Below is the news regarding the maximum imposition of imported vessels allowed. This is a positive development for Indonesian Shipping companies. With current implementation of cabotage law which requires Indonesian flags to be able to trade between Indonesian ports and the fact that Indonesia has not adopted the IMO regulation of mandatory scrapping of non double hull vessels, all of the non-double hulls vessels which are very cheap at this moment pending the deadline to 2010 can be added into the fleet and essentially in the future, given the age restriction, only DH ships which are relatively more expensive will compete with us.
Jumat, 01/05/2009 08:08 WIB
Impor Kapal Bekas Maksimal Berumur 15 TahunSuhendra - detikFinance
(Foto: dok detikcom)
Jakarta - Pemerintah akan menetapkan batas usia impor pembelian kapal (laut) bekas maksimal 15 tahun pada tahun 2011. Saat ini izin impor kapal bekas masih diberikan untuk usia kapal maksimal 25 tahun.Demikian disampaikan Direktur Jenderal Industri Alat Transportasi dan Telematik Departemen Perindustrian Budi Dharmadi saat ditemui di gedung DPR RI, Kamis (30/4/2009)."Kapal bekas itu boleh impor tetapi maksimum 25 tahun karena beda dengan mobil, kapal umurnya lebih panjang.Tahun depan kita berencana mengurangi menjadi 20 tahun, tahun depan dikurangi lagi menjadi 15 (2011)," jelasnya.Mengenai aturan impor ini, lanjut Budi, sedang dibicarakan dengan Departemen Perdagangan, nantinya ketentuannya akan diatur dalam bentuk peraturan menteri perdagangan (permendag)."Nanti maksimal itu yang diizinkan 15 tahun di 2011, sebab ini yang berlaku dinegara-negara lain didunia," jelas Budi. Ketentuan ini menurutnya tidak terlepas dari upaya melindungi industri galangan kapal di dalam negeri dan meningkatkan standar keamanan kapal yang beroperasi di dalam negeri."Di dunia ini sekarang 15 tahun tapi kalau teknologi berubah atau model angkutan berubah mungkin saja para ahli kapal berkumpul lagi," katanya.Sebelumnya Ikatan Perusahaan Industri Kapal dan Lepas Pantai Indonesia (Iperlindo) mendesak kepada pemerintah agar mempertimbangkan atau merevisi ketentuan impor kapal bekas yang saat ini masih diberikan izin dengan usia 25 tahun. Jika batas usia izin impor bisa lebih rendah lagi maka tentunya akan mendorong industri galangan kapal di dalam negeri, karena sebagian besar untuk jenis kapal tertentu produksi dalam negeri sudah mampu memenuhinya.Sampai saat pemerintah masih mengizinkan impor kapal bekas yang mengacu pada peraturan Keputusan Presiden (Keppres) No. 22 tahun 1998 tentang Impor Kapal Niaga dan Kapal Ikan Dalam Keadaan Baru dan Bukan Baru. Selain itu, ada Peraturan Menteri Perdagangan (Permendag) No49 tahun 2007 tentang ketentuan impor barang modal bukan baru, termasuk kapal bekas berusia di bawah 25 tahun
Thursday 30 April 2009
Wednesday 29 April 2009
Eitzen axes again
Eitzen Chemical has cleared its newbuilding slate with the sale of its final three ships to clients of Laurin Maritime.
Eitzen Chemical managing director Terje Askvig
The trio of ships are building at Brodotrogir in Croatia and have been sold through a novation agreement, Eitzen said.
Under the deal Laurin Maritime will assume all rights and obligation the Company has towards the yard, including all further payment obligations.
The basis for the deal is a total price of $124m including extras. However, it is conditional on approval from the yard and its refund guarantors.
Earlier this month Eitzen Chemical chopped an order for five chemical carriers at Japan’s Sasaki Zosen due to the global financial crisis.
Walking away from those newbuildings cost the Oslo-listed owner the $7.5m deposit plus a further cancellation payment of $7.5m due in November.
However, the decision to axe the order for the 12,000-dwt ships helped slice $175m from its newbuilding commitments.
“Together with the agreement with the Japanese yard, which now is final and unconditional, and the four newbuilding delivered this year, our capital expenditure program has been reduced from $350m at the beginning of the year to zero,” said chief executive Terje Askvig.
“We believe this will contribute to facilitate an agreement which we have initiated with our lenders to amend the debt repayment schedule and the covenant structure to better fit the current market environment.”
In addition Eitzen Chemical said it has found it necessary to increase the impairment charge as of year end 2008 to $313m, up from $156m previously reported.
It does not expect to record a loss from the above transaction, nor does it expect to record a loss from the cancellations in Japan reported earlier, except for the $7.5m cancellation fee.
Eitzen Chemical operates a fleet of 84 vessels – 68 of which are owned and leased, and a further 16 vessels are operated for partners.
By Dale Wainwright in Singapore
Eitzen Chemical managing director Terje Askvig
The trio of ships are building at Brodotrogir in Croatia and have been sold through a novation agreement, Eitzen said.
Under the deal Laurin Maritime will assume all rights and obligation the Company has towards the yard, including all further payment obligations.
The basis for the deal is a total price of $124m including extras. However, it is conditional on approval from the yard and its refund guarantors.
Earlier this month Eitzen Chemical chopped an order for five chemical carriers at Japan’s Sasaki Zosen due to the global financial crisis.
Walking away from those newbuildings cost the Oslo-listed owner the $7.5m deposit plus a further cancellation payment of $7.5m due in November.
However, the decision to axe the order for the 12,000-dwt ships helped slice $175m from its newbuilding commitments.
“Together with the agreement with the Japanese yard, which now is final and unconditional, and the four newbuilding delivered this year, our capital expenditure program has been reduced from $350m at the beginning of the year to zero,” said chief executive Terje Askvig.
“We believe this will contribute to facilitate an agreement which we have initiated with our lenders to amend the debt repayment schedule and the covenant structure to better fit the current market environment.”
In addition Eitzen Chemical said it has found it necessary to increase the impairment charge as of year end 2008 to $313m, up from $156m previously reported.
It does not expect to record a loss from the above transaction, nor does it expect to record a loss from the cancellations in Japan reported earlier, except for the $7.5m cancellation fee.
Eitzen Chemical operates a fleet of 84 vessels – 68 of which are owned and leased, and a further 16 vessels are operated for partners.
By Dale Wainwright in Singapore
Tuesday 28 April 2009
Clarkson: "recession in the industry's mind, not its pocketbook"
Tuesday, 28 April 2009
Shipping today, although supposedly in deep crisis, is in reality still wallowing in cash after one of the best years in its history. This is the conclusion of Martin Stopford, Clarkson’s research boss, writing in the firm’s latest weekly report. Although the Clarksea index hit a new all-time low of $7,500 a few days ago, the last 12 months is still one of the most profitable on record. Since its peak - $50,381 a day last May, the index has lost about $1,000 each week. However, the 12-month rolling average of the index, which covers the tanker, bulk carrier, gas and containership sectors and is therefore a good reflection of the industry generally, is still at $26,000 a day, admittedly down from its 2008 peak of $38,950, but still not far below the previous all-time peak of $30,000 in May 2005. “From a financial point of view, these numbers tell us that recession is in the industry’s mind, not its pocketbook,” Stopford says. No wonder, he says, that the queue of potential investors looking for bargains is finding a disappointing absence of desperate sellers. In fact, he says, at this stage in the game, after five years of record profits, it would require a special talent to be running out of cash! There are disappointing implications for demolition, however, Stopford believes. Although 10m dwt of ships was scrapped during the first quarter of the year - compared with 12.6m for the whole of 2008 - this momentum is only likely to be maintained based on fears about the future, rather than financial hardship at present.
Source: SeaTradeAsia-Online
Shipping today, although supposedly in deep crisis, is in reality still wallowing in cash after one of the best years in its history. This is the conclusion of Martin Stopford, Clarkson’s research boss, writing in the firm’s latest weekly report. Although the Clarksea index hit a new all-time low of $7,500 a few days ago, the last 12 months is still one of the most profitable on record. Since its peak - $50,381 a day last May, the index has lost about $1,000 each week. However, the 12-month rolling average of the index, which covers the tanker, bulk carrier, gas and containership sectors and is therefore a good reflection of the industry generally, is still at $26,000 a day, admittedly down from its 2008 peak of $38,950, but still not far below the previous all-time peak of $30,000 in May 2005. “From a financial point of view, these numbers tell us that recession is in the industry’s mind, not its pocketbook,” Stopford says. No wonder, he says, that the queue of potential investors looking for bargains is finding a disappointing absence of desperate sellers. In fact, he says, at this stage in the game, after five years of record profits, it would require a special talent to be running out of cash! There are disappointing implications for demolition, however, Stopford believes. Although 10m dwt of ships was scrapped during the first quarter of the year - compared with 12.6m for the whole of 2008 - this momentum is only likely to be maintained based on fears about the future, rather than financial hardship at present.
Source: SeaTradeAsia-Online
Tanker sector in the crisis - a comparative position
Tuesday, 28 April 2009
The tanker sector was the last of the three major shipping sectors -containers, dry bulk and tanker - to be hit hard by the crisis. Because of the strict vetting system and pollution laws, it has the highest operating standards. There is specific legislation that compels removal of older tonnage from the fleet. The companies are generally older and more mature with stronger balance sheets and reserves than listed companies in the other sectors.
Most tanker companies have been less aggressive in expansion than their counterparts the other two sectors. The order book is large, but smaller comparatively with the other two sectors and there is compulsory phase out of older single hull tonnage and stricter age limitations for trading. There is definitely an over capacity problem that needs to be worked out and some over extended companies. AnalysisTanker companies have generally been pioneers in shipping. They developed the concept of very large vessels. They made great strides in hull design with double bottoms, segregated ballast and double hull. They developed innovative cargo system designs to carry specialty cargoes like LNG, LPG, chemicals and clean petroleum products.
