Greek Shipping News Cuts
Week 05 - 2011


Greeks will stand or fall by the wisdom of investment

--- * Wednesday 02 February 2011, 10:34 * by Nigel Lowry
It is idle to think that every order placed in the face of a tsunami of newbuilding deliveries must be the work of a madman. Especially if he is Greek
This was a typical debate in the 1980s and 1990s when earnings eked from the bulk markets were frequently meagre.
This, it was argued by some, was to reduce the noble service of shipping to a casino. Somehow linked to a reluctance to contract newbuildings and keep them, Greeks at that time were also seen as second-tier on safety and quality, on top of being gamblers.
That caricature conveniently ignored the fact that older Greek shipping companies during the 1950s, 1960s and 1970s had been among the major contractors of new ships to surf the post-war boom in seaborne transport.
It also marginalised the attention given within the sprawling Greek community to the still-substantial number of shipowners who intended to trade their ships, for a lifetime if possible.
Now approbation is the order of the day once again. There is genuine anguish at the spectre of overcapacity, with 192m dwt of capacity in all sectors scheduled to be rolling off the production line this year alone.
Most cause for concern is the dry bulk industry, where 2011 deliveries and overspill from last year are calculated to come to about 140m dwt, or a 23% increase on the existing fleet, according to statistics kept by N. Cotzias Shipping Consultants in Greece.
With barely an exception, that does not describe the Greek shipping community, but some commentators have specifically taken umbrage to the new wave of orders placed last year, in full consciousness of the impending avalanche of new tonnage, when further additions to capacity can only perpetuate a strained period for the market.
Here, Greeks are among those implicitly in the firing line, having led the surge in fresh contracting, especially in the first half of 2010.
In 2007 Greek owners contracted a record 558 ships of about 43m dwt, 371 of them dry bulk vessels.
After the market crash of late 2008, everyone stayed away from the shipyards, but cash-rich Greek owners were among the first to make a firm return, wooed mainly by drastic price cuts for newbuildings.
In late 2009 this took the form of a first sprinkling of tanker orders, but last year Greek owners were in the forefront of a fresh spate of orders, again tilted towards dry bulk.
During 2010, they ordered an estimated 250 ships of about 27m dwt. Close to 150 of these were bulk carriers, about half of which were kamsarmaxes.
Some commentators have been at a loss to understand owners who continue to order in the face of a widely predicted surplus of capacity in their markets.
Although many aspects of shipowning and operating in Greece have changed over the last two or three decades, the perception that the profitability of shipping depends heavily on the timing of entering and exiting the market has remained a staple.
With future earnings and potential sale price belonging in the realm of the unknowable, the only point of the investment cycle fully within the control of the owner is the initial decision to invest, hence the enthusiasm for what are perceived to be lower prices.
But there are many general and individual portfolio reasons for interest in newbuildings.
Starting from scratch with a reputable builder gives an owner much more control over quality and specifications of the ship.
With a new contract there should be an opportunity to spread the payment of own cash contributed to the purchase and in trading conditions such as the present, there will always be hope that the contractor will have the benefit of a ship delivered two or three years hence in a brighter market, rather than the mixed blessing of a prompt delivery.
A relatively small percentage of vessels are real candidates for sale at any one time in the secondhand market, with the market for highly specialised ships naturally being the narrowest of all.
Container vessels are more likely than other types to be under long term charter. Long term employment discourages sale and purchase activity.
Most commonly it increases reluctance to sell, although in certain markets moderately remunerative time charters can discourage buyers.
Total dwt, by ship type Total dwt, by year of delivery
Bulker 255,010,411 2010 18,999,656
Tanker 113,203,152 2011 192,314,918
Container 42,173,385 2012 144,034,876
Gas 3,750,531 2013 51,982,954
Car 1,973,695 2014 8,821,578
Ro-ro 620,490 2015 476,500
Reefer 37,450 2016 98,000
TOTAL 416,769,114 TOTAL 416,769,114
Source: N. Cotzias Shipping Consultants
Specific secondhand opportunities are often the subject of competition and what appear to be the better bargains often attract a bidding war that significantly increases the final price. Brokers anecdotally suggest exactly this happened quite a lot last year, particularly as owners moved to snap up boxship opportunities.
In many cases, Greek owners who inked newbuilding contracts last year had not ordered since 2005 or earlier and hence took the opportunity to start a fleet renewal process.
In extreme cases, a few companies had been more or less out of the market altogether and kept on staff while awaiting an opportunity to reinvest.
Greek owners, the same as others, will stand or fall by the wisdom of their investment decisions over the last few years.
As things stand, according to Cotzias, the current orderbook of vessels to be built for Greek owners is about 625 ships of 55m dwt, not including a few small and very specialised vessels. These include 380 bulk carriers.

