Greek Shipping News Cuts
Week 51 - 2010
---In 2010, Greek shipowners went about their business very much as usual, using experience, intuition and plain common sense to make decisions as diverse as they always are in a nation of individualists.
Their take on where the markets are heading and what is in store for 2011 is equally diverse and personal, with some loath to make any prediction at all while others are honest enough to say they would never reveal to a newspaper what they really think is in store.
For Greece, 2010 saw renewed ordering, especially in the first six months. By the end of October, Piraeus-based broker Golden Destiny SA estimated that 231 ships totalling close to 26 million dwt had been booked by domestic owners. This included 142 bulkers and 65 tankers, both sectors amounting to something over 12 million dwt.
But brokers admit that even they cannot fully pin down contract cancellations and renegotiations, meaning that even the most reliable databases likely carry incorrect listings.
By the end of November, Piraeus-based Allied Shipbroking calculates that Greeks had bought 50 secondhand boxships out of the total 152 that changed hands during the year.
Technomar Shipping, already an established boxship operator, racked up something like 15 purchases. Other owners new to the sector also took the plunge. New York-listed Diana Shipping, for example, invested $50m in Diana Containerships Inc.
Outsiders entering the box arena included Theodore Angelopoulos-controlled Metrostar, which made its debut with a five-ship purchase from German owner Claus-Peter Offen and followed that up with an order for four firm 3,500-teu vessels at SPP Plant & Shipbuilding. The deal is said to include four optional units.
George Economou, DryShips chief executive and head of a number of other privately held companies, is one of the few Greeks to have veered off the normal path and headed for the ultra-deepwater (UDW) offshore sector.
DryShips subsidiary Ocean Rig has two UDW semi-submersible drilling rigs and four UDW drillship newbuildings. In November, it announced that it had secured options to build up to four more UDW drillships.
With that in mind it is hardly surprising to hear Economou the most exciting sector going forward will be UDW.
Economou, rates the box market as the second most attractive option and then come tankers.
As of November, DryShips owned a fleet of close to 40 bulkers but Economou believes that with a smaller orderbook and the possibility that more older ships could leave the market, tankers could prove more interesting.
The company currently has a pair of 82,000-dwt newbuildings on order at Cosco Dalian Shipyard for delivery in 2012 and a quartet of 87,000-dwt vessels at Hudong-Zhonghua Shipbuilding for delivery next year.
If the rapid development of these countries continues and they are not negatively affected by the crisis in Europe, Economou believes the apparent vessel oversupply will be absorbed.
One of the owners least keen to offer a forecast is George Procopiou, who through his companies Dynacom, Sea Traders and Dynagas has a presence in the wet, dry and gas markets.
While he has no objection to sharing his opinions in private or with colleagues, he jokes that he avoids making predictions because he is always wrong.
Procopiou notes that today there are many new destinations, with fresh demand from altogether new locations.
In order to take advantage of this, owners need to be competitive, prudent in the way they run their ships and offer a good service.
Whether the investments are newbuildings, resale contracts or secondhand purchases, owners need finance and Greek financial analyst Ted Petropoulos says that in 2010, there appears to have been a mild return to growth by the top 40 global shipping banks, which by November had increased their combined portfolio by 3.14% to around $450bn.
But Petropoulos expects banks to remain largely cautious in 2011 on account of the considerable prevailing financial and economic turmoil, as well as their own capital adequacy and liquidity constraints.
Neither does Petropoulos see a wide shift to private equity because of its high cost. And he also believes conditions for companies to head to the public markets are not currently conducive.
By Gillian Whittaker Athens
Published: 23:01 GMT, 22 Dec 10 | updated: 10:57 GMT, 21 Dec 10
DryShips unveils tanker ambitions with 12-ship order
--- * Thursday 23 December 2010, 22:35 * by Nigel Lowry
Orders a dozen suezmaxes and aframaxes at Samsung Heavy Industries
GREECE-based DryShips has jumped into the tanker sector with a series of 12 suezmax and aframax newbuildings ordered at Samsung Heavy Industries.
The initial investment in six suezmaxes and aframaxes will come to about $771m.
Contract prices are just over $69.7m for each of the 157,700 dwt suezmaxes and about $58.7m for each of the 115,700 dwt aframaxes.
Executives at DryShips have made no secret recently of an interest in tankers and the move is unlikely to come as a surprise to major institutional investors in the company.
The George Economou-led company currently has well over $300m of cash in hand to help fund the tanker newbuildings, and will probably seek about 60% bank finance for the ships.
Mr Economou was said to be travelling and could not be reached for comment on Thursday. Meanwhile, other company executives declined to comment on the development ahead of an official announcement.
It is understood that a substantial tanker play has been plotted for some time, but earlier this year would have been too much of a stretch.
DryShips has been relatively open in calls with investors about its ambition to further diversify and is believed to be more optimistic about the performance of the tanker market over the next two years than it is about the dry bulk side.
His Cardiff Marine management company manages the DryShips fleet of nearly 40 bulkers.
