Greek Shipping News Cuts
Week 09 - 2010
---The government plans to merge the activities of ports in the Attica region into one holding company and invest Euro 1.5bn in the broader Piraeus area over the next five years. In an attempt to boost the local Attica region economy and business, the ports of Piraeus, Elefsina, Rafina and Lavrion, are to be lumped together.
The individual ports will act as the reference points, around which all relative works are to be located. Projects are to be funded by public-private partnerships schemes, the country's funds allocated by the European Union, as well as the European Investment Bank (EIB). Further, it is hoped the interest of the region's largest foreign player, China's Cosco, will be stirred.
The plans to expand Attica's road and rail networks, upgrade port services and move forward urban development generally were revealed March 4 during a joint meeting of members of the cabinet, deputy PM, Theodoros Pangalos, Louka Katseli Economy, Competitiveness and Shipping minister and other relevant parties, including Piraeus mayor, Panayiotis Fasoulas.
Piraeus is the primary focus. "Piraeus is not just a port, it is not just the largest port in the country. Under the right conditions it can develop into a centre that is able to attract investment and create jobs," said Katseli.
China's Cosco Pacific, which runs the port's container terminals II and III, has indicated it is interested in investing in the port as it plans to use Piraeus as a European entry for Chinese trade. Indeed, Cosco is said to be keen to link the port with the rest of the country by rail.
Without going into any details, the Piraeus Port Authority (PPA) said the total investment for Piraeus stands at Euro 2bn, with the goal of turning Piraeus into a 'Green Port' for shipping, tourism and culture, through specific works in the area of the protection of the environment. Also, the port will host a series of new infrastructure and actions, through the creation of a 'Cultural Coast', which will provide for a new, innovative link between the port and city of Piraeus.
Growing Piraeus' maritime cluster of services is a key. Through specific legislative measures and tax incentives, Piraeus could become a major focal point for world shipping, attracting a wide range of service businesses.
-- Filed: 2010-03-05
Minister reassures Greek shipping over tax changes
---The Greek minister for shipping has ruled out changes to the current tax status for Greek shipping companies, even though the country is facing a huge debt crisis.
Minister of the Economy, Shipping and Competitiveness Louka Katseli told TradeWinds that changes to the current taxation legal framework is not on the government's proposed bills for much-needed tax reform.
Speculation is rife in Piraeus and the international shipping community over the government's intentions to up tax for Greek shipping companies, which currently enjoy a number of exemptions.
Owners with deep pockets where drawn to Piraeus in the late 1960s, creating what is now known as the "Piraeus Cluster", when a legal framework was introduced that provided special operational status.
Athens is proposing changes to the tax regime for offshore companies that some fear will encompass shipping entities with a tax hike from 3% to 40%.
Katseli says that while details have yet to be ironed out regarding the tax reforms, the offshore changes refer to real-estate entities only.
The denial comes at a time when a number of high-profile commentators have been looking at the implications of Greece's current economic crisis on the shipping community.
The idea that Greek owners could now give a helping hand to their homeland's economy was also underlined this week.
Owner Victor Restis told local media that the government could issue a bond worth up to $5.5bn exclusively funded by Greece's wealthy shipowning and business community. He added that owners in particular would be prepared to come to the country's aid with favourable terms for such a loan.
The idea of the patriotic bond was first reported last November, when finance analyst Ted Petropoulos estimated that owners held $60bn to $70bn in cash earnings from the years of the shipping boom. This money, he added, could be used to help the national economy through issuing a new series of government bonds.
By Yiota Gousas Athens
Published: 00:00 GMT, 05 Mar 10 | updated: 15:46 GMT, 04 Mar 10
Greece Approves Sale of Shipyard to Abu Dhabi MAR Group
---(Staff Report)-2 March 2010
Younger owners and ships dominate sector
---Nigel Lowry - Thursday 4 March 2010
Four of the tankers are on period charters, while the Aspasia Lemos, together with the Sumitomo-built Mitera Marigo, delivered in 2007, are trading in the Sigma Tankers aframax pool.
Mr Patitsas cited a number of reasons for gravitating to tankers. These included the perception that there were higher entry barriers in the tanker industry, as well as better fundamentals, than looked the case for dry bulk.
Risk management is linked to a culture of corporate governance, another trait that separates the most modern Greek tanker companies of today from the old guard.
