has been made for strict emission control. Implications for shipping are considerable.
But with Copenhagen looming, there are still unresolved issues for the industry to determine as it goes into this vital meeting, which will shape the way ahead. Best that it is all driven globally, by the IMO.
Hellenic results outline threats
---Wednesday, 10 June 2009. Annual results for the Hellenic War Risks Association released this week show the scale of the threat to the shipping industry from piracy in particular. 2008's surge in pirate activity off the Somali coast saw over 100 attacks according to IMB figures, half resulting in seizure, but by the middle of this May there have been a further 114 reported hijack attempts, 29 of them successful despite naval forces operating in the area. Five vessels covered by the Hellenic were attacked in 2008. Three were repelled but two were seized in the Indian Ocean more than 250 miles out to sea within days of each other. Armed men forced them to sail to the Somali coast, where both were held for over two months. The Hellenic assisted owners with negotiations which eventually resulted in the safe release of ships, crews and cargoes. This year so far, there have been eight attacks and five seizures of Hellenic-entered vessels. Three have been released.
Responding to developments during 2008, London market underwriters added Gulf of Aden transits to the list of Additional Premium areas and extended the existing Somali AP areas in May. With no prospect of any short-term improvement, the Association started charging members Additional Premiums for ships transiting the Gulf of Aden and parts of the Indian Ocean from 1st January 2009. Hellenic said that economies of scale, have however, produced very competitive rates. In April 2009, this area was further extended to 600 miles from the Somalia coast into the Indian Ocean and as far south as the northern coast of Tanzania.
In August 2008, fighting between the Georgian military, separatists and Russian forces led to Georgia becoming an AP area. In September, oil installations in Nigeria again came under attack. In Sri Lanka, fighting between government forces and the Tamil Tigers escalated and two merchant ships were attacked in October. Tensions in and around the Gaza Strip rose, particularly in December when Israel began a ground offensive. AP rates in all four areas increased during the year, although those for Georgia reduced as the situation appeared to ease. These four areas remain subject to Additional premium.
Overall, the Hellenic made a small loss, amounting to 2 percent of its cash reserves, as a result of the collapse in global stock prices last year. Contributions and premiums were US$24.7m, compared with US$15.8m in 2007. By the end of the year, reserves stood at US$46.3m. The number of ships entered with the Hellenic increased very slightly over the year to 2,283 compared with 2,228 twelve months earlier.
Hellenic shipping industry the most affected by pirates
Euroseas boosts fleet with latest panamax buy
---Nigel Lowry, Athens - Thursday 11 June 2009
ATHENS-based dry bulk and container vessel owner Euroseas has boosted its fleet to 17 with the purchase of its third bulker this year.
Earlier this year it had bought a 1997-built panamax and a 1998-built handymax.
Last year Euroseas refrained from investing in bulkers. Its only purchase was a container vessel backed by a three-year charter.
The newly acquired panamax is expected to be delivered between the start of July and early August. It comes with a time charter back to the seller until January 2010 at $25,200 per day.
Safe Bulkers, Inc. Announces Common Stock Purchase Program by its Controlling Stockholder
Vorini has also advised the Company that based on the instructions it has provided to its broker it does not expect to make purchases at the current time.
About Safe Bulkers, Inc.
For further information please contact Company Contact:
Dr. Loukas Barmparis
Safe Bulkers, Inc.
Telephone: +30 (210) 899-4980
Fax: +30 (210) 895-4159
Elin Marine lubricants to the UAE and to the wider Persian Gulf region
---As of June 1, ELINOIL will be providing the most important ports of the United Arab Emirates and of the wider Persian Gulf region with marine lubricants elin Marine in order to meet the needs of its clients at major shipping points of passage such as Fujairah, Dubai, Muscat, Abu Dhabi, Kuwait and Doha, either with barrels or in bulk. This development is part of the company's strategic plan to expand its international elin Marine lubricants disposal network, as well as to expand ELINOIL partnerships which give the company the opportunity to serve its clients in more ports all over the world, but also to maintain the strong presence of the elin Marine brand in Piraeus and in all Greek ports.
With this new agreement, ELINOIL is present with its own brand at one of the most important hubs of global shipping, increasing the number of ports outside Greece that it supplies with elin Marine lubricants to 84, including Singapore, the most important ports of China, Malaysia and Taiwan. It must be noted that ELINOIL was the first Greek company to supply marine lubricants abroad with its own brand and within a minimum amount of time was able to establish itself as one of the best quality companies in the sector due to its ability to deliver excellent quality products any time, on time.
Source: Press Releases, http://www.elin.gr/page/default.asp?la=2&id=102&ap=488&pl=496&pk=5
Citigroup Analyst Kartsonas Joins Shipping Hedge Fund
---John Kartsonas, a former shipping analyst at Citigroup Inc., joined a new hedge fund trading freight derivatives and shares of shipowners. Sea Advisors Fund LLC, based in the Marshall Islands, will seek to profit from price differences in shipping equities and forward freight agreements, Kartsonas said by phone from New York today. He declined to say how much the fund is managing.
Kartsonas will manage the fund's investment in shipping companies. Pavlos Hitiroglou, a former senior freight derivatives trader at Navios Maritime Holdings Inc., will handle the fund's buying and selling of the contracts, according to the fund's Web site.
Hedge funds are private, largely unregulated pools of capital whose managers can buy or sell any assets, bet on falling as well as rising prices and participate substantially in profits from money invested. [Source: Alaric Nightingale, Bloomberg]
Sea Advisors Fund LLC
Founded in 2009, Sea Advisors seeks to achieve high risk-adjusted returns by investing in the broader maritime sector. The fund focuses on maritime equities and shipping freight derivatives, two areas that have been characterized by high volatility but also by strong returns over past cycles.
Our team's expertise, knowledge and industry experience combined with our unique investment strategy are the cornerstones of our targeted strong risk-adjusted performance. With decades of industry experience from different areas of the shipping market, Sea Advisors' professionals utilize a broad network of shipping contacts and market sources to collect and evaluate information in order to make investment decisions.
Sea Advisors is actively investing in two areas: Shipping Equities and Freight Derivatives.
Our equities desk is headed by John Kartsonas. Prior to joining Sea Advisors, John was the senior shipping analyst at Citigroup Investment Research. Prior to that, John was an equity analyst at Standard & Poor's covering the shipping and oilfield services sectors. Our freight derivatives desk is headed by Pavlos Hitiroglou. Prior to joining Sea Advisors, Pavlos was the senior FFA trader at Navios Holdings where he was responsible for all derivatives trading in the firm.
Our board of directors is responsible for the strategic direction and oversight of our fund and includes Anthony Whitworth, Robert Shaw and Jeremy Downward.
Anthony has more than 30 years of shipping experience in various shipping companies. Most recently he was responsible for the strategic development of the physical and paper trading desks at Navios Corporation where he was the CEO until 2005 when the company was sold. Robert has extensive experience in shipping operations, transactions and related M&A. More recently Robert was the President of Navios before he left in 2006. Prior to Navios, Robert was a senior partner at the New York maritime law firm of Healy & Baillie. Jeremy is the CIO of a significant European based Family Office which he set up in 2001 and which invests in a broad spectrum of asset classes across the globe. In 1989 Jeremy was a founding partner in Alpha Finance, Greece's first investment bank, which created the country's mutual fund industry and was a pioneer in Greece's capital markets and corporate finance. Source: http://sea-advisors.com
Source: http://www.shipid.com/news/63055/Citigroup_Analyst_Kartsonas.html AND http://sea-advisors.com/id50.html