They were also innovative financially. Companies like OSG were among the first to go to public markets. In the latest upturn, they were among the first to expand. Genmar did an early block vessel acquisition from Metrostar. OSG bought out Stelmar. These were timely acquisitions, taking advantage of the upward market cycle.Ironically, Top Ships - a laggard, under-performer in the sector- was one the first listed companies to restructure with its lenders, selling off a large part of its fleet in 2008 to de-leverage and improve liquidity. It was a timely move.The tanker sector was not as hard hit in the fall of 2008 as its counterparts in other sectors. Rates were down, but not catastrophically low. For a time, the sector benefited from extreme contango, where there was an increased demand for storage and the winter season. Perhaps, however, this storage demand contributed in part to the current market conditions where the fall in activity and freight levels has really begun to bite hard. The clean product market has been dismal lately and the fallout is impacting negatively also the chemical trades.Since most tanker companies have stronger balance sheets than their shipowner brethren in the other two sectors, they in a better position to weather the storm.
The extreme case is Nordic-American (NAT), which is entirely free of senior debt and carries only market risk. Others like OSG have over US$ 1 billion in liquidity. So far there have not been dilutive new capital raises to pay down down debt and cover losses as has been endemic in the dry bulk sector.With major oil companies as customers, their counter party default risks are smaller that the dry bulk sector, although there are some disturbing rumors about charter payment delays lately. They also are generally less exposed to massive asset impairment from large block vessel acquisition and M&A deals late in the cycle, where many dry bulk owners have taken big losses. Tanker values, however, are beginning to fall at a faster pace than previously.
BLT is a notable exception buying out Chembulk (former MTM) at a mark up price from AMA with heavy debt finance very late in the cycle. Eitzen has been struggling from overexpansion. The Arlington merger with Genmar was a timely sellout, but it is relatively small deal for Georgiopoulos Group done on a conservative basis. Frontline may have some problems with their block acquisition of the TOPS Suezmax fleet. The vessels are older and said to be without center bulkheads, not the most desirable tonnage to have in this market.We can only hope that the current low oil prices will lead to new demand soon and the needs for crude oil prove more inelastic than other sectors.
Emerging economies like China and India are more oil intensive than Western developed countries. A growing number of oil producers will be in need to export more for their growing domestic needs. Seaborne transportation distances for crude oil are likely to remain large. Some economists are predicting a pick up in economic activity by the end of 2009, but others feel than 2010 will be a lackluster year. In the meantime, there is certainly going to be some restructuring and consolidation in this sector.
Source: Gerson Lehman Group
The tanker sector was the last of the three major shipping sectors -containers, dry bulk and tanker - to be hit hard by the crisis. Because of the strict vetting system and pollution laws, it has the highest operating standards. There is specific legislation that compels removal of older tonnage from the fleet. The companies are generally older and more mature with stronger balance sheets and reserves than listed companies in the other sectors.
Most tanker companies have been less aggressive in expansion than their counterparts the other two sectors. The order book is large, but smaller comparatively with the other two sectors and there is compulsory phase out of older single hull tonnage and stricter age limitations for trading. There is definitely an over capacity problem that needs to be worked out and some over extended companies. AnalysisTanker companies have generally been pioneers in shipping. They developed the concept of very large vessels. They made great strides in hull design with double bottoms, segregated ballast and double hull. They developed innovative cargo system designs to carry specialty cargoes like LNG, LPG, chemicals and clean petroleum products.
They were also innovative financially. Companies like OSG were among the first to go to public markets. In the latest upturn, they were among the first to expand. Genmar did an early block vessel acquisition from Metrostar. OSG bought out Stelmar. These were timely acquisitions, taking advantage of the upward market cycle.Ironically, Top Ships - a laggard, under-performer in the sector- was one the first listed companies to restructure with its lenders, selling off a large part of its fleet in 2008 to de-leverage and improve liquidity. It was a timely move.The tanker sector was not as hard hit in the fall of 2008 as its counterparts in other sectors. Rates were down, but not catastrophically low. For a time, the sector benefited from extreme contango, where there was an increased demand for storage and the winter season. Perhaps, however, this storage demand contributed in part to the current market conditions where the fall in activity and freight levels has really begun to bite hard. The clean product market has been dismal lately and the fallout is impacting negatively also the chemical trades.Since most tanker companies have stronger balance sheets than their shipowner brethren in the other two sectors, they in a better position to weather the storm.
The extreme case is Nordic-American (NAT), which is entirely free of senior debt and carries only market risk. Others like OSG have over US$ 1 billion in liquidity. So far there have not been dilutive new capital raises to pay down down debt and cover losses as has been endemic in the dry bulk sector.With major oil companies as customers, their counter party default risks are smaller that the dry bulk sector, although there are some disturbing rumors about charter payment delays lately. They also are generally less exposed to massive asset impairment from large block vessel acquisition and M&A deals late in the cycle, where many dry bulk owners have taken big losses. Tanker values, however, are beginning to fall at a faster pace than previously.
BLT is a notable exception buying out Chembulk (former MTM) at a mark up price from AMA with heavy debt finance very late in the cycle. Eitzen has been struggling from overexpansion. The Arlington merger with Genmar was a timely sellout, but it is relatively small deal for Georgiopoulos Group done on a conservative basis. Frontline may have some problems with their block acquisition of the TOPS Suezmax fleet. The vessels are older and said to be without center bulkheads, not the most desirable tonnage to have in this market.We can only hope that the current low oil prices will lead to new demand soon and the needs for crude oil prove more inelastic than other sectors.
Emerging economies like China and India are more oil intensive than Western developed countries. A growing number of oil producers will be in need to export more for their growing domestic needs. Seaborne transportation distances for crude oil are likely to remain large. Some economists are predicting a pick up in economic activity by the end of 2009, but others feel than 2010 will be a lackluster year. In the meantime, there is certainly going to be some restructuring and consolidation in this sector.
Source: Gerson Lehman Group
Sunday 26 April 2009
BLT - Research Report by Danareksa
Dear All,
Please find attached the link to the above research report.
http://rapidshare.com/files/226225655/2009.04.27_BLT_Research_Report.pdf
Thank you for your attention.
Regards
Please find attached the link to the above research report.
http://rapidshare.com/files/226225655/2009.04.27_BLT_Research_Report.pdf
Thank you for your attention.
Regards
BLT - Media News on Cabotage
Dear All,
Please find attached the related news.
http://rapidshare.com/files/226203812/2009.04.27_Media_News_Cabotage.pdf
Thank you for your attention.
Please find attached the related news.
http://rapidshare.com/files/226203812/2009.04.27_Media_News_Cabotage.pdf
Thank you for your attention.
Thursday 23 April 2009
BLT - Media News about Dividend
By Berni Moestafa
April 23 (Bloomberg) -- PT Berlian Laju Tanker, Indonesia’s biggest shipping company, dropped the most in more than two months in Jakarta trading after slashing its dividend. Berlian declined as much as 10 percent to 630 rupiah, the sharpest intraday drop since Feb. 17. The stock was trading at 660 rupiah as of 10:07 a.m. local time, while the Jakarta Composite index retreated 0.7 percent. The shipping company will cut its dividend to 5 rupiah a share from 50 rupiah a year earlier, Finance Director Kevin Wong said yesterday after a shareholders meeting. The company is cutting the payout to preserve funds for expansion.
Souce: Bloomberg --Editors: Anand Krishnamoorthy, Neil Denslow
April 23 (Bloomberg) -- PT Berlian Laju Tanker, Indonesia’s biggest shipping company, dropped the most in more than two months in Jakarta trading after slashing its dividend. Berlian declined as much as 10 percent to 630 rupiah, the sharpest intraday drop since Feb. 17. The stock was trading at 660 rupiah as of 10:07 a.m. local time, while the Jakarta Composite index retreated 0.7 percent. The shipping company will cut its dividend to 5 rupiah a share from 50 rupiah a year earlier, Finance Director Kevin Wong said yesterday after a shareholders meeting. The company is cutting the payout to preserve funds for expansion.
Souce: Bloomberg --Editors: Anand Krishnamoorthy, Neil Denslow
Fact that Chemical Rates Remain Relatively Stable Amid Crisis
Please refer to link below on the above.
http://rapidshare.com/files/225053635/2009.04.20_Fact_that_Chemical_Segments_is_Stable.pdf
Thank you for your attention
Regards
http://rapidshare.com/files/225053635/2009.04.20_Fact_that_Chemical_Segments_is_Stable.pdf
Thank you for your attention
Regards
INTERTANKO Expresses Disappointment at Korean Court Verdict on Hebei Spirit
Thursday, April 23rd, 2009
While INTERTANKO welcomes the decision of Korea’s Supreme Court to accept the appeal concerning the damage to the Hebei Spirit (the so-called ‘destruction’ charges), it notes with surprise its decision to dismiss the appeal concerning the charges of pollution, and is disappointed that it appears that the Master and Chief Officer, sometimes called the Hebei Two, are neither exonerated nor necessarily repatriated immediately. INTERTANKO is awaiting more detail from the translation of the written verdict, but is immediately concerned that aspects of the case have been referred back to the Appellate Court – which might take 6-10 weeks to start and several months to finish.
The Association is disappointed that the verdict falls short of the ‘innocent of all charges’ verdict handed down by the Daejeon District Court back in June last year. “These men were found innocent last June by the Daejeon District Court,” says Dr Peter Swift, Managing Director of INTERTANKO.