Pateras makes a relaxed return
---A Greek player has made a shipowning comeback but is in no rush for glory.
Pacific & Atlantic (P&A), under the guidance of owner Nikos Pateras, has returned to shipowning after a four-year absence with the purchase of a pair of handysize bulkers and a multipurpose (MPP) cargoship.
In December, P&A was identified as the buyer of the 21,200-dwt Bulk Valiant (ex-Salvadora) and Bulk Victory (ex-Severina, both built 2007) that were reported sold at $15m each.
The company also acquired the 8,500-dwt Nunukas (ex-Lehmann Forester, built 2008) at auction in Hamburg for EUR 3m ($4m).
The investment involved in the purchases seems small for a company that at its peak controlled around 50 ships but Pateras admits that after several years out of the game he wants to test the water.
All three vessels will be ready to trade by the end of this month and, depending on rates, Pateras says they may be fixed on period charters or work spot.
The company has seen period rates of between $9,000 per day and $10,000 per day for the two handysizes but has yet to market the Nunukas and Pateras suggests he may resell the vessel.
The company could expand its fleet rapidly or slowly depending on opportunities and the way the market develops but, irrespective of this, Pateras says he considers P&A to be lucky.
The owner believes there will be a considerable further correction in asset values, one of the reasons that led him to favour smaller vessels as a jumping-off point.
A chartering operation launched a year ago did not take off. Pateras says shipowners had been seeking high rates and the company chose not to fix any vessels.
With all the provisos now in place, the owner says P&A can look at any type of dry tonnage from handysizes to capesizes.
By Gillian Whittaker Athens
Published: 23:01 GMT, 03 Feb 11 | updated: 21:58 GMT, 02 Feb 11

Star Bulk Announces Spyros Capralos to Succeed Akis Tsirigakis as CEO and President
---ATHENS, GREECE, February 2, 2011- Star Bulk Carriers Corp. (the "Company" or "Star Bulk") (NASDAQ: SBLK), today announced that Mr. Spyros Capralos has been appointed as President and Chief Executive Officer, to succeed Mr. Akis Tsirigakis, effective as of February 7, 2011. Mr. Capralos has also been appointed to the Board of Directors which is now comprised of 8 members. Mr. Tsirigakis will continue to serve as a director. Mr. Tsirigakis' parting was mutually agreed, so he may pursue other interests.
Mr Capralos served, until October 2010, as Chairman of the Athens Exchange and Chief Executive Officer of the Hellenic Exchanges Group and was the President of the Federation of European Securities Exchanges. He was formerly Vice Chairman of the National Bank of Greece ,Vice Chairman of Bulgarian Post Bank, Managing Director of the Bank of Athens and has a ten year banking experience with Bankers Trust Company (now Deutsche Bank) in Paris, New York, Athens, Milan, London. He is the current President of the Hellenic Olympic Committee and served as Secretary General of the Athens 2004 Olympics Games and Executive Director and Deputy Chief Operating Officer of the Organizing Committee for the Athens 2004 Olympic Games.
Mr. Petros Pappas, Chairman of Star Bulk, commented: "We are pleased to welcome Mr. Spyros Capralos at the helm of our company. We believe that his business background, capital markets skills and experience will be valuable assets in the continued development of our company. We thank Mr. Akis Tsirigakis for his valuable contribution in steering the company from inception to its present position and we are pleased that he will continue to contribute to the Company's success as a Board member."
Mr. Akis Tsirigakis, the outgoing President and CEO of Star Bulk commented: "I am proud of our achievements in transforming Star Bulk from a blank check company into an established publicly traded dry bulk company. The time has come for me to move on in pursuit of other business interests. I look forward to new challenges and opportunities and I know that I am leaving the company in capable hands."
Mr. Spyros Capralos, President and CEO elect of Star Bulk, commented: "Star Bulk is a reputable shipping company in the global dry bulk industry with a modern fleet and a strong balance sheet. I look forward to continue with the company's prudent growth strategy grasping arising opportunities whilst the market evolves and taking the proper steps to maximize shareholders value."

