- Baltic-ICS Lunchtime Lectures return
The Baltic Exchange and Institute of Chartered Shipbrokers are pleased to announce the second series of lunchtime lectures in Shanghai, Singapore, Athens and London. The new series kicks off with seminars on the 2020 Sulphur Cap on 25/26 September.
Intended to support and develop brokers and operations professionals, the series will examine topical issues facing those working in chartering and operations roles, offering advice on best practice in critical situations and insight into the changing patterns affecting the shipping sector.
The first lecture of the five lecture series will focus on the IMO’s 2020 Sulphur Cap, looking at the outcome of the IMO’s summer discussions and industry reaction to the 2020 cap. Our speakers will look at the real figures surrounding these incoming changes as well as examine the impact on the maritime industry and charterer decision making.
Singapore | 25 Sept | 13.00
Aron Frank Sorensen
Head of the Maritime Technology and Regulation, BIMCO
London | 26 Sept | 13.00
Secretary General, International Chamber of Shipping
Shanghai | 26 Sept | 13.00
Regional Manager Asia, BIMCO
Athens | 26 Sept | 13.00
Dr. John Karakis
Technical Director, Bureau Veritas – Greece
This event is free to Baltic and ICS member companies. Those interested must register by email to firstname.lastname@example.org (reference: BXICS201).
For more details on speakers, locations and costs for non-members, click here.
- Baltic Exchange Freight and Commodities Forum, Copenhagen
On 27 September 2018, the Baltic Exchange will be holding its Freight and Commodities Forum in Copenhagen.
The event will open with a networking lunch followed by sessions on:
- Commercial Impact of the 2020 Sulphur Cap
- Dry Market Outlook
- Bulk Commodity Trends
- Dry Benchmark Revisions
- Freight Risk Management
The forum is open to member companies and invited guests only.
The event will commence with a networking lunch at 1 pm.
To view the full programme, click here.
To register, click here.
- Member update: 29 August
The following individuals have applied for Membership under an existing member company:
Company Individual BHP Billiton Freight Singapore Pte Ltd Miss Y Lu Caravel Shipping Ltd Mr A Banga Dynatec Madagascar SA Ms M L Ravalomanana
Any comments should be passed to Karen Karanicholas by 5 September 2018.
- Baltic Tanker Market Session, Copenhagen
On the morning of 27 September, the Baltic Tanker Market Session will bring together clients and brokers from across the European wet markets to hear freight and commodity output forecasts from leading analyst as well as updates on benchmark revisions and proposals. This will be followed by a networking lunch for all market participants.
Part of the Baltic Exchange Freight & Commodities Forum
The session will take place between 11.30 am – 1 pm.
To view the full programme, click here.
To register, click here.
- Merger and acquisitions uptick
The shipping sector is finally beginning to witness a consistent flow of mergers and acquisitions (M&A) transactions, whether they be public company mergers, fleet acquisitions or similar transactions. Nick Katsanos, Seward & Kissel Partner, made the observation while moderating a panel covering past and future M&A developments at Marine Money Week 2018 in New York.
Commenting on the drivers for the phenomenon, Star Bulk president Hamish Norton said there are many.
“One of the things driving it is that there was a lot of institutional investor capital invested into the shipping industry in 2012, 2013, and 2014, as people thought that shipping was coming out of its slump. A lot of that capital is due back to its owners at this point and they’re looking for liquidity, and so that creates an opportunity to provide them with liquidity in consolidating transaction. I think that’s driving some of it.”
Ove Meyer, Zeaborn managing partner, noted the ‘special situation’ in Germany where many ships were financed by the failed KG system. Now that German banks are cleaning out their books they are taking action on assets with lower values. “They’re now dissolving the problems with the ships, opening doors for consolidation on the ship management side,” he said.
Tom Higbie, Solus Alternative Asset Management managing director, believed that the other large factor is banks being much more selective than previously.
If you’re a larger company, you’re able to borrow more attractively
“If you’re a larger company, you’re able to borrow more attractively,” he explained. “If you’ve got $1bn of debt then paying at 100 basis points less makes a big difference.”
M&A in focus
Debt providers are said to be reacting positively to increased M&A transactions. Trygve P Munthe, DHT Holdings chief executive, said his business has completed two significant acquisitions over the past three years and both “have been very well-received by our existing lenders”.
“I think it comes down to a company with a sound strategy that resonates well with the lending community going out and acquiring another quality company that has been very well-received by the lending community,” he noted.