The new suezmax and aframax fleet is almost certainly destined to trade in the Heidmar tanker pools, managed by US-based Heidmar Marine, which is co-controlled by Mr Economou and Morgan Stanley.
This would enable the company to surf any tanker market gains stemming from an improving spot market.
The first deliveries are due to take place in the early weeks of 2011, suggesting that some of the units are resales that have been left by another shipowner.
However, the majority are said to be fresh shipbuilding orders placed direct with Samsung.
Overall, five of the tankers are scheduled for delivery within next year, four in 2012 and the final three in 2013.
Formation of a partially independent tanker entity will push DryShips further along the road to becoming a holding company with legs in the offshore and tanker markets.
DryShips has been enjoying a busy end to 2010, most recently by raising $500m from a private placement of about 22% of stock in its Ocean Rig subsidiary.
This was immediately followed by announcement of a share purchase programme of up to $25m in the subsidiary, a move which appears to be primarily a signal to investors that the owner has confidence in the stock.
Ocean Rig shares have begun trading on the over-the-counter market maintained by the Norwegian Association of Stockbroking Companies.
Navios Maritime Holdings Inc. Announces Buyback of $131.3 Million Mandatorily Convertible Preferred Stock
---PIRAEUS, Greece, Dec. 22, 2010 /PRNewswire via COMTEX/ --
Navios Maritime Holdings Inc. ("Navios Holdings") (NYSE: NM) a global, vertically integrated seaborne shipping and logistics company, announced today that it has agreed to purchase $131.3 million of certain series of the 2% Mandatorily Convertible Preferred Stock ("Preferred Stock") previously issued in connection with the acquisition of Capesize vessels.
Navios Holdings will pay $49.2 million in cash for $131.3 million of Preferred Stock, reflecting a 62.5% discount to the face amount. No dividend payment will be made on such stock for the fourth quarter of 2010, and it is anticipated that the purchase will be completed in 2010.
The holder of the Preferred Stock was entitled to receive an annual dividend of $2.6 million, payable quarterly, until such stock was converted into common stock. Upon maturity of such stock, in general, the holder would have received up to 13,132,000 shares of common stock.
Angeliki Frangou, Chairman and CEO of Navios Holdings stated, "We are pleased with this transaction, as it shows our continued ability to transact with our commercial partners in a manner accretive to our stakeholders. We were able to provide the seller needed liquidity by purchasing our equity at an effective price of $3.75 per share, which is about 27% below the current market price."
Ms. Frangou continued, "Through this transaction, we have reduced the number of shares outstanding as well as the $2.6 million annual dividend obligation on the Preferred Stock. We continue to have ample liquidity to progress our business plans."
Update on Number of Shares of Fully Diluted Common Stock Outstanding
After the repurchase of the Preferred Stock and also giving effect to the previously announced repurchase of certain convertible promissory notes, the total number of shares of outstanding common stock, on a fully diluted basis, has been reduced by 12.6% or 16.2 million shares.
About Navios Maritime Holdings Inc.
Navios Maritime Holdings Inc. is a global, vertically integrated seaborne shipping and logistics company focused on the transport and transshipment of drybulk commodities including iron ore, coal and grain.
Navios Holdings may, from time to time, be required to offer certain owned Capesize and Panamax vessels to Navios Maritime Partners L.P. for purchase at fair market value according to the terms of the Omnibus Agreement.
For more information about Navios Holdings please visit its website: www.navios.com.
Source: Press Release
Refinery shipment for Delta Maritime
---December 21 - Delta Maritime, a Greek-based member of the Cargo Equipment Experts (CEE) and Worldwide Project Consortium (WWPC) networks, has handled the shipment of a module through Thessaloniki port destined for the Hellenic Petroleum's refinery on the outskirts of the city.
The module was 26.5 m long and 3.26 in diameter and weighed 155 tonnes.
Delta Maritime says that it had to give careful consideration to the overland transport of the module as the refinery is almost within the city limits.
Owners mull finance options
---A range of finance options are on the table for shipping in 2011
Shipowners will look for alternative sources of finance in the New Year, as banks remain cautious about lending money. The bond market, private shipowners and private equity funds are possible sources of funds as banks stick with key clients.
Rank Name Total exposure Market share
1 Royal Bank of Scotland $13.3Bn 19.85%
2 HSH Nordbank $5.2Bn 7.76%
3 Deutsche Schiffsbank $4.9Bn 7.41%
4 Credit Suisse $4.0Bn 5.97%
5 National Bank of Greece $3.2Bn 4.80%
6 Alpha Bank $2.7Bn 3.99%
7 Emporiki Bank of Greece $2.6Bn 3.91%
8 DNB NOR $2.5Bn 3.80%
9 Marfin Egnatia $2.4Bn 3.66%
10 Calyon (estimated) $2.0Bn 2.98%
Total $43Bn 64.13%
*Ranked by portfolio size as at 31 December 2009
[ Source: Petrofin Bank Research ]
Source: Fairplay - Trade 23 Dec 2010