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Kanasashi Heavy Industries Files for Creditor Protection
Financially troubled Japanese shipbuilder Kanasashi Heavy Industries (“Kanasashi”) told creditors in a closed-door meeting that it will carry on with the construction of five newbuildings. The medium sized shipbuilder has filed for creditor protection with the Shizuoka District Court two weeks ago after failing to secure more funds from its bankers. Kanasashi, which has a 25-ship orderbook including 33,000 dwt bulk carriers ordered by Hong Kong based Uni-Asia Finance (“Uni-Asia”), Denmark’s ID Shipping and J Lauritzen, used to specialise in fishing boats but ventured into the construction of larger sized cargo ships in the past few years. Continue Reading
Few Surprises But Nonetheless Interesting
A quarter, particularly the first one, does not make a year, but according to the first quarter Dealogic tables, which we received today, the axis of the ship financial world has tipped eastward. Looking at the Top 20 Bookrunner Table of which there are only eight, Asian banks populate four of the places including the three top spots, which are held by SMBC and SBI Capital Markets (State Bank of India), and Mitsubishi UFJ Financial Group (“Misubishi UFJ”) respectively. In the case of the Top 20 MLA Table, Mitsubishi UFJ Financial Group and HSBC took the top two spots and three other Asian banks populate the top 20. Total volume for the quarter was $10.6 billion, continuing the downward trend since 2007. However for those who see a glass as half full this quarters volume is in line with the comparable periods in 2005 and 2006. Is it too early to say we are reverting to the norm?
Let the Stakeholders Speak
During our conference in Hong Kong, the panel titled “Stakeholders Unite: Owners, Investors & Lenders on What Comes Next” generated a lively discussion on the many issues revolving around shipping today including the role of private equity in shipping, China’s increasing dominance in the global supply chain and the funding gap of the global orderbook. We bring you some of the highlights. Continue Reading
Let the Bankers Speak
Marine Money hosted its 2nd Annual Hong Kong Ship Finance and Investment forum yesterday with the theme “Navigating Rough Waters: Survival Today, Success Tomorrow”. The seminar brought together over 140 participants to discuss the critical issues faced by the shipping industry today. We will be providing more coverage in the next edition but in the meantime, we bring you the highlights from the bankers’ roundtable.
Panel participants:
Nora Huvane, Director, Marine Money Asia
Mr. Charles Reineke, SVP, Global Shipping Finance Group, SMBC
Mr. Terence Yiu, Managing Director, Asia Shipping Division, BNP Paribas
Mr. Felix Ulbricht, Head of Deutsche Shipping Asia, Deutsche Bank
Mr. Paul Chang, Head of Shipping Asia, HSH Nordbank Continue Reading
5th Annual Marine Money Gulf Ship Finance Conference, Dubai, 4th March 2009
In a week when stock markets steeply declined and then recovered, when Sri Lankan cricketers were attacked in Pakistan and the world continued it’s crazy momentum, Marine Money with Anchor Sponsor Tufton Oceanic (Middle East) Limited hosted its 5th Annual Marine Money Gulf Ship Finance Conference in the luxury of the Grand Hyatt, Dubai.
Forewarned that things were pretty bad in Dubai and that it would be a struggle to get people to attend, we proudly welcomed 152 speakers and delegates. And it is also significant that half of today’s participants attended our conference in Dubai for the first time. That is a lot of new networking opportunities and it demonstrates that shipping continue to develop in Dubai and the Gulf region.
Waivers And More Waivers
Not unsurprisingly, the difficulties in the marketplace are becoming more evident as the number of waivers of covenants increases in the public sphere. However, we understand that it is on the private, or dark side if you will, where the heavy lifting, at least in terms of restructuring, is taking place. The appropriate analogy might be the bare-knuckle storm below the calm sea of the public genteel discussions. Nevertheless, these exercises may be nothing more than band-aids should the market not improve. We certainly understand the cautious approach taken with respect to the public companies given the ramifications. The question remains as to what impact the private discussions might have on the public. We watch and wait as the parties stake out their positions.
Continue Reading
Hard Numbers
Moving from the theoretical to the concrete, the following examples illustrate the real cost of today’s crises:
Genco Bites the Bullet
On Tuesday, Genco Shipping & Trading (“Genco”) made the correct but painful decision to cancel the previously announced acquisition of six dry bulk newbuildings, including three Capesize and three handysize vessels, from Lambert Navigation et.al., at an aggregate purchase price of $530 million. As part of the agreement, the sellers will retain the deposits totaling $53 million. The three Capesize vessels and three Handysize vessels are being constructed in the Daehan and Jinse shipyards in South Korea, with deliveries commencing in the 4th quarter 2008 (two Handysize) through 2009.
3rd Quarter Report Card
Last week, Dealogic published its 3rd quarter scorecard measuring the performance of the syndicated loan market for shipping transactions. Below we have reproduced their tables showing the Top 20 Mandated Lead Arrangers and Bookrunners for the nine-month period. As far as first and second place are concerned there is no surprise as Nordea and DnB Nor continue to battle it out with Nordea taking top honors as bookrunner and DnB Nor in first place, by the closest of margins, as mandated arranger.
Largest FPSO Project Loan Ever
BTMU and Fortis, as Coordinators, announced this week the successful closing of a $585 million project loan to finance the conversion and subsequent operation offshore Brazil of the FPSO Espirito Santo. The FPSO is owned by SBM Offshore (51%) and MISC Berhad (49%) and upon delivery will enter into a 15 year charter to Shell Brazil.
Despite the challenging market conditions, a total of 11 banks (BNP Paribas, BTMU, CIC, DnB Nor, Fortis, ING, Mizuho, Rabobank, RBS, Sociiete Generale and SMBC) participated in the financing. The loan was significantly oversubscribed which all owed for final take downscaling for all syndicate members.
Direct from Imabari City, Japan
For the first time in our history, Marine Money held its 3rd Annual Japan Ship Finance forum in the traditional island of Shikoku. Despite being the smallest of Japan’s four main islands, Shikoku plays an extremely vital role in the world’s maritime industry as the home to many established Japanese shipyards and shipowners who collectively own about five percent of the global fleet.
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