“We are disappointed with the decisions handed down today and are still calling for the full exoneration and immediate repatriation of the two officers.” Even though the Hebei Two are now free from the threat of imprisonment, they are in principle required to attend the forthcoming lower court hearings. The conditions of the bail set earlier in the year still require them to remain in Korea. With an ‘exit ban’ still in place, they are unable to return to their families in India.
It is now more than 500 days since the incident, which means that the Hebei Two, Captain Jasprit Chawla and Chief Officer Syam Chetan, have been detained in Korea for more than 500 days. Captain Chawla’s wife makes the point when she says, “My husband is not a criminal. He is a professional sea-captain. My husband is a good man. He is honest and hard working and dedicated to his family and to his profession. His continued detention in Korea deprived me of a husband and our son of his father; and the marine profession of one of its best sea captains”. This result means that, even though the appeal against the ‘destruction’ charges has succeeded, the fines for pollution damage stand and the case will drag on in the lower court, perhaps for several months. The bid to clear the names of these two innocent men therefore continues.
Source: 'The Maritime Executive';
While INTERTANKO welcomes the decision of Korea’s Supreme Court to accept the appeal concerning the damage to the Hebei Spirit (the so-called ‘destruction’ charges), it notes with surprise its decision to dismiss the appeal concerning the charges of pollution, and is disappointed that it appears that the Master and Chief Officer, sometimes called the Hebei Two, are neither exonerated nor necessarily repatriated immediately. INTERTANKO is awaiting more detail from the translation of the written verdict, but is immediately concerned that aspects of the case have been referred back to the Appellate Court – which might take 6-10 weeks to start and several months to finish.
The Association is disappointed that the verdict falls short of the ‘innocent of all charges’ verdict handed down by the Daejeon District Court back in June last year. “These men were found innocent last June by the Daejeon District Court,” says Dr Peter Swift, Managing Director of INTERTANKO.
“We are disappointed with the decisions handed down today and are still calling for the full exoneration and immediate repatriation of the two officers.” Even though the Hebei Two are now free from the threat of imprisonment, they are in principle required to attend the forthcoming lower court hearings. The conditions of the bail set earlier in the year still require them to remain in Korea. With an ‘exit ban’ still in place, they are unable to return to their families in India.
It is now more than 500 days since the incident, which means that the Hebei Two, Captain Jasprit Chawla and Chief Officer Syam Chetan, have been detained in Korea for more than 500 days. Captain Chawla’s wife makes the point when she says, “My husband is not a criminal. He is a professional sea-captain. My husband is a good man. He is honest and hard working and dedicated to his family and to his profession. His continued detention in Korea deprived me of a husband and our son of his father; and the marine profession of one of its best sea captains”. This result means that, even though the appeal against the ‘destruction’ charges has succeeded, the fines for pollution damage stand and the case will drag on in the lower court, perhaps for several months. The bid to clear the names of these two innocent men therefore continues.
Source: 'The Maritime Executive';
BLT - Standard Chartered Bank Investor Conference
BLT will participate at the above event with the following details:
Day/Date: Monday, 4th May 2009
Time: 09.00am - 05.00pm
Venue: Ritz-Carlton Hotel, Jakarta
Day/Date: Monday, 4th May 2009
Time: 09.00am - 05.00pm
Venue: Ritz-Carlton Hotel, Jakarta
JP Morgan AM to launch shipping strategy
Below news that Dry and Containership segments will be targeted for investment in the distressed shipping market further strengthen the fact that dry bulk and containership sectors have performed very badly and that chemical and gas tankers market are less volatile and tend to perform a lot more healthy than other segments within the shipping industry. The charter rates for chemical have seen little movement in the facing of the crisis and have continued to show its resilience against the economic meltdown.
Friday, 24 April 2009
JP Morgan Asset Management is launching a maritime strategy this year which will invest in the distressed shipping market, a senior manager at the firm said on Thursday. "The shipping business is in worse shape than real estate," said Joe Azelby, chief executive officer of JP Morgan Asset Management's $50 billion global real assets group.
"In some cases ship values are down between 60 and 80 percent."Azelby -- who joined the firm after a brief period playing professional American football for the Buffalo Bills -- told Reuters the aim is to acquire vessels from distressed sellers, with operating partners.Ship values are effectively a derivative of the freight income, so prices have tumbled as the global recession has intensified.
The shipping industry uses financing extensively, and Azelby said that a handful of banks have tended to dominate. "But many of these banks are now de facto government-owned in some shape or form."This means shipping owners are in need of third party funding at a time when pricing is at an historic low. Azelby sees continued downward pressure on pricing over the next 12 to 24 months and an opportunity to capitalise on this gap.
JP Morgan is currently in fund-raising mode for the strategy, seeking some $500 million to $750 million initially.UPSIDE POTENTIALAzelby expects to attract interest primarily from institutions, and high net worth individuals, who might be attracted due to the tax characteristics and good cash flow."There is also a lot of optionality in the pricing of vessels, so if the economy comes back, ship prices can move fairly quickly," Azelby explained. "If you can get in at a relatively low price and put the vessels on short term charters, there is potential for a lot of upside."However, this would also depend on the length of the recession, he added.The strategy will focus on the three main types of vessel -- dry bulk carriers, oil tankers and container ships.
Dry bulk carriers transport raw materials such as iron ore, coal, grains, cocoa and timber, and so have been hit hard by the global decline in world trade. Container ships, which carry finished goods, have also been laid up. The strategy will be led by Andy Dacy who headed the shipping practice at JP Morgan's investment bank. "He has an unmatched knowledge of that industry," said Azelby. The aim is to build a team of between six and eight people, with some shared resources on the marketing and financial side.
Source: Reuters
Friday, 24 April 2009
JP Morgan Asset Management is launching a maritime strategy this year which will invest in the distressed shipping market, a senior manager at the firm said on Thursday. "The shipping business is in worse shape than real estate," said Joe Azelby, chief executive officer of JP Morgan Asset Management's $50 billion global real assets group.
"In some cases ship values are down between 60 and 80 percent."Azelby -- who joined the firm after a brief period playing professional American football for the Buffalo Bills -- told Reuters the aim is to acquire vessels from distressed sellers, with operating partners.Ship values are effectively a derivative of the freight income, so prices have tumbled as the global recession has intensified.
The shipping industry uses financing extensively, and Azelby said that a handful of banks have tended to dominate. "But many of these banks are now de facto government-owned in some shape or form."This means shipping owners are in need of third party funding at a time when pricing is at an historic low. Azelby sees continued downward pressure on pricing over the next 12 to 24 months and an opportunity to capitalise on this gap.
JP Morgan is currently in fund-raising mode for the strategy, seeking some $500 million to $750 million initially.UPSIDE POTENTIALAzelby expects to attract interest primarily from institutions, and high net worth individuals, who might be attracted due to the tax characteristics and good cash flow."There is also a lot of optionality in the pricing of vessels, so if the economy comes back, ship prices can move fairly quickly," Azelby explained. "If you can get in at a relatively low price and put the vessels on short term charters, there is potential for a lot of upside."However, this would also depend on the length of the recession, he added.The strategy will focus on the three main types of vessel -- dry bulk carriers, oil tankers and container ships.
Dry bulk carriers transport raw materials such as iron ore, coal, grains, cocoa and timber, and so have been hit hard by the global decline in world trade. Container ships, which carry finished goods, have also been laid up. The strategy will be led by Andy Dacy who headed the shipping practice at JP Morgan's investment bank. "He has an unmatched knowledge of that industry," said Azelby. The aim is to build a team of between six and eight people, with some shared resources on the marketing and financial side.
Source: Reuters
BLT - 2008 Full Annual Report
Dear All,
Please access below link to the above document.
http://rapidshare.com/files/225041640/2009.03.08_PT_BERLIAN_AR2008.pdf
Thank you for your attention.
Regards
Please access below link to the above document.
http://rapidshare.com/files/225041640/2009.03.08_PT_BERLIAN_AR2008.pdf
Thank you for your attention.
Regards
BLT - Merrill Lynch Asian Stars (Non Deal Roadshow)
BLT will participate in the event:
Day/Date: Wednesday, 6th - Friday 8th May 2009
Time: 09.00am - 05.00pm
Venue: Ritz-Carlton, Millenia Singapore
Day/Date: Wednesday, 6th - Friday 8th May 2009
Time: 09.00am - 05.00pm
Venue: Ritz-Carlton, Millenia Singapore
Euronav 1Q 2009 Results & New Financing
Thursday, April 23, 2009, 9:38 AM
The executive committee of Euronav NV (Euronext Brussels: EURN) reported its financial results for the three months ended 31st March 2009. The most important key figures are (in thousands of USD):
first quarter 2009 first quarter 2008
Turnover 128,505 218,004
EBITDA 73,208 154,156
Depreciation -39,005 -36,138
EBIT (operating result) 34,203 118,018
Financial result -17,061 -36,884
Result before tax 17,142 81,134
Tax expense -354 -386
Result for the period 16,788 80,748
Attributable to: equity holders of the Company 16,788 80,748
Minority interest 0 0
Information per share (in USD per share)
first quarter 2009 first quarter 2008
Number of shares 50,000,000 51,750,000
EBITDA 1.46 2.98
EBIT (operating result) 0.68 2.28
Result for the period 0.34 1.56
All figures have been prepared under IFRS (International Financial Reporting Standards) and have not been reviewed by the joint statutory auditors. The figures have been prepared without taking into account any impact of deferred taxes. The company had a net income of $16.8m (first quarter 2008: $80.7m) or $0.34 (first quarter 2008: $1.56) per share, for the first quarter 2009.
