The conference opened a highly esteemed panel of shipping personalities who discussed the regulatory changes and the strategic decisions about capital investment in shipping.
Mr. Harry Vafias CEO of STEALTHGAS moderated the conversation and asked to comment the condition of the shipping market and where to invest.
Mr. Petros Pappas chief executive officer of Star Bulk Carriers answered that he wouldn’t invest in shipping and wait as all sectors containership tankers gas carriers and drybulk experience a strong market and the order book is quite high in certain segments.
However Dr. John Coustas president & CEO Danaos Corp said that it makes sense to invest in fuel efficient vessels and in decarbonization projects like refitting ships. Overall he agreed with Petros Pappas in maintaining a “wait and see” strategy.
Mr. Jerry Kalogiratos CEO and Director of Capital Product Partners said that despite the high order book in LNG and gas carriers the demand for such cargoes will increase in years to come and investing in the decarbonization of shipping with dual fuel vessels will pay dividends for those who will focus on the energy transition.
In addition Capital has invested in ammonia carriers and CO2 carriers as the carbon capture market and demand for alternative fuels will expand in the next years.
Mr. Leon Patitsas founder & CEO Atlas Maritime suggested investing in tankers as the orderboook is still low although people is reluctant to build new ships. He expects that exports of oil will increase the next years so tankers market will improve further.
In the car carriers market there is a huge potential because of the increased productivity of electric cars.
Mr. Elias Sakellis chief investment officer of Borealis Maritime told that the most attractive sector is offshore vessels that facilitate oil exploration platforms and other activities as the order book is very limited.
Regarding the way of financing investments in shipping the speakers told that they follow a policy of moderate leverage as the interest are currently quite high. Leon Patitsas referred to CM LEMOS who sustained the crisis of 80s because he didn’t have any loan.
Harry Vafias asked if the conflict in Israel is a bad development for shipping.
Petros Pappas explained that geopolitics are influencing shipping in the most of occasions leading upward the freight rates even more. Dr. Coustas remarked that today markets have the ability to balance even better than in the past and absorb the impacts from the geopolitical events.
All speakers agreed that escalation from Iran will have negative impact but they hope that the situation will not spread further although geopolitic events are very helpful for shipping.
ESG strategy
The speakers of the next panel referred to the technology progress and the mission towards clean shipping. The discussion was moderated by Dimitris Sakipis head of ESG & Maritime Sustainability Center PwC Greece.
Tom Lister chief commercial officer & head of ESG of Global Ship Lease said that from a business perspective we have to adopt a very active approach in the decarbonization of shipping.
Charis Plakantonaki chief strategy officer marked that besides the regulations and the rules are imposed by the various governmental bodies incl. IMO the shipping industry has to follow an ESG policy in order to maintain the requirements of the charterers and the financial institutions for more sustainable operations.
Speakers also insisted that decarbonization may happen sooner than it is expected as the society continues to ask for environmentally conscious transportation.
It was also mentioned that investors are concerned about ESG standards but not all of them yet.
Alexandros Hadjipateras said that there are massive opportunities in front of us in terms of decarbonization of shipping and we must be positive taking all the necessary measures to reduce air emissions and increase industry’s energy efficiency.
Speakers agreed that there are technical solutions available for energy efficiency that must be embraced by the shipping companies and not expecting the charterer or the consumer to pay the cost of those technical improvements.
Mr Hadjipateras mentioned that it’s important to work together with the engine manufacturers and shipyards to develop safe, cost efficient alternative fuels in the immediate future.
In the next session Alexia Hatzimichalis partner and head of Athens office Watson Farley & Williams interviewed Aristides Pittas CEO of Euroseas /EuroDry who represents a tradition of 4 generations in shipping. He described the last 25 years achievements and the difficult moments.
Mr Pittas started Eurobulk with 2 ships and tried to grow the company cooperating with other partners. In 2005 decided to list his company in the US secondary public market raising 20$ million.
The American investors at that time didn’t know the shipping market. The decision to split in two different listed companies separating drybulk vessels from containerships was quite successful as the capitalization of the companies doubled in value. Mr Pittas told that we follow a strategy of being aligned with our common shareholders and we are proud of the way of moving ahead being conservative ethical and caring of our employees.
Describing the difficulties he mentioned 1997 the Asian crisis, 2009 collapse of Lehman Brothers and 2020 Covid -19 period. He also explained that globalization is here to stay and advice the young generation to keep an eye what is happening in the world and he expressed his optimism for Greek shipping.
Banks must remain disciplined
Drybulk shipping anticipates to a healthy market
The dry cargo supply fundamentals were discussed by a highly respected panel of shipping experts including Stavros Gyftakis CFO Seanergy Maritime, Simos Pariaros chief administrative officer of Euroseas, Yiannis Kourkoulis vice president of Best Oasis and Nikolas Triantafyllakis CEO of W Marine. The panel was moderated by Eva Tzima head of Research & Valuations Seaborne Shipbrokers.
Speakers pointed out that slowing global growth and shipping costs are hampering demand and the war and geopolitical events cause a slowdown in the economic confidence.
However the dry bulk cargo sector currently enjoys a strong freight market and especially the stock listed companies offer great investment opportunities and may give double digit returns in the near future if the charter rates continue to improve. We have also to consider that shipbuilding will look much different in the next 20-30 years so the dry bulk cargo companies have to invest much more earlier than it is required on retrofitting innovative energy savings systems, adopting digitalization and embracing ESG standards.
Arlie Sterling president of Marsoft and Anna Stablum business development director of ClimeCo presented the topic of ETS and the global regulated markets.
