Greek Shipping News Cuts
Week 31 - 2011


Squeeze will lead to consolidation of a younger Greek fleet

---The squeeze being exerted by the weak shipping market across all sectors and the imbalance created between vessel demand and supply by the enormous order book has set the stage for a substantial consolidation process within the Greek fleet. This process will be driven by a harsh environment which will see declining asset values and weak cashflows adding to market and banking pressure.
"In order to maintain their fleets, let alone grow, Greek owners will need to invest increasing amounts of capital," says Ted Petropoulos in Petrofin Research's latest look at Greek shipping companies. "The 'squeeze' is expected to result in a significant increase in scrapping of overage Greek-owned vessels, as well as some distress sales. The main beneficiaries of the 'cashflow' and 'asset cover squeezes' will be the large, financially strong companies, whether public or private," says Petropoulos.
At the sametime, "though some Grerk newbuilding cancellations shall take place, the vast majority of newbuilding orders are expected to materialise, whether on time or with some delay" and this will lead to a younger Greek fleet.
However, Petropoulos notes: "In every shipping crisis up to today, Greek shipping has emerged stronger. This time, Greek shipping is also facing a banking crisis." He says: "It will be interesting to see whether Greek owners' flexibility, commitment and risk taking shall permit them to take advantage of the bad shipping market."
"Further Greek growth and / or survival, especially for the smaller owners, lies with shipping banks who are currently very tight in the willingness to finance shipping, despite the industry's offered rather generous terms," he says. "The attitude of banks towards foreclosures is also a key, as is whether they are prepared to continue with the same model of co-operation. Although it is anticipated banks shall become more demanding as the shipping slump continues, it is not expected we shall see numerous bankruptcies. Banks are now wiser and regard foreclosures as a true last resort. Consequently, fleet disposals shall be accomplished on a 'softly-softly' basis, with the co-operation between owners and the bank when these become inevitable."
A good relationship with banks depends on an owner's ability to maintain his loan repayments and to provide additional capital when needed to maintain such repayment. Here, says Petropoulos, besides the large private and financially strong companies, the public companies hold an edge, as they are able to raise additional capital in the market.
"A long lasting shipping crisis is likely to see a substantial consolidation of the Greek fleet into increasingly fewer names. A short lasting crisis, coupled with the return of banks towards competitive and abundant ship finance, is expected to only delay the above process," he said.

Petrofin analyst predicts shipping slump will last
This, Petropoulos believes, will result in increased scrapping of older vessels and some distressed sales.
The analyst also warns that he expects substantial consolidation to occur.
He believes there will be some newbuilding cancellations but also predicts the majority of orders will materialise, although possibly with some delay.
Petropoulos claims that finance is tight but the attitude of banks toward foreclosures is a key element. The analyst anticipates banks will become more demanding as the shipping slump continues but says he does not expect numerous bankruptcies.
The fleet peaked in 2009 with the number of vessels at 4,763 and, following a heavy slump of 108 ships in 2010, recovered to 4,714 vessels in 2011.
The analyst bases his numbers on ships of over 20,000 dwt for bulkers, tankers and containerships but uses a 10,000-dwt cut-off for the whole fleet to measure the number of companies operating. Also, unlike other analysts, Petrofin only takes into consideration newbuildings slated for delivery up to and including 2012, believing that orders with later delivery dates could be subject to cancellations, sales and delays.
Petrofin calculates that there are currently 762 Greek-based shipmanagers, up by four from last year.
Interestingly, the number of companies with larger fleets has increased noticeably, with those operating between 16 and 24 vessels growing from 33 to 37 and companies with over 25 vessels up from 31 to 34.
Yet Petrofin says the popular size in 2011 is the one to two-vessel company, which increased by 10 to 350 outfits.
By Gillian Whittaker Athens
Published: 22:01 GMT, 04 Aug 11 | updated: 20:22 GMT, 03 Aug 11

---George Economou courts controversy once again, reports Greg Miller
The culling of public shipping companies continued last week with the surprising revelation that DryShips will acquire embattled OceanFreight.
Source: Fairplay - Trade 04 Aug 2011

NewLead Holdings Ltd. Announces Delivery of New Handysize Vessel
---PIRAEUS, Greece, Aug. 2, 2011 /PRNewswire via COMTEX/ --
NewLead Holdings Ltd. (NASDAQ: NEWL) ("NewLead" or "the Company"), an international shipping company owning and operating tankers and dry bulk vessels, today announced that on July 28, 2011, the "Navios Serenity," a new Handysize dry bulk vessel of 35,000 dwt, was delivered from a Korean shipyard to NewLead's fleet.
Mr. Michael Zolotas, president, chief executive officer and interim chief financial officer of NewLead, stated, "We are pleased to have taken delivery of one of the two new Handysizes to be added to NewLead's fleet. Today, we control a fleet of 20 vessels in operation. We will continue to optimize our fleet and secure competitive charters."
Vessel Size (dwt) 35,000
Charter-out Rate (daily, net) $10,100 for the first two years and $12,000 until the end of the charter, all plus 40% profitsharing(1)
Charter Duration 12 years +/- 4 months
Anticipated Annualized EBITDA (USD millions) 2.0(2) 2.7(3)
Anticipated Aggregate EBITDA (USD millions) 27.4(4)
1. The daily base charter-out rate is $10,100 for the first two years and $12,000 thereafter. Above $14,000 per day, profit sharing is 40% based on actual earnings. Charterers have a 50% purchase option.
2. For the first two years of the charter, the anticipated annualized EBITDA calculation assumes daily operating expenses of $4,747 per day and 360 revenue days as well as profit sharing.
3. For the years three through 12 of the charter, the anticipated annualized EBITDA calculation assumes daily operating expenses of $4,747 per day and 360 revenue days as well as profit sharing.
4. Anticipated aggregate EBITDA over the life of the contract assumes daily operating expenses of $4,747 per day (growing at 3% annually) as well as profit sharing.

Thenamaris opts for Marorka's energy management system
Thenamaris currently manages tankers, bulk carriers and containerships.
In addition to system being installed, the two companies are to co-operate on future development of energy management for the maritime sector.
The company has selected Marorka's solutions to cover all major energy systems on board its fleet. Those selected include propulsion, trim & hull, power plant, steam, voyages, navigation and reporting systems.

Cutting red-tape, applying more transparency and wiping out bribery are the three requirements Greek shipowners have
Balkan Business News Correspondent - 02.08.2011
Cutting red-tape, applying more transparency and wiping out bribery are the three requirements Greek shipowners have from the government in order to invest in Greece, London-based shippers have told Athens.
In a recent meeting that the head of the Hellenic Shipping Cooperation Committee of London, Haralambos Fafalios, had with Regional Development and Merchant Marine Minister Michalis Chrysochoidis, the former also said that the tried-and-tested administrative system of the former Merchant Marine Ministry, including the coast guard, was very important for the prosperity of the Greek shipping industry. It is also a key condition to avoid a mass departure of ships from the Greek register reports Kathimerini.

Another Container Shipping Company Reports Trading Figures Losses Reduced at Diana Containerships
The company which runs five container carriers, three obtained this June, ranging between 3426 and 4714 TEU capacities and built between 1989 and 2010, currently has four of the vessels on charter to Maersk with the other to CSAV at rates believed to be ranging from $16,000 to $22,000 a day.
The Company has declared a cash dividend on its common stock of $0.03 per share. The cash dividend will be payable on August 25, 2011 to all shareholders of record as at August 15, 2011. The Company has 23,076,161 shares of common stock outstanding.