EBITDA for the same period was $79m (first quarter 2008: $154.2m). The average daily time charter equivalent rates (TCE) obtained by the company’s fleet in the Tankers International pool was approximately $47,000 per day in the first quarter of 2009 (first quarter 2008: $100,000 per day). The time charter equivalent earnings of the Euronav Suezmax fleet which is fixed on long term time charters, including profit shares when applicable, $38,500 per day (first quarter 2008: $36,600 per day) for the first quarter 2009.
The result is affected by the revaluation at marked-to-market levels of non cash items such as hedge instruments on interest rates for a total of $-3.6m and rate of exchange difference for a total of $1.3m. During the first quarter, Euronav took delivery of the double hulled VLCC Antarctica (2009 – 315,981 dwt) which was put immediately under time charter to Total for a period of just over 6 years.
The company also renewed the time charter contract on the Finesse (149,994 dwt – 2003) with Petrobras for an additional period of 36 months. Euronav will also take delivery of a Newbuilding Suezmax from Samsung Heavy Industries from South-Korea in June. The ship to be named Felicity (hull 1743 – 159,000 dwt) will be operated under time charter contract with Total for a period of up to 30 months.
These contracts further increase the cover ratio of the company. Euronav intends to continue to operate its fleet in a balanced strategy of spot market and long term contracts. Euronav also announced that it has signed a $300m senior secured facility with Nordea, Calyon, Societe Generale, Bank of America and Scotiabank acting as Lead arrangers; Nordea, Calyon and Societe Generale acting as bookrunners and Nordea as sole facility agent. Skandinaviska Enskilda Banken, Dexia Bank, Fortis Bank Belgium and Ethias acting as co-arrangers.
The credit facility will finance two VLCCs: the Olympia (2008 – 315,981) and the Antarctica (2009 – 315,981 dwt) and four Suezmaxes: the Cap Felix (2008 – 158,764 dwt) and the Cap Theodora (2008 – 158,800 dwt) and two newbuilding Suezmaxes: hull 1743, to be named Felicity, (159,000 dwt) and scheduled for delivery in June of this year and hull 1744, to be named Fraternity (159,000 dwt) scheduled for delivery in November of this year.
Following seasonal trends the market has softened significantly in recent weeks but at rates lower than expected. This is due to a lower demand for transportation caused by a reduced demand for crude oil as part of the global economic recession. Management remains cautious over the outlook for the rest of the year. So far in the second quarter, Euronav VLCC fleet operated in the Tankers International pool has earned $37,000/day and 44% of the available days have been fixed.
Source: (www.euronav.com)
The executive committee of Euronav NV (Euronext Brussels: EURN) reported its financial results for the three months ended 31st March 2009. The most important key figures are (in thousands of USD):
first quarter 2009 first quarter 2008
Turnover 128,505 218,004
EBITDA 73,208 154,156
Depreciation -39,005 -36,138
EBIT (operating result) 34,203 118,018
Financial result -17,061 -36,884
Result before tax 17,142 81,134
Tax expense -354 -386
Result for the period 16,788 80,748
Attributable to: equity holders of the Company 16,788 80,748
Minority interest 0 0
Information per share (in USD per share)
first quarter 2009 first quarter 2008
Number of shares 50,000,000 51,750,000
EBITDA 1.46 2.98
EBIT (operating result) 0.68 2.28
Result for the period 0.34 1.56
All figures have been prepared under IFRS (International Financial Reporting Standards) and have not been reviewed by the joint statutory auditors. The figures have been prepared without taking into account any impact of deferred taxes. The company had a net income of $16.8m (first quarter 2008: $80.7m) or $0.34 (first quarter 2008: $1.56) per share, for the first quarter 2009.
EBITDA for the same period was $79m (first quarter 2008: $154.2m). The average daily time charter equivalent rates (TCE) obtained by the company’s fleet in the Tankers International pool was approximately $47,000 per day in the first quarter of 2009 (first quarter 2008: $100,000 per day). The time charter equivalent earnings of the Euronav Suezmax fleet which is fixed on long term time charters, including profit shares when applicable, $38,500 per day (first quarter 2008: $36,600 per day) for the first quarter 2009.
The result is affected by the revaluation at marked-to-market levels of non cash items such as hedge instruments on interest rates for a total of $-3.6m and rate of exchange difference for a total of $1.3m. During the first quarter, Euronav took delivery of the double hulled VLCC Antarctica (2009 – 315,981 dwt) which was put immediately under time charter to Total for a period of just over 6 years.
The company also renewed the time charter contract on the Finesse (149,994 dwt – 2003) with Petrobras for an additional period of 36 months. Euronav will also take delivery of a Newbuilding Suezmax from Samsung Heavy Industries from South-Korea in June. The ship to be named Felicity (hull 1743 – 159,000 dwt) will be operated under time charter contract with Total for a period of up to 30 months.
These contracts further increase the cover ratio of the company. Euronav intends to continue to operate its fleet in a balanced strategy of spot market and long term contracts. Euronav also announced that it has signed a $300m senior secured facility with Nordea, Calyon, Societe Generale, Bank of America and Scotiabank acting as Lead arrangers; Nordea, Calyon and Societe Generale acting as bookrunners and Nordea as sole facility agent. Skandinaviska Enskilda Banken, Dexia Bank, Fortis Bank Belgium and Ethias acting as co-arrangers.
The credit facility will finance two VLCCs: the Olympia (2008 – 315,981) and the Antarctica (2009 – 315,981 dwt) and four Suezmaxes: the Cap Felix (2008 – 158,764 dwt) and the Cap Theodora (2008 – 158,800 dwt) and two newbuilding Suezmaxes: hull 1743, to be named Felicity, (159,000 dwt) and scheduled for delivery in June of this year and hull 1744, to be named Fraternity (159,000 dwt) scheduled for delivery in November of this year.
Following seasonal trends the market has softened significantly in recent weeks but at rates lower than expected. This is due to a lower demand for transportation caused by a reduced demand for crude oil as part of the global economic recession. Management remains cautious over the outlook for the rest of the year. So far in the second quarter, Euronav VLCC fleet operated in the Tankers International pool has earned $37,000/day and 44% of the available days have been fixed.
Source: (www.euronav.com)
BLT - BCP Securities Investor Conference
BLT will participate in the above investor conference at the following:
Day/ Date : Thursday, 23 April 2009
Time : 2.00 - 4.00pm
Venue: Four Seasons Hotel, Jakarta
Day/ Date : Thursday, 23 April 2009
Time : 2.00 - 4.00pm
Venue: Four Seasons Hotel, Jakarta
BLT - Presentation Material Bond Offerings
Dear All,
Please find attached the link for the above document.
Click here to download file
http://rapidshare.com/files/224839761/2009.03.26_Due_Diligence_Meeting_and_Public_Expose_Material_Bond_Offerings.pdf.html
Thank you for your attention.
Regards
Please find attached the link for the above document.
Click here to download file
http://rapidshare.com/files/224839761/2009.03.26_Due_Diligence_Meeting_and_Public_Expose_Material_Bond_Offerings.pdf.html
Thank you for your attention.
Regards
BLT - Media News Secured of Loan from DVB
4/17/2009
Asia Pulse reported that cargo shipping company PT Berlian Laju Tanker Tbk said it has secured a loan pledge of US$27 million from the DVB Group Merchant Bank (Asia) Ltd . Kevin Wong, the finance director of the publicly listed company, said the loan fund would be used to buy new ships.
Source: Asia Pulse
Asia Pulse reported that cargo shipping company PT Berlian Laju Tanker Tbk said it has secured a loan pledge of US$27 million from the DVB Group Merchant Bank (Asia) Ltd . Kevin Wong, the finance director of the publicly listed company, said the loan fund would be used to buy new ships.
Source: Asia Pulse
BLT - Notice on 2009 AGM Resolutions (Bahasa)
Dear All,
Please find the link below to the Notice.
http://rapidshare.com/files/224779979/2009.04.23_BLT_Notice_on_2009_AGM_Resolutions__Bahasa_.pdf
Thank you for your attention.
Regards
Please find the link below to the Notice.
http://rapidshare.com/files/224779979/2009.04.23_BLT_Notice_on_2009_AGM_Resolutions__Bahasa_.pdf
Thank you for your attention.
Regards
BLT - Notice on 2009 AGM Resolutions (English)
Dear All,
Please find the link below for the above file.
http://rapidshare.com/files/224769074/2009.04.23_BLT_Notice_on_AGM_Resolutions.pdf
Thank you for your attention.
Regards
Please find the link below for the above file.
http://rapidshare.com/files/224769074/2009.04.23_BLT_Notice_on_AGM_Resolutions.pdf
Thank you for your attention.
Regards
Tuesday 21 April 2009
BLT - More Media News
Please refer below on more BLT media news.
http://rapidshare.com/files/224064176/2009.04.20_Bisnis_Indonesia_on_BLT.pdf
Thank you for your attention.
http://rapidshare.com/files/224064176/2009.04.20_Bisnis_Indonesia_on_BLT.pdf
Thank you for your attention.
A Never Ending Tale of Pirates
Please refer to below link on some highlights on Pirates issues.
http://rapidshare.com/files/224055584/2009.04.20_A_Never_Ending_Tale_of_Pirates.doc
The never ending tale of the piracy to many people has got more minuses. Yes on one hand, it has increased the insurance cost but on the other hand, which is a lot more prevalent and affect more significantly is the creation of ton mile expansion across the chemical tanker industry as more and more charterers prefer the ships to travel in safer route which by far a lot farther than the Gulf of Aden route.
http://rapidshare.com/files/224055584/2009.04.20_A_Never_Ending_Tale_of_Pirates.doc
The never ending tale of the piracy to many people has got more minuses. Yes on one hand, it has increased the insurance cost but on the other hand, which is a lot more prevalent and affect more significantly is the creation of ton mile expansion across the chemical tanker industry as more and more charterers prefer the ships to travel in safer route which by far a lot farther than the Gulf of Aden route.