Some indicators suggest to Mr Patitsas that tanker prices could drop a further 15-20% in the months ahead and he does not rule out 2010 being the year for further expansion of the fleet.
While Mr Patitsas says he wants to stay flexible with regard to other types of shipping, for the time being the main focus is on building Atlas as a tanker company.
Greek finance path widens
---Traditional investors are exiting Greek shipping, replaced by growing involvement from Asia and the Middle East
The shifting axis of global financial power is becoming evident in investment in Greek shipping.
Some banks are looking to shrink their involvement in Greek shipping, said Athens-based ship finance analyst Ted Petropoulos, but Asia stands at the ready.
Maitland cited Navios Holdings CEO Angeliki Frangou as one Greek owner who, by combining a sound, modern understanding of finance with good, traditional operational skills, succeeded in keeping her NYSE-listed company afloat and managed to secure finance, even during the tough financial environment of the past 18 months.
Source: Fairplay - Trade 04 Mar 2010
Maran Tankers Management Inc. selects Seagull - 05.03.2010
---Maran Tankers Management Inc. has selected the new Seagull Training System for use across their entire fleet and offices worldwide.
Maran Tankers Management Inc., the oil tanker unit of the Angelicoussis Shipping Group Limited, operates a modern fleet of 35 oil tankers and has several new ships under construction.
Sister company Maran Gas Maritime Inc. has also been using the Seagull Training System on all of its vessels and in offices since January 2008.
Maran Tankers Management Inc., which operates under a management system certified in accordance with ISO 14001:2004 and OHSAS 18001:2007, attaches great importance to the continuous training of its personnel allocating significant recourses in using modern, technologically advanced and effective training tools and equipment. Maran Tankers Management said that it firmly believed that the adoption of the CBT system and in particular of the Seagull Training System would further enhance the quality of the onboard training provided, contributing in that way to its standing objective for continually upgrading the competence of the seagoing personnel.
Maran Tankers Management Inc. has stated that the adoption of the training package was another evidence of their standing commitment to providing best-in-class services and conducting its operations maintaining the highest applicable health, safety and environmental standards.
Greek shipper CEO says immune from local woes
---ATHENS (MarketWatch) -- The chairman and chief executive of Paragon Shipping, Michael Bodouroglou, spends his days working about a dozen miles from the center of the Greek capital.
But he says his company's fate is barely intertwined with the debt crisis preoccupying the politicians of Athens.
"There has been no impact on shipping generally," he said. "What we do here is an international business. We do not relate financially at all with what's going on in Greece."
Like tourism, shipping has traditionally been a leading industry in Greece. The outlook for shipping, however, doesn't depend on the Greek economy, but on the economies of China, India and other countries hungry for commodities. Paragon's fleet of eleven dry bulk carriers transports coal, iron ore and other commodities to far-flung destinations where they are used for infrastructure projects.
Greek Debt Crisis: Shipping Industry
Polya Lesova interviews Michael Bodouroglou, chief executive officer of Paragon Shipping, on the effect that the Greek debt crisis has had on the shipping industry.
When the global financial crisis hit, Paragon had secured employment for its fleet though long-term contracts for a substantial period of time. The firm mainly employs vessels under fixed-rate charters for periods ranging from one to five years.
Bodouroglou is bullish on the Greek shipping sector and on demand for commodities because of expectations of strong global growth this year. He says his company boasts good earnings visibility, a modern fleet and low operating expenses. Besides, Paragon, unlike Greece, has cash to spend.
"Our major challenge today is where and when to invest our current liquidity. We have $150 million of cash that we would like to invest," he said, explaining that the firm may diversify into other ship sectors, such as containers or tankers. "We now have the resources to eventually double the size of our fleet."
It's not all smooth sailing, however, for Paragon or the industry.
Paragon, like many in the shipping industry, reported a decline in fourth-quarter time charter equivalent, a key industry measure. In Paragon's case, it fell to $32.3 million from $39.1 million, though analysts cheered the firm's ability to hold its dividend at 5 cents a share.
Shares of Paragon /quotes/comstock/15*!prgn/quotes/nls/prgn (PRGN 4.92, -0.02, -0.40%) , which is registered in the Marshall Islands, have gained about 48% over the past 12 months on the Nasdaq, though momentum has stalled of late as it's dropped 8% over three months.