Shipfinance
The topic of financing growth in a strong market cycle was discussed by a panel of bank’s senior executives and financial analysts including George Tzelepis director shipping of Credit Susie’s, Theofanis Moustakatos head of shipping National Bank of Greece, Ilias Katsoulis head of shipping Deutsche Bank, Hugues Calmet DNB Bank, Nicholas Pavlidis head of shipping Bank of Cyprus and Michael De Visser. The discussion was moderated by Chris Vartzis Stephenson Harwood.
The speakers pointed out the bank finance continues to support Greek shipping despite a plethora of alternatives arising over the past 25 years. The bank will remain to be the main source of shipping investments despite the high interest rates and environmental criteria on financing.
Today banks borrow loans based on the ability to produce cash flow and following a relationships strategy and Know your customers approach. It was mentioned that shipping banks must be disciplined flexible and patient in the next years as Greek shipping companies will take delivery of 250 newbuilding ships with a value of around $20m.
Today the valuation method of banks include ESG criteria, energy transition initiatives such retrofitting of energy efficiency systems and the cost of debt shouldn’t be the main driver but the financial viability of the project.
Responding to the changing landscape of shifinancing banks must be committed and maintain a diversified and international portfolio. Smaller banks have to adapt faster in the rapidly changing shipping environment. On the other hand as advisors bank’s must encourage their customers to adopt a corporate structure strategy and be prepared for what is coming.
30 years of TEN
During the event NYSE listed TEN marked its 30 year anniversary in the sector of the oil sea transportation. The president of TEN Mr. George Saroglou remarked that: “TEN started with 4 tankers and today operates a versatile fleet of 68 modern crude, oil, and product tankers, LNG, and shuttle tankers. TEN has built totally 94 vessels and granted $2,5 billions net income. TEN has under construction another 9 tankers”.
Raising capital for shipping
After a long pause there appears some interest again from investors in shipping, both public and private. However despite healthy cash flow, sustained dividends and what looks like continued strong fundamentals in most sectors, many stocks still trail NAV.
In this context a listed shipping company can raise money from the stock market however the most of those companies do not need funds as they do not have new projects in process.
In addition to this they can also raise money from the debt market where the rates are higher than other options.
There is always access to capital irrespective of the cyclicality of the market however currently the shipping market do not encourage investors to fund new projects as the ships values are moving well above NAV.
All those issues were discussed by Chiara Caprioli Luxembourg Stock Exchange, Omar Nokia Jeffries Harry’s Kosmatos corporate development officer of TEN, Fotis Giannakoulis investment banking Fearnley Securities and Robert Lustrin partner head of shipping capital markets of Reed Smith.
Greek shipping & US Capital markets
Douglas Navrinac global head of maritime investment banking Jeffries, Christopher Thomas CFO of TC Holdings and Edward Horton from Seward & Kissel discussed Greek shipping and US capital markets relationships for the past 25 years, lessons learned and way forward.
They said that the listed shipping companies which focus on operating a diversified fleet are more successful and there is a lot of room for expansion for small shipping companies provided that they have an ambitious and clear development strategy.
Chinese leasing
The next topic was about Chinese Leasing as a solution for Greek owners followed by a Panel Discussion that included Linna Fan, Head of Shipping Finance Division, BOCOM Financial Leasing Co., Ltd.
Emily Chen, Director of Europe & America, Ship Leasing Dept., AVIC International Leasing Co., Ltd
Yi Yang, Managing Director, Head of Origination Team, Shipping Leasing Dept., CMB Financial Leasing Co., Ltd, Christoforos Bisbikos, Partner and Head of Hong Kong Office, Watson Farley & Williams.
Moderator was James Stove-Lorentzen Jr, Managing Partner, NorthCape Pte. Ltd.
The topic of Seeking Chinese certainty in a chaotic era presented by Xin Man, General Manager - Business Development and Operations Dept., Seacon Shipping Group Holdings Limited.
Non- bank financing
The issue of Non-bank financing was discussed by Yannis Kariofyllidis, Chief Operating Officer, Australis Maritime Limited, Iraklis Tsirigotis, Director of Origination, Neptune Maritime Leasing, Nicholas Petrakakos, Partner & Managing Director - Maritime & Offshore, Investment Banking, Alantra, Alexandros Valentis, Ship Finance Director, Transport Capital (Greece) Inc., Wilhelm Magelssen, Partner & Fund Manager, NRP Maritime Asset Management AS, Moderator: Vassiliki Georgopoulos, Partner, Watson Farley & Williams . Speakers said that there are many sources of non-bank financing and these have become core for a large segment of the shipping industry. Larger and smaller owners, larger and smaller deals are all within the interest zone of these non-bank lenders. Non banking financing tend to become the norm for owners big and small and it is important how to handle increased pricing, assessing what is safe leverage and ticking the right profile.
Greek shipping highlights
The last panel of speakers focused on Greek shipping highlights over 25 years and what is yet to come. The above topic was presented by Evangelos Chatzis, Chief Financial Officer, Danaos Corporation, Pankaj Khanna CEO Heidmar Inc., Theo Xenakoudis, Chief Commercial Officer Managing Director - Piraeus Office IRI/The Marshall Islands Registry, Alexis Stephanou Chief Financial Officer Goldenport Group of Companies.
Moderator was Nigel Bowen-Morrris, Managing Partner, Stephenson Harwood, Greece.
The conference theme was SHIPPING AND FINANCE MAKES THE WORLD GO ROUND and the fact is that Greek shipping is the most influential on the planet.
All panelists recount highlighted of years gone by and what to expect in the next decade from Piraeus, Glyfada and the northern suburbs.
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