Sunday 19 April 2009
Eitzen group cancels newbuildings
(Apr 9 2009)
Both Eitzen Chemical and Camillo Eitzen (CECO) have cancelled newbuilding orders in a bid to reschedule debt.
Eitzen Chemical said that by cancelling orders for five 12,000 dwt stainless steel chemical tankers, the company would reduce its remaining newbuilding programme by $175 mill. At the same time, the company said that it had started discussions with its lenders to restructure part of its debt.
As a result of the cancellation, Eitzen Chemical will compensate the yard – Sasaki Kinoe - by releasing the deposit of $7.5 mill and said it will pay a further cancellation fee of $7.5 mill by 30th November this year, on condition that the company can provide satisfactory security to the yard for the cancellation fee.
By taking this action, Eitzen Chemical said that it will record a loss of about $10 mill.
The company also said that the delivery of the ’Sichem Osprey’, a 25,000 dwt, coated IMO II type, at Dae Sun on 7th April, concluded its South Korean newbuilding programme.
Both Eitzen concerns said that they had initiated discussions with their lenders to amend the debt repayment schedule and to adjust the covenant structure, to better fit today's market environment.
Eitzen Chemical ceo Terje Askvig explained: "We expect continued challenging market conditions following the financial crisis. It is therefore important for us to improve the cash flow situation by reducing the capital expenditure programme and seek to agree with our lenders reductions in principal repayments. With this restructuring plan in place, we will be better positioned to meet the challenging market conditions that lie ahead."
As for CECO, it had also reached an agreement with the same Japanese yard to cancel six 2,500 cu m gas carrier newbuildings, against a final and total settlement of $2.5 mill.
By cancelling the newbuildings, the company said that it would save $105 mill on its existing newbuilding commitments, which would be reduced to zero.
Source: Tanker Operator
Both Eitzen Chemical and Camillo Eitzen (CECO) have cancelled newbuilding orders in a bid to reschedule debt.
Eitzen Chemical said that by cancelling orders for five 12,000 dwt stainless steel chemical tankers, the company would reduce its remaining newbuilding programme by $175 mill. At the same time, the company said that it had started discussions with its lenders to restructure part of its debt.
As a result of the cancellation, Eitzen Chemical will compensate the yard – Sasaki Kinoe - by releasing the deposit of $7.5 mill and said it will pay a further cancellation fee of $7.5 mill by 30th November this year, on condition that the company can provide satisfactory security to the yard for the cancellation fee.
By taking this action, Eitzen Chemical said that it will record a loss of about $10 mill.
The company also said that the delivery of the ’Sichem Osprey’, a 25,000 dwt, coated IMO II type, at Dae Sun on 7th April, concluded its South Korean newbuilding programme.
Both Eitzen concerns said that they had initiated discussions with their lenders to amend the debt repayment schedule and to adjust the covenant structure, to better fit today's market environment.
Eitzen Chemical ceo Terje Askvig explained: "We expect continued challenging market conditions following the financial crisis. It is therefore important for us to improve the cash flow situation by reducing the capital expenditure programme and seek to agree with our lenders reductions in principal repayments. With this restructuring plan in place, we will be better positioned to meet the challenging market conditions that lie ahead."
As for CECO, it had also reached an agreement with the same Japanese yard to cancel six 2,500 cu m gas carrier newbuildings, against a final and total settlement of $2.5 mill.
By cancelling the newbuildings, the company said that it would save $105 mill on its existing newbuilding commitments, which would be reduced to zero.
Source: Tanker Operator
Gulf Nav - Delivery of "Gulf Jalmuda"
New built chemical tanker “Gulf Jalmuda” joins Gulf Navigation Holding’s fleet
Posted: 25-03-2009 , 19:37 GMT
Gulf Navigation Holding PJSC (DFM: GULFNAV), has announced that it has taken delivery of the Gulf Jalmuda a newly built tanker constructed at the Hyundai Mipo Dockyard in Ulsan, South Korea.
The Gulf Jalmuda has been officially inaugurated during a ceremony that took place yesterday at jebel Ali Port and was attended by the company’s Board of directors, stakeholders and VIP guests.
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The vessel is the last in a series of four sophisticated chemical carriers ordered by Gulf Navigation Holding PJSC. With deadweight of 45,951 metric tonnes, a capacity of 54,300 cubic metres, 22 specially coated cargo tanks and classed as an IMO Type II chemical carrier she will have the capability of carrying a broad range of petrochemical products. “Gulf Jalmuda” has been built to meet the highest standards of the industry, the environment and Maritime safety.
The vessel will later be delivered to International Shipping Company, a subsidiary of The Saudi Basic Industries Corporation (SABIC) on a fifteen year time charter. The “Gulf Jalmuda” is the last of four vessels all chartered to SABIC for fifteen years.
Commenting on their latest vessel acquisition, Engineer Abdullah Al Shuraim, Chairman, Gulf Navigation Holding PJSC, noted that the vessel was contracted to meet the robust demand for such tankers and would add to the revenue and flexibility of the company and reaffirms the company’s position as a regional leader in shipping and marine services in particularly during the current tough economic circumstances.
He went on to say: “The current financial crisis has had serious impact on all business sectors in the first quarter of this year, but effective from the second half of 2009 we do expect demand returning to levels that will bring more profits for the sector and better chartering hires. We also believe that the oil and chemical tankers will continue to operate better than other shipping sectors and will remain the healthiest sector.”
“GulfNav will continue its strategy of growth backed with high liquidity, good record with the international and local banks and blue-chip customers, once the price of vessels reach reasonable level through purchasing tankers under construction, second hand ships and acquisition of shipping companies.
Mr. Mohammed Al Muallem Senior Vice President and Managing Director DP World, UAE region Said: “DP World’s flagship port of Jebel Ali is honoured to host the maiden call of the “Gulf Jalmuda”, a technologically advanced addition to the fleet of yet another leading Dubai maritime establishment, Gulf Navigation Holding. This is an example of the kind of service partnership that will guard Dubai’s advantages as the region’s maritime and logistics hub for many years to come.”
The vessel was financed by Fortis Bank one of the worlds’s leading ship finance and banking institutions.
Gulf Navigation Holding PJSC group companies and divisions own and operate crude, BROBOS and chemical tankers. Gulf Navigation Holding is an ISO 9001:2000 certified Dubai-based company and a leading shipping and marine services company in the region. It is a United Arab Emirates holding entity with operations worldwide and 11 specialised subsidiaries. It is also the sole agency for a large number of global marine manufacturersand the only company listed on the Dubai financial market as a maritime and shipping company.
© 2009 Al Bawaba (www.albawaba.com)
Posted: 25-03-2009 , 19:37 GMT
Gulf Navigation Holding PJSC (DFM: GULFNAV), has announced that it has taken delivery of the Gulf Jalmuda a newly built tanker constructed at the Hyundai Mipo Dockyard in Ulsan, South Korea.
The Gulf Jalmuda has been officially inaugurated during a ceremony that took place yesterday at jebel Ali Port and was attended by the company’s Board of directors, stakeholders and VIP guests.
document.write('');
The vessel is the last in a series of four sophisticated chemical carriers ordered by Gulf Navigation Holding PJSC. With deadweight of 45,951 metric tonnes, a capacity of 54,300 cubic metres, 22 specially coated cargo tanks and classed as an IMO Type II chemical carrier she will have the capability of carrying a broad range of petrochemical products. “Gulf Jalmuda” has been built to meet the highest standards of the industry, the environment and Maritime safety.
The vessel will later be delivered to International Shipping Company, a subsidiary of The Saudi Basic Industries Corporation (SABIC) on a fifteen year time charter. The “Gulf Jalmuda” is the last of four vessels all chartered to SABIC for fifteen years.
Commenting on their latest vessel acquisition, Engineer Abdullah Al Shuraim, Chairman, Gulf Navigation Holding PJSC, noted that the vessel was contracted to meet the robust demand for such tankers and would add to the revenue and flexibility of the company and reaffirms the company’s position as a regional leader in shipping and marine services in particularly during the current tough economic circumstances.
He went on to say: “The current financial crisis has had serious impact on all business sectors in the first quarter of this year, but effective from the second half of 2009 we do expect demand returning to levels that will bring more profits for the sector and better chartering hires. We also believe that the oil and chemical tankers will continue to operate better than other shipping sectors and will remain the healthiest sector.”
“GulfNav will continue its strategy of growth backed with high liquidity, good record with the international and local banks and blue-chip customers, once the price of vessels reach reasonable level through purchasing tankers under construction, second hand ships and acquisition of shipping companies.
Mr. Mohammed Al Muallem Senior Vice President and Managing Director DP World, UAE region Said: “DP World’s flagship port of Jebel Ali is honoured to host the maiden call of the “Gulf Jalmuda”, a technologically advanced addition to the fleet of yet another leading Dubai maritime establishment, Gulf Navigation Holding. This is an example of the kind of service partnership that will guard Dubai’s advantages as the region’s maritime and logistics hub for many years to come.”
The vessel was financed by Fortis Bank one of the worlds’s leading ship finance and banking institutions.
Gulf Navigation Holding PJSC group companies and divisions own and operate crude, BROBOS and chemical tankers. Gulf Navigation Holding is an ISO 9001:2000 certified Dubai-based company and a leading shipping and marine services company in the region. It is a United Arab Emirates holding entity with operations worldwide and 11 specialised subsidiaries. It is also the sole agency for a large number of global marine manufacturersand the only company listed on the Dubai financial market as a maritime and shipping company.