Mr Norton gave the example of Star Bulk’s Augustea acquisition, whereby Star Bulk had to gain consent from all of its lenders and all of those for Augustea. “In both cases, that was pretty straightforward because lenders want to drive consolidation. Size is helpful in driving lender interest,” he explained.
In response to a question asking what types of companies in shipping should be considering either selling or potentially merging with another company, Mr Higbie said: “My experience is nobody sells until they have to, and that usually means that they have a maturity that they can’t refinance, that they have confident breaches that the banks are not interested in waiving or that there’s some other factor forcing them. In my experience, I’ve never really seen anyone in this business sell because they want to.”
But that wasn’t the opinion of the whole panel. Opposing that viewpoint, Mr Munthe gave the example of DHT Holdings buying Samco Shipholding: “It was a classic: this was a privately-held company with a generation change and the kids wanted to do other things than run shipping companies, so that company was put up for sale,” he noted. “Last year, when we acquired all BW Group’s very large crude carriers, I think a key parameter was that they had, over time, seen that we were able to run our ships and we’d been able to get more out of the same spot market than they had. I think it was very much a seasoned traditional shipowning family just seeing that their position wasn’t ideal from a size perspective. Furthermore, here was a potential partner that was actually running a sharper operation in terms of cost and revenue generation. It was certainly not that they had to sell.”
Certainly, size is a factor as not all smaller companies have the robustness to survive the current markets.
Mr Meyer commented: “We have digitalisation in the industry, we have significant investments to cope with regulations, and we have ships or shipowners as investors on a limited timeframe buying and selling ships and wanting full transparency. For a lot of the smaller shipping companies, all that is simply not possible. If you have a small shipping company which is managing about eight or 10 ships and they have to a $2m or $3m investment in systems, in accounting, personnel etc they simply have no chance to survive.
“We still have all these zombies out which are controlled by someone else because the ships have no money. They are in bad shape, they’ve got to be sold, and it’s just a matter of time until these companies have no substance to survive on any more.”
This, he concluded, will definitely lead to more M&A activity or at the very least a handover of assets and companies to other units.
The next Shipping Economics & Investment course from the Baltic Exchange will be held on January 14 and 15 next year in London. More information can be found here.
- Baltic Exchange Golf Society: Company Cup
The Baltic Exchange Golf Society (BEGS) Company Cup will take place on Thursday 13 September at The Shire London, the UK’s only Seve Ballesteros designed course.
The Company Cup is open to all shipbroking golfers, with the format below:
- Two-person teams, competing in four balls over one round on the Seve Ballesteros Master’s course.
- Stableford scoring system, with the combined score counting to each two-person team.
- Each team does NOT have to consist of employees from the same company, clients/visitors are welcomed.
- Teams can be two principals from the same company or different offices, a principal and a broker or two brokers.
- There is no limit on the number of teams any one company wishes to enter, the more the merrier.
- There will be additional prizes for nearest to the pin, longest drive in the rough and longest drive on the fairway.
- Baltic Exchange is looking for a sponsor for a hole in one competition on one Par 3, with a car as the prize.
- Official handicap certificates are not required, but anyone playing off 24 or higher that does not have an official club handicap cannot score more than 30pts.
- This event can contribute as one of the sports for the overall David Bradley Cup winner.
Running times are as follows:
08:30 – Arrival time, bacon roll & coffee
09:15 – Tee off for morning 9 holes (front 9)
12:45 – Sit down lunch
14:00 – Tee off for 18 holes
19:00 – Drinks/prize giving
(All times are approximate & subject to change.)
Availability is on a first come first served basis.
Anyone interested in registering should contact James Pendered.
- Baltic FC Vs Danish (DRFB) and Spanish Brokers
The Baltic FC will join Danish brokers heading to Madrid for a three-way tournament against Spanish Brokers from 14-16 September. Anybody interested in joining in, either on the field or for socialising off the field, please contact 1st XI: Nat Twiggs (email@example.com) / Vets XI: Alan De Rosa or Tony McDonald (firstname.lastname@example.org).
Photos from the last round in Copenhagen can be found here.
- Baltic Wine Society: Spanish Tasting
On Wednesday 5 September the Baltic Exchange Wine Society welcomes back wine expert David Hughes to host a celebration of the emerging wine regions of Spain.
Guests will be welcomed with a glass of Reserva Cava followed by a further six wines of varied styles of grape, accompanied by a selection of tapas.
The event is priced at £15 for members, £20 for non-members (prices exclude VAT) which includes all seven wines and tapas.
Seats are limited so those interested in attending should register their interest in good time by emailing email@example.com
To view the flyer, click here.