The Money and Ships session at last week’s Maritime CEO Forum at the Monaco Yacht Club discussed disruption witnessed in ship finance, ably moderated by Isabelle Rickmers, the CEO of jobs marketplace TURTLE.
Looking at the print out of the delegate list for the exclusive shipowner gathering, Harris Antoniou, founder of Neptune Maritime Leasing, noted that there was not a single bank in the list of 132 names whereas in years gone by similar events would have been rammed with bankers.
“This is a clear disruption that is taking place and it was not an abrupt one,” Antoniou told delegates. “It was a gradual one and it took place over many years, starting really with the financial crisis when legislation became more or less prohibitive for banks to engage in asset based finance.”
While there has been a resurgent interest by banks into shipping lately, Antoniou said this was largely geographical, citing Greek banks protecting their market share as an example.
Atef Abou Merhi, the managing director of Pelagic Partners, said liquidity has increased over the past five years with alternative financiers and leasing funds coming to the fore.
Things are expensive, but there’s lots of cash flow
Giving his take on the markets, Andrian Dacy, head of the global transportation group at JP Morgan Asset Management, said: “Things are expensive, but there’s lots of cash flow, so we find ourselves in this unusual environment where we’re generating a lot of money. But as is mostly the case with shipping, whether we’re doing great or whether we’re suffering, we always tend to sort of be a little bit pessimistic about where things are going to go.”
Dacy said he, and many others, were surprised how long today’s upward trend in the shipping cycle had lasted, going on to discuss in depth his geopolitical concerns.
Previously the CEO of Golden Ocean and before that Avance Gas, Ulrik Andersen was the shipowner representative on the panel in his new role with Lauritzen NexGen, a company that has three 81,200 dwt methanol dual-fuel kamsarmax vessels on order at Tsuneishi Shipbuilding in Japan.
On the newbuild project, Andersen said: “The rationale from J. Lauritzen was to tap into the green transition and these vessels are fixed on contracts with cargo. You need to have that kind of backing I think in in this environment, not only because prices are high, but also because of the uncertainty over the technology and with regards to liquidity from from my vantage point at least, is that that equity side is easy if you have the right project to invest into.”
Liquidity might be up, but that is not to say cash is being dished out willy-nilly, the audience was told.
“There are no easy projects today because in fact we’re talking about inflated asset values, so nothing is easy,” said Neptune’s Antoniou. “So at the end of the day, you just need to look at each project on its own merits, apply your criteria and make sure that the project is able to survive even in more challenging circumstances, and that goes for newbuildings as well as existing ships.”
Preparing for more challenging times was also something picked up by Mehri from Pelagic Partners who told the invited guests: “The thought of building a business case on black swan effects is a bit worrying.”
The Maritime CEO Forum is an exclusive shipowner gathering that takes place twice a year in Monaco and Singapore. Tomorrow Splash will bring readers details of what was said at the dry bulk session in Monaco last week.