© 2009 Al Bawaba (www.albawaba.com)
Chemical Tanker - Why Use Stainless Steel (from Shipyard Perspective)
Chemical tankers are the multitasking force among the international cargo fleet. They are expected to alternate flexibly between cargoes as incompatible as inorganic acids and edible oils.
Today’s trends in chemical-tanker ownership and operation models further enhance needs to switch smoothly from one kind of cargo to another: shipowners can lease their tankers for up to five years, with little knowledge or control over the cargoes the tankers may carry.
Stainless steel is the unbeatable material for chemical-tanker compartments to make the switches easy and safe. Stainless can best withstand the test of abrasive and corrosive washing with high-pressure water jets and hot seawater between unloading and reloading, to avoid cross-contamination – the highly unwelcome incident where residues of the previous cargo are mixed with the next. Cross-contamination can be fought further by polishing the stainless surfaces to smooth 2.2 micron finish.
Source: Shipyard Ottokumpu
Why stainless, why duplex 2205 for chemical tankers
Stainless chemical tanker compartments
The chemical tanker emerged in the 1960s as chemicals trading was expanding rapidly throughout the world.
Chemical tankers differ from oil tankers in technical sophistication. With many separate compartments integrated into the hull, they are more robust, largely owing to the subdivision created by the bulkheads between cargo tanks. The cargoes are usually of high value (worth up to millions of dollars) and range from hazardous and noxious chemicals to liquids for human consumption.
Well over a thousand stainless steel chemical tankers sail the seas today, and one out of four new chemical tankers are stainless. Of all commercially transported chemicals, amounting to thousands, only about a dozen require some other material than stainless, while international regulations prescribe that a high number must be transported in stainless compartments.
A number of facts speak for stainless in chemical tankers. The efficient and fast washing between cargoes enabled by stainless compartments not only protects valuable cargoes the best against cross-contamination, stainless also ensures that the tanker (a multi-million dollar investment) can be quickly turned around at the dock, maximizing sea time. Less than ten percent of all stainless chemical tankers built since the 1960s have been scrapped, proving that they retain their value for decades. There is no need to make provisions for material loss over time.
While fairly high-alloyed grades of stainless are recommended for chemical tankers, to allow for the harshest chemicals, the trend in new tankers is increasingly towards grade 2205 (1.4462) duplex stainless steel (3.1% molybdenum for high corrosion resistance).
Duplex 2205 has been used in well over 200 tankers to date, and it is obvious that this grade will dominate in the future due to its many advantages. A major advantage with the duplex grade is its high strength, which enables considerable plate thickness reduction and, as a result, both materials savings and higher payloads.
Today’s trends in chemical-tanker ownership and operation models further enhance needs to switch smoothly from one kind of cargo to another: shipowners can lease their tankers for up to five years, with little knowledge or control over the cargoes the tankers may carry.
Stainless steel is the unbeatable material for chemical-tanker compartments to make the switches easy and safe. Stainless can best withstand the test of abrasive and corrosive washing with high-pressure water jets and hot seawater between unloading and reloading, to avoid cross-contamination – the highly unwelcome incident where residues of the previous cargo are mixed with the next. Cross-contamination can be fought further by polishing the stainless surfaces to smooth 2.2 micron finish.
Source: Shipyard Ottokumpu
Why stainless, why duplex 2205 for chemical tankers
Stainless chemical tanker compartments
The chemical tanker emerged in the 1960s as chemicals trading was expanding rapidly throughout the world.
Chemical tankers differ from oil tankers in technical sophistication. With many separate compartments integrated into the hull, they are more robust, largely owing to the subdivision created by the bulkheads between cargo tanks. The cargoes are usually of high value (worth up to millions of dollars) and range from hazardous and noxious chemicals to liquids for human consumption.
Well over a thousand stainless steel chemical tankers sail the seas today, and one out of four new chemical tankers are stainless. Of all commercially transported chemicals, amounting to thousands, only about a dozen require some other material than stainless, while international regulations prescribe that a high number must be transported in stainless compartments.
A number of facts speak for stainless in chemical tankers. The efficient and fast washing between cargoes enabled by stainless compartments not only protects valuable cargoes the best against cross-contamination, stainless also ensures that the tanker (a multi-million dollar investment) can be quickly turned around at the dock, maximizing sea time. Less than ten percent of all stainless chemical tankers built since the 1960s have been scrapped, proving that they retain their value for decades. There is no need to make provisions for material loss over time.
While fairly high-alloyed grades of stainless are recommended for chemical tankers, to allow for the harshest chemicals, the trend in new tankers is increasingly towards grade 2205 (1.4462) duplex stainless steel (3.1% molybdenum for high corrosion resistance).
Duplex 2205 has been used in well over 200 tankers to date, and it is obvious that this grade will dominate in the future due to its many advantages. A major advantage with the duplex grade is its high strength, which enables considerable plate thickness reduction and, as a result, both materials savings and higher payloads.
Friday 17 April 2009
Hellespont launches chemical tanker pool
(Apr 16 2009)
Hamburg-based Hellespont has also launched a pool for smaller IMO II type chemical/product tankers. The Seatramp Intermediate Tanker Pool will initially consist of three KG-financed and Hellespont-operated 13,000 dwt vessels.
Hellespont has committed a further eight 17,000 dwt newbuildings, due between now and 2011 to the pool.
Talks with other owners are at an advanced stage and the aim is to bring the pool to around 30 vessels by the end of 2010.
Christian Freiherr van Oldershausen, managing director of Hellespont AG, said, “In the current market consolidation of fleets into pools makes a lot of sense. It smoothes earnings, allows the pool to develop long term relationships with large charterers and balance tonnage against cargo commitments and overall increases returns as tonnage utilisation rises.
"Our KG investors want us to take commercial control of our ships, hence the pool format, which will be strengthened when we expand with other independent owners,” he concluded.
The pool has been set up for IMO II chemical/product tankers built post-2000 of between 10,000 and 20,000 dwt. It will be operated from Hamburg by Hellespont Tankers Gmbh and pool vessels will trade worldwide.
Hellespont currently operates 17 modern crude, product and chemical tankers and two platform supply vessels and has a further four PSV vessels and eight 17,000 dwt chemical carriers on order with delivery dates through 2011.
The company has had previously experience in pooling arrangements as in the past it commercially managed the Seatramp Tankers pool and the Probulk pool.
Hamburg-based Hellespont has also launched a pool for smaller IMO II type chemical/product tankers. The Seatramp Intermediate Tanker Pool will initially consist of three KG-financed and Hellespont-operated 13,000 dwt vessels.
Hellespont has committed a further eight 17,000 dwt newbuildings, due between now and 2011 to the pool.
Talks with other owners are at an advanced stage and the aim is to bring the pool to around 30 vessels by the end of 2010.
Christian Freiherr van Oldershausen, managing director of Hellespont AG, said, “In the current market consolidation of fleets into pools makes a lot of sense. It smoothes earnings, allows the pool to develop long term relationships with large charterers and balance tonnage against cargo commitments and overall increases returns as tonnage utilisation rises.
"Our KG investors want us to take commercial control of our ships, hence the pool format, which will be strengthened when we expand with other independent owners,” he concluded.
The pool has been set up for IMO II chemical/product tankers built post-2000 of between 10,000 and 20,000 dwt. It will be operated from Hamburg by Hellespont Tankers Gmbh and pool vessels will trade worldwide.
Hellespont currently operates 17 modern crude, product and chemical tankers and two platform supply vessels and has a further four PSV vessels and eight 17,000 dwt chemical carriers on order with delivery dates through 2011.
The company has had previously experience in pooling arrangements as in the past it commercially managed the Seatramp Tankers pool and the Probulk pool.
OSG, TEN and Teekay Corp downgraded
Friday, 17 April 2009
J.P. Morgan has joined a rising chorus of investment banks downgrading share ratings and share price targets for tanker operators. J.P. Morgan is forecasting “a weak tanker rate environment through the third quarter” which “would likely hurt the companies' near-term earnings potential”, Reuters reported. Tsakos Energy Navigation (TEN) has been downgraded from 'neutral' to 'underweight' while Overseas Shipholding Group, Inc (OSG) and Teekay Corporation have been downgraded from 'neutral' to 'overweight'.
Share price targets for TEN, OSG and Teekay Corp were cut from $18 to $14 per share, $45 to $27 per share and $21 to $15 per share respectively. According to J P Morgan analyst Johnathan Chappell, the “massively over-tonnaged” spot market has pushed rates across the board down to around and below break-even rates.Chappell was quoted saying that “a reversal of this rate pressure appeared unlikely in the short term.”He added that asset prices may be the 'next shoe to drop', hurting equity valuations and even potentially leading to some debt covenant breaches.“In addition to the lower earnings and cash flows that will likely result from plummeting spot rates, tanker asset values, estimated to be down 25% to 33% already from summer highs, may face further near-term declines as return expectations are adjusted downward,” he said.
Aside from J P Morgan, Danish investment bank and brokerage Carnegie has cut its share rating for fellow Danish tanker operator TORM from 'neutral' to 'under-perform'.According to Carnegie, tanker rates have now dropped below operating expenses. New York-headquartered investment bank Dahlman Rose & Company, LLC also revised its share ratings and share price targets for several tanker operators downwards earlier this week.