Among its competitors, shares of Navios Maritime Holdings Inc. /quotes/comstock/13*!nm/quotes/nls/nm (NM 6.53, +0.05, +0.77%) have surged 244% over 12 months but climbed just 4% in the last three months. DryShips Inc. /quotes/comstock/15*!drys/quotes/nls/drys (DRYS 6.17, -0.01, -0.16%) has climbed nearly 80% over 12 months but fallen roughly 15% in the last three months.
China is key for shipping
Global shipping boomed from 2003 until 2008, driven by demand from China. In the second half of 2008, however, world trade declined dramatically, causing sharp drops in freight rates and vessel values.
"Never before have the volatility and the fluctuations in the shipping industry been as significant as they have been in 2008," PricewaterhouseCoopers said in a recent report.
In the dry bulk subsector, a capesize vessel could be fixed for $304,000 a day in June 2008 and for only $2,000 a day by November that year, according to the report. Besides the sharp decline in hire rates, shipping firms also confront a shortage of trade finance and potential breaches of loan covenants, the report said.
At a recent shipping forum in Athens, Casper Burgering, an economist at ABN Amro, projected growth in dry bulk commodities this year, with the fastest growth seen in iron ore trade. China, of course, is the dominant consumer when it comes to iron ore and numerous other commodities.
"Developments in China will shape dry bulk markets," Burgering said. Speculation in the real estate sector and the stock market is a major risk facing China, according to Burgering.
"We think the Chinese economy is solid enough to resist these economic shocks," he said. "The outlook for the dry bulk market is positive for the next two years."
While Paragon isn't directly affected by the Greek debt crisis, its chief executive certainly has to live with the realities of it. A nationwide strike called by the country's biggest unions to protest the government's austerity measures threatened to close down the airport in Athens, potentially conflicting with his travel plans.
For Bodouroglou, it is important to differentiate between the private and the public sectors in Greece.
"The problem with the Greek economy lies with the public sector. The private sector does not have a problem with its efficiency and its profitability," he said. "What the government intends to do and says it will do are steps in the right direction. Whether they are able to implement them 100% remains to be seen, but I'm optimistic."
Under intense pressure from the European Union and the markets, the Greek government has pledged to reduce its budget deficit by 4 percentage points to 8.7% of GDP this year. It plans to do that by reducing the size of the unusually large public sector and reforming the tax system. In the meantime, Greek stocks and bonds have sold off, the country's credit rating has been downgraded several times, and Greece is facing higher and higher borrowing costs in the bond markets.
"There is no doubt that the reputation of the country is being tarnished," Bodouroglou said. "However, big international corporations have known of the inefficiencies that exist in Greece for a long time and that's why we haven't had any major direct foreign investment in Greece for years."
Bodouroglou believes that Greek shipping has been successful mainly because the government doesn't interfere with the industry.
"We have never had any handouts from the government, we've never asked for any help from the government and we never will," he said. "All we want them to do is to leave us alone so we can go on about our business."
Polya Lesova is reporter for MarketWatch, based in Frankfurt.
Source: TD AMERITRADE http://research.tdameritrade.com/public/common/news/printable.asp?d...
Latest Proposed US Iranian Sanction Legislation: What Does It Really Mean?
---George Chalos writes:- (The Maritime Advocate online--Issue 426)
Proposed legislation is currently pending in Congress which, if signed into law, will amend and expand the Iran Sanctions Act of 1996, and impose sanctions on domestic and foreign individuals and companies aiding Iran in developing petroleum resources and products. The Comprehensive Iran Sanctions, Accountability and Divestment Act (S.2799) was passed by the Senate on January 28, 2010 and will now be referred to a committee in the House of Representatives before the full House will vote on the Bill. The Iran Refined Petroleum Sanctions Act (H.R. 2194), a companion bill that was passed in the House of Representatives in December 2009, has now been referred to the Senate Committee on Banking, Housing and Urban Affairs. The House and the Senate must now vote on the proposed bills previously passed in the other chamber of the U.S. Congress. Thereafter, the similar (but not identical) bills must be reconciled and passed by both in identical form before the uniform bill is presented to President Obama to be signed into law. Similar bills, which were introduced in previous sessions of Congress, have never made it beyond the committee stage.
If ultimately signed into law, the House bill provides for the sanctions to apply retroactively to any person engaged in the prohibited activity on or after October 28, 2009. The Senate bill would apply prospectively only. The legislation will remain in effect through 2016.
Source: The Maritime Advocate online--Issue 426