Overreach hits Georgiopoulos empire
---Greek magnate seems to have been wrongfooted by the cycle
But the biggest worry among investors is tanker major GenMar. Like Genco and Baltic Trading, GenMar also reached a nadir last week, with shares falling two-thirds since April 2010. The bearish argument is that GenMar faces huge debt obligations just as tanker rates are squeezed by overcapacity. The company has made several moves to assuage near-term pressure. In late December, it amended the net debt-to-EBITDA ratio on its loan covenants up to 3Q11. Because the amendments were backdated to 4Q10, GenMar averted a potentially embarrassing breach.
GenMar did not respond to Fairplay requests for comment but, according to its latest SEC filing, all but two of its timecharters expire before 2012.
The consensus view is that GenMar has little choice but to sell more assets and issue more equity. Both GenMar and Baltic Trading have pushed back follow-on offerings tied to the Metrostar deal, opting to wait for better market conditions. However, tanker and dry bulk markets have progressively weakened, raising the possibility that both firms may be forced to issue shares under even worse conditions in 2011.
A trio of new lows
# Baltic Trading hit a 52-week low of $9.01/share on 25 January, compared with its 52-week high of $14.50/share and its March 2010 IPO price of $14/share
# Genco Shipping hit a 52-week low of $11.81/share on 25 January, down 52% compared with its 52-week high of $24.52/share on 29 April 2010.
# General Maritime hit a 52-week low of $2.92/share on 21 January, down 67% compared with its 52-week high of $8.82/share on 26 April 2010
Source: Fairplay - Trade 03 Feb 2011

Aegean Marine Petroleum Network Inc.: Preliminary Results for Fourth Quarter 2010
---PIRAEUS, Greece, Feb. 3, 2011 /PRNewswire via COMTEX/ --
Aegean Marine Petroleum Network Inc. (NYSE: ANW) today announced that it expects to report a net loss between $12.0 million and $13.0 million, or between $0.26 and $0.28 basic and diluted loss per share, for the fourth quarter of 2010. On an adjusted basis, which excludes $1.8 million in unrealized foreign exchange losses, the Company expects to report a net loss between $10.2 million and $11.2 million, or between $0.22 and $0.24 basic and diluted loss per share, for the fourth quarter of 2010. For the three months ended December 31, 2010, the volume of marine fuel sold is expected to total approximately 2.9 million metric tons and the gross spread of marine fuel sold is expected to range between $15.5 and $16.0 per metric ton.
Nikolas Tavlarios, President, commented, "Results for the fourth quarter of 2010 reflect continued competition in our largest markets and ongoing softness in the maritime industry, which has led to a gross spread below our expectations. Our preliminary results also reflect higher operating expenses related to our bunkering delivery fleet. While we improved gross spread and returned to profitability during the months of December and January, management continues to take proactive measures to increase sales volumes at higher margins and drive future performance. Specifically, we plan to launch operations in Cape Verde, strategically located off the coast of Western Africa along major trade routes, in the first quarter. We also intend to enter two new additional startup markets with attractive growth potential by the end of the second quarter and third quarter of 2011, respectively, to further strengthen Aegean Marine's geographical sales mix. Additionally, we expect to commence operations in the first of the three new onshore storage facilities during the second half of 2011 in Tanger Med, Morocco, capitalizing on the increasing demand for onshore storage, enhancing our purchasing power for marine fuel and generating leasing income from third parties."
Mr. Tavlarios added, "Complementing these efforts, we remain focused on improving our cost structure and increasing fleet utilization. Consistent with these important objectives, we intend to monetize two or three of our older non-core bunkering vessels and divest at least two of our five floating storage facilities by the end of the year. We also expect to redeploy additional bunkering tankers from their existing locations to other markets within our global network to optimize our performance. While market conditions across the global marine fuel supply industry remain challenging, we believe both the positive long-term industry fundamentals and Aegean Marine's growth prospects remain intact. With significant access to capital and a vertically integrated energy logistics chain, both core differentiators, Aegean Marine is well positioned to emerge from the current downturn as a stronger Company."
Spyros Gianniotis, Chief Financial Officer, stated, "Aegean Marine's strong capital structure, with more than $700 million in working capital credit facilities, enables our Company to manage fluctuating marine fuel prices and procure large quantities of supply at a discount relative to our competitors. We continue to work closely with our banking group with the goal of expanding our lending facilities under favorable terms."
Mr. Gianniotis continued, "In addition, we expect to increase the Company's voyage revenues in the current first quarter. By chartering-out five double-hull bunkering tankers on short-term contracts with high credit quality counterparties, we will add to our revenues line while we ensure a level of stability in our expenses."