Dahlman Rose analyst Omar Nokta downgraded DHT Maritime Inc. from 'buy' to 'hold' on a dividend cut expectation in the second quarter of this year and a fall in the company's revenues from its partnership with Overseas Shipholding Group Inc (OSG) on the back of slumping spot rates. Omega Navigation Enterprises, Inc.'s rating has been slashed from 'hold' to 'sell' due to falling profits as about half of its product tanker fleet exited charters mid last year and suffered slumping spot rates in the product tanker segments. Nokta was quoted saying that “the recent fall in asset values has pushed the market value of Omega's products tanker fleet much closer to its outstanding debt and accordingly we believe it is near breach of its loan covenants." Share price targets for Ship Finance International, Teekay Tankers Ltd. and General Maritime Corporation were cut from $20 to $15 per share, $14 to $12 per share and $13 to $10 per share respectively.
Source: TankerWorld
J.P. Morgan has joined a rising chorus of investment banks downgrading share ratings and share price targets for tanker operators. J.P. Morgan is forecasting “a weak tanker rate environment through the third quarter” which “would likely hurt the companies' near-term earnings potential”, Reuters reported. Tsakos Energy Navigation (TEN) has been downgraded from 'neutral' to 'underweight' while Overseas Shipholding Group, Inc (OSG) and Teekay Corporation have been downgraded from 'neutral' to 'overweight'.
Share price targets for TEN, OSG and Teekay Corp were cut from $18 to $14 per share, $45 to $27 per share and $21 to $15 per share respectively. According to J P Morgan analyst Johnathan Chappell, the “massively over-tonnaged” spot market has pushed rates across the board down to around and below break-even rates.Chappell was quoted saying that “a reversal of this rate pressure appeared unlikely in the short term.”He added that asset prices may be the 'next shoe to drop', hurting equity valuations and even potentially leading to some debt covenant breaches.“In addition to the lower earnings and cash flows that will likely result from plummeting spot rates, tanker asset values, estimated to be down 25% to 33% already from summer highs, may face further near-term declines as return expectations are adjusted downward,” he said.
Aside from J P Morgan, Danish investment bank and brokerage Carnegie has cut its share rating for fellow Danish tanker operator TORM from 'neutral' to 'under-perform'.According to Carnegie, tanker rates have now dropped below operating expenses. New York-headquartered investment bank Dahlman Rose & Company, LLC also revised its share ratings and share price targets for several tanker operators downwards earlier this week.
Dahlman Rose analyst Omar Nokta downgraded DHT Maritime Inc. from 'buy' to 'hold' on a dividend cut expectation in the second quarter of this year and a fall in the company's revenues from its partnership with Overseas Shipholding Group Inc (OSG) on the back of slumping spot rates. Omega Navigation Enterprises, Inc.'s rating has been slashed from 'hold' to 'sell' due to falling profits as about half of its product tanker fleet exited charters mid last year and suffered slumping spot rates in the product tanker segments. Nokta was quoted saying that “the recent fall in asset values has pushed the market value of Omega's products tanker fleet much closer to its outstanding debt and accordingly we believe it is near breach of its loan covenants." Share price targets for Ship Finance International, Teekay Tankers Ltd. and General Maritime Corporation were cut from $20 to $15 per share, $14 to $12 per share and $13 to $10 per share respectively.
Source: TankerWorld
Thursday 16 April 2009
Analysts Report - Double dipping in 2010
Andy Xie
April 11, 2009
At the beginning of 2009, I wrote that the global economy would stabilize in the second half and a bear market rally could start in the second quarter of 2009. I thought that stagflation would be the dominant characteristic for the next few years. I am still sticking to the story.
The bear market rally began earlier than I expected. The reason was that major governments have been introducing subsidies for speculation.
They believe that the main problems are liquidity and confidence.
Hence, if investors or speculators are brought back in the game, the world economy could be back to a virtuous cycle again. I think that this type of approach would lead to a second dip in 2010
Subsidizing risk taking does inflate asset prices, mainly stocks for now.
However, the hope that rising stock prices will lead to economic revival will not be fulfilled. We are in the middle of a debt bubble bursting.
Rising asset prices lift economy through boosting borrowing for investment and consumption. As the current levels of indebtedness are already too high, we won't see rising debt demand for consumption or investment. When the dream of a quick economic recovery is dashed, stock prices will slump again, which could expose more problems in the financial system and trigger a second dip in the global economy.
The world is amidst a burst after a speculative boom. Boom-burst cycle is quite frequent in history (see 'Manias, Panics, and Crashes: A History of Financial Crises' by Charles Kindleburger). A synchronized global one is rare. The last one comparable to the current one was the boom-burst of 1920s and 30s. A synchronized global cycle requires trade and cross-border capital flow to be large. A synchronized global burst is difficult to overcome, because devaluation and export promotion no longer work. If one country has a burst, it can devalue, boost exports, and make money from foreigners to reflate its financial system. East Asia came back this way from its banking crisis ten years ago.
Policymakers are frustrated that their stimuli are not working so far.
The US government and the Federal Reserve have spent or committed $12 trillion to bail out its financial system. Its budgeted fiscal deficit for 2009 is $1.75 trillion (12% 0f GDP) but will probably surpass $2 trillion. ECB, Bank of England, and Bank of Japan have all cut interest rates to historical lows. Their governments are already running high fiscal deficits. But, employment, business confidence, and consumer confidence continue to deteriorate around the world. Major economies probably suffered similar contraction in the first quarter of 2009 as in the last quarter of 2008. For the whole year of 2009, euro zone, the UK , and the US may contract by 4-5%. Germany and Japan could contract by 7-8%.
This sort of global economic collapse is unprecedented. Moreover, it is difficult to see how the world would grow again when the collapse is over.
If history is guidance, political crisis tends to follow such an economic collapse. When an economic crisis triggers a political one, it makes a quick economic recovery virtually impossible. Out of desperation, governments are trying to support asset prices either directly or incentivizing reluctant speculators to play. Without understanding what governments are doing, most people think that things are either getting better or well soon. After all, shouldn't stock prices tell us about the future, according to theory (Unfortunately not true in practice when you really need it)? The positive thinking is leading many to chase this market. This is a bear rally that will swallow many smart investors.
This phase of government policy-targeting asset prices began with the Fed's announcement for buying up to $1.15 trillion of treasuries, commercial and mortgage papers. It was targeting mortgage interest rate in order to stabilize property price. However, this sort of policy meant that the Fed knew what property price should be. The US property price was 100% overvalued relative to income. After the bubble burst, it should go back.
What the Fed is doing is to slow the adjustment and shift a big chunk of the adjustment through general inflation rather than property price decline. What the Fed is doing will impact the dollar for years to come.
The second part came with the Geithner plan for stripping toxic assets from the US 's troubled banks. Hank Paulson, Tim Geithner's predecessor, wanted to focus on stripping the bad assets off the banks too. His plan didn't fly because the market prices for the bad assets were too low for the banks to survive. Most banks have questionable assets more than twice their equity capital. As these assets are trading at 30 cents on the dollar, if the toxic assets are sold at market price, most banks are bankrupt. This is why Hank Paulson shifted to injecting money directly into the banks first. The hope was that it would stabilize the financial system and the toxic asset prices would rise sufficiently for the banks to survive. This hasn't happened.
The Geithner Plan tries to boost the prices of toxic assets by subsidizing speculation. The centerpiece of the plan was offering government-guaranteed 6-1 leverage. If an investor risks one dollar, the plan caps his loss at one 1 but offers the reward equivalent to risking 7.
The current toxic asset price is 30 cents on the dollar. The price reflects the expected return on the bad asset. It is equivalent to 70% chance of bankruptcy and total wipeout for creditors and 30% chance of survival for the borrowers that support the assets. Under the Geithner Plan, an investor that puts down one dollar can buy $7 worth of toxic assets. At the current price of 30 cents on the dollar, he could buy $23.3 of toxic assets. There is 30% chance that the investor gets $23.3 and, after paying off $6 of debt, and has $ 16.3 in income. There is 70% that he loses everything. Hence, his expected income for his $1 investment is $16.3*0.3=$4.9.
This plan should have boosted demand for toxic assets tremendously.
Indeed, based on the simple example above, investors should be willing to pay more than twice the current price. This would save the banks.
For the investors in toxic assets, they reap rewards from the 30% of the performing asset bundles that they have bought and leave the 70% non performing ones to the taxpayers. This 'beautiful plan' works by robbing taxpayers. But, the prices for toxic assets have not risen that much. Why? I think that the market doesn't think that the plan could work. The public opinions may torpedo it before it goes into implementation. If it goes ahead, the US Congress may pass retroactive laws to confiscate the profits from the investors who participate in this scheme. Essentially, the Geithner Plan is giving speculators free money. But they are not taking it because they are terrified of the consequences.
The third piece is changing the mark-to-market rule. The Financial Accounting Standards Board of the US has changed its rule for accounting asset value. It now allows financial institutions to value their assets according to their 'judgment' rather than market price if they think that the market isn't working. Market may not value asset prices perfectly.
But, who could do better? This rule change is to allow the banks in trouble to stop reporting losses from asset quality deterioration.
When this change happened, the share prices of the troubled banks rose sharply. The market was not just reacting to a superficial change. The change is meaningful for the share prices. If the banks can name their prices for the assets on their books, they don't have to raise capital to stay in business. This means that they might make enough money over time to recapitalize. Hence, the risk of their bankruptcy has declined.
The increased survival chance has boosted their share prices.
Shouldn't this be a good thing that banks don't go burst? Not necessarily so. Look at what happened in Japan . Its banks essentially didn't report their losses and tried to make money to recapitalize. It kept the economy down for ten years without succeeding in their getting out of capital shortfall. The reality won't change with a change in the accounting rule.
These banks know they don't have enough capital. Hence, they won't increase lending and will try to milk their existing assets for profits to recapitalize. They will be a drag on the economy for years to come.
The US seems to be copying from Japan .