New Harbour Corps aims to change role and end collusion
---The job of protecting Greece's borders has been given to the Citizens Protection ministry and taken away from the Greek navy. Addressing the country's parliamentary committee of Public Administration, Justice and Public Order, Citizens Protection minister, Christos Papoutsis, said the Hellenic Harbour Corps would become a military and police entity.
Papoutsis also said the change aimed at stopping collusion between the shipping community and the industry's administration: "We can not go on as in the past when the HHC's main job was to assist the shipowners who were 'close' to the political leaders at the ministry which ran their ships," said Papoutsis, a former Marine minister.
Confirming the HHC would no longer be part of the Maritime Affairs, Islands and Fisheries ministry, Papoutsis said the decision had been taken by Prime minister, George Papandreou "to seperate the state bodies that draw-up policy and table laws from those that supervise policy".
On the heels of Papoutsis address, Thodoros Veniamis, president of the Union of Greek Shipowners (UGS), vehemently objected to the new law. Appearing before the parliamentary committee he said the new law "abolishes the Marine ministry's administration". He said the law "is on the wrong basis" and that "the HHC should remain under the control of the shipping ministry".
Veniamis warned the government that "if the law is implemented it will hurt the Greek shipping" and reiterated shipping wants "a strong ministry to assist the implementation of shipping policy, given the fact our country is the biggest shipping power in the world".
He was particularly critical on the issue of staffing the ministry and the HHC-HCG saying "transferring personnel such as girls from Olympic [Airlines] and ex-workers of OSE [public railroads] will not be of use to anyone".
Papoutsis had confirmed the HHC would now operate under the dual name, Hellenic Harbour Corps - Hellenic Coast Guard (HHC-HCG) with the latter to be used in the international fora, and the full title domestically.
The minister contended Greece "is the only state in the world where the same authority that issues certificates is also the one which inspects and monitors them". "Many times we [Greece] have been accused by the international community over this anomaly while the seaworthiness of our ships has been disputed, with far-reaching repercussions to our tourism". He said criticism has also come from classification bodies, "another sector from which we have been criticised". He said that "with the new law this ends".
He said: "The Maritime Affairs, Islands and Fisheries ministry will be responsible for drawing-up policy, will take part in the international fora, and issue certificates. The HHC-HCG will be the controlling and inspecting authority."
The Citizens Protection minister also said that in times of crisis the HHC-HCG will cooperate directly with the Greek Navy and Nato. He insisted the legal and judicial processes would work faster as they would move through Naval Courts.
Papoutsis invited members of parliament to visit Piraeus and meet representatives from Frontex, the European Union's monitoring agency, which has established an office in Greece as it seeks to boost the country's struggle to curb the growing influx of illegal immigrants from Turkey and the threat of more from North Africa as political strife grips, Egypt, Tunisia and Algeria.
-- Filed: 2011-02-02

Eurobulk Ltd Managed Container Carrier Tiger Bridge Repairs Completed On Schedule
The owners stemmed the drydocking repairs to Colombo Dockyard looking at the strategic location of the yard, giving minimal diversion from vessels trading route and our competitive pricing. The vessel was calling Colombo, to discharge her last cargo, the yard located inside the port of Colombo, there was minimal diversion, as the vessel was accommodate at yard berth soon after she completed her discharging.
The repair scope consisted of routine drydocking related repairs, extensive repairs on hatch covers, shell guide repairs, overhauling of governors. The yards production teams worked tirelessly to meet the stringent deadlines and re-deliver the vessel on schedule to the owners.
Chris Marine SA exclusive representative of Colombo Dockyard in Greece handled the inquiry and owners aspects smoothly.

Greek Fourlis to build 100M leva retail centre in Sofia
---Thu, Feb 03 2011 09:35 CET
Representatives of Greek company Fourlis, the franchisee of the Swedish chain IKEA for Greece, Cyprus and Bulgaria, have met with Bulgaria's Prime Minister Boiko Borissov to discuss the launch of a new shopping centre in the Bulgarian capital.
The construction of the mall, dubbed South Ring Mall Sofia, will start in June 2011, with investments in the facility seen at 100 million leva, Regional Development Minister Rossen Plevneliev said on February 2 2011 after an inspection of the capital's Ring Road stretch connecting the Simeonovo and Mladost 4 residential districts.
The retail centre, expected to be the largest mall in Bulgaria, will be developed on an area spanning 180 000 square metres.
Originally, the site and the project were under the control of Greek container shipping group Danaos Development, but later they were transferred to the South Ring Mall Sofia company, which is in turn owned by a Cyprus-registered firm.