In addition to the US 's policies for targeting asset prices, most other major economies are encouraging their banks to lend. What does 'encouraging' mean? Banks normally lend to maximize profits by balancing between risk and reward. When governments encourage them to lend, it really means pressuring banks to lower standards, i.e., taking on more risk for the same or less reward. This sort of policy is really to exchange non-performing loans in future for boosting demand today.
The argument in favor such an approach is that, if every bank lends, the economy improves, which would decrease non-performing assets. This sort of 'free lunch'
thinking works temporarily by inflating another bubble. Of course, it will create a bigger mess in future. Reflating an asset bubble to support the economy is widely hoped for by distressed investors around the world. Policymakers, in addition to their concerns for economic weakness and political stability, are responding to investors' cry for help. This is why we are seeing so many policies that are pumping air into a deflating bubble. It seems the air-pumping is working now. But, it won't last. As governments throw everything at it, more air is going in than coming out. But, government actions can't put in air on a sustainable basis. The air leakage will last with rising unemployment, falling corporate profits, and collapsing trade.
I think that the air leakage will overwhelm government air pumping in 2010.
Another major dip in asset prices is likely. Further, I think that inflation will become a problem, which would cause treasuries and other government bonds to drop. Government bonds are the last bubble to burst.
Other asset prices will bottom when this bubble deflates. This force will reverse all the air that governments are putting in now. The global economy would have a second dip then.
The debate over inflation or deflation has been raging on. The low bond yield suggests that the consensus is for deflation. In September 2006 at the IMF-World Bank annual meeting in Singapore I predicted a financial crisis in 2007, economic crisis in 2008, and stagflation beyond.
The last prediction has not happened yet. What governments and central banks are doing have strengthened my conviction that stagflation will haunt the global economy for years to come.
Historically, the burst following a speculative boom is deflationary for two reasons. First, a speculative boom is investment biased. Hence, there is overcapacity during the burst, as the demand during the boom was exaggerated. Second, bankruptcies of banks and production businesses drive up unemployment, which decreases demand and pushes more businesses into bankruptcies. This vicious cycle prolongs price decline.
The current burst won't lead to sustained deflation for two reasons.
First, the speculation was centered on unproductive assets like property and financial product. Automobile and electronics are two global industries with considerable overcapacity. The automobile industry has had overcapacity for a long time. The problem was covered up by the credit bubble that exaggerated demand, as buyers were incentivized to change cars more frequently with zero down-and-zero interest rate financing. The deflationary pressure would end with the bankruptcy of one or two major producers. The deflation would last if governments prop up their auto companies with taxpayers' money. At least the Obama government has shown unwillingness to do so.
The electronics industry is used to deflation. It is usually good deflation-rising productivity supporting declining price from that industry. What's going on now is not good deflation. The drastic cuts of capital expenditure by global companies have caused a demand collapse for IT products. The pressure is causing the industry to cut back quickly.
This industry is shrinking without government prodding. The bad deflation in this industry will end quickly with capacity reduction.
China's manufacturing expansion is also a source of overcapacity. When the Asian Financial Crisis depressed demand one decade ago, I thought China 's overcapacity was deflationary, because manufacturers in other countries would have match Chinese prices. Now is different.
Manufacturing prices are Chinese. Manufacturing value added has shrunk dramatically relative to the costs of raw materials. The manufacturing capacity in China is unlikely to sustain deflation. For example, three quarters of the cost for steel production are raw materials like iron ore and coking coal. The overcapacity in steel production can't sustain price decline of steel product.
Second, the vicious cycle between bankruptcy, especially banks, and demand contraction is unlikely now. Governments and central banks are propping up virtually every bank in the world. They are lending to industries to keep them afloat. The current dynamic suggests that a bottom for the global economy would be reached soon. As mentioned above, I thought it would be the first half of 2009. Now, with a second a second dip forecast, it would be likely in 2010.
Despite demand weakness, inflation could emerge through commodity inflation and labor unions pushing wage increase, the same factors in the 1970s.
Commodity inflation is already visible as investors who are frightened of monetary expansion seek safe haven. Oil is back above $50/barrel despite demand collapse because so much money has flowed into exchange traded funds that buy oil. As central banks keep printing money, more and more money will flow into commodities.
I always believe that labor union is mostly demand driven. During prosperity labor unions are weak as a rising tide lifts everyone's living standard. When hard time hits, more people support union activism. During economic stagnation, especially stagflation, without union power, average workers will see declining living standard. The national strikes in France and other European countries are a harbinger for what could come.
I have argued above for a second dip in 2010 and stagflation beyond. I want to add some comments on the nature of bear market rallies. In a structural bear market that lasts for years stock markets can have big bounces from time to time. These bounces can be as big as 40% from bottom to top. Obviously, rallies of such size are mouthwatering. It is difficult for investors to stay on the side line. I am not against playing such bear rallies. But, one must remember that bear rallies are at best zero-sum games and often negative-sum games, i.e., making new lows after each bounce. One's profit is someone else's loss. Timing is everything in playing bear bounces. Getting in and out early are the basic principles.
The most harmful behavior is chasing. After a rally of 30% has happened, it is very bad for your financial health to chase.
The last structural bear market happened in the 1970s and lasted for ten years. It is obviously difficult for investors to stay on the sideline for a decade. After all, how long does one live? This is why a structural bear market swallows more and more people through such rallies. The ones that jump in later tend to be more patient and probably smarter. The last ones that perish in a structural bear market may have IQ over 200. I am afraid that the current bear market won't end until it brings down Warren Buffett.
April 11, 2009
At the beginning of 2009, I wrote that the global economy would stabilize in the second half and a bear market rally could start in the second quarter of 2009. I thought that stagflation would be the dominant characteristic for the next few years. I am still sticking to the story.
The bear market rally began earlier than I expected. The reason was that major governments have been introducing subsidies for speculation.
They believe that the main problems are liquidity and confidence.
Hence, if investors or speculators are brought back in the game, the world economy could be back to a virtuous cycle again. I think that this type of approach would lead to a second dip in 2010
Subsidizing risk taking does inflate asset prices, mainly stocks for now.
However, the hope that rising stock prices will lead to economic revival will not be fulfilled. We are in the middle of a debt bubble bursting.
Rising asset prices lift economy through boosting borrowing for investment and consumption. As the current levels of indebtedness are already too high, we won't see rising debt demand for consumption or investment. When the dream of a quick economic recovery is dashed, stock prices will slump again, which could expose more problems in the financial system and trigger a second dip in the global economy.
The world is amidst a burst after a speculative boom. Boom-burst cycle is quite frequent in history (see 'Manias, Panics, and Crashes: A History of Financial Crises' by Charles Kindleburger). A synchronized global one is rare. The last one comparable to the current one was the boom-burst of 1920s and 30s. A synchronized global cycle requires trade and cross-border capital flow to be large. A synchronized global burst is difficult to overcome, because devaluation and export promotion no longer work. If one country has a burst, it can devalue, boost exports, and make money from foreigners to reflate its financial system. East Asia came back this way from its banking crisis ten years ago.
Policymakers are frustrated that their stimuli are not working so far.
The US government and the Federal Reserve have spent or committed $12 trillion to bail out its financial system. Its budgeted fiscal deficit for 2009 is $1.75 trillion (12% 0f GDP) but will probably surpass $2 trillion. ECB, Bank of England, and Bank of Japan have all cut interest rates to historical lows. Their governments are already running high fiscal deficits. But, employment, business confidence, and consumer confidence continue to deteriorate around the world. Major economies probably suffered similar contraction in the first quarter of 2009 as in the last quarter of 2008. For the whole year of 2009, euro zone, the UK , and the US may contract by 4-5%. Germany and Japan could contract by 7-8%.
This sort of global economic collapse is unprecedented. Moreover, it is difficult to see how the world would grow again when the collapse is over.
If history is guidance, political crisis tends to follow such an economic collapse. When an economic crisis triggers a political one, it makes a quick economic recovery virtually impossible. Out of desperation, governments are trying to support asset prices either directly or incentivizing reluctant speculators to play. Without understanding what governments are doing, most people think that things are either getting better or well soon. After all, shouldn't stock prices tell us about the future, according to theory (Unfortunately not true in practice when you really need it)? The positive thinking is leading many to chase this market. This is a bear rally that will swallow many smart investors.
This phase of government policy-targeting asset prices began with the Fed's announcement for buying up to $1.15 trillion of treasuries, commercial and mortgage papers. It was targeting mortgage interest rate in order to stabilize property price. However, this sort of policy meant that the Fed knew what property price should be. The US property price was 100% overvalued relative to income. After the bubble burst, it should go back.
What the Fed is doing is to slow the adjustment and shift a big chunk of the adjustment through general inflation rather than property price decline. What the Fed is doing will impact the dollar for years to come.
The second part came with the Geithner plan for stripping toxic assets from the US 's troubled banks. Hank Paulson, Tim Geithner's predecessor, wanted to focus on stripping the bad assets off the banks too. His plan didn't fly because the market prices for the bad assets were too low for the banks to survive. Most banks have questionable assets more than twice their equity capital. As these assets are trading at 30 cents on the dollar, if the toxic assets are sold at market price, most banks are bankrupt. This is why Hank Paulson shifted to injecting money directly into the banks first. The hope was that it would stabilize the financial system and the toxic asset prices would rise sufficiently for the banks to survive. This hasn't happened.
The Geithner Plan tries to boost the prices of toxic assets by subsidizing speculation. The centerpiece of the plan was offering government-guaranteed 6-1 leverage. If an investor risks one dollar, the plan caps his loss at one 1 but offers the reward equivalent to risking 7.
The current toxic asset price is 30 cents on the dollar. The price reflects the expected return on the bad asset. It is equivalent to 70% chance of bankruptcy and total wipeout for creditors and 30% chance of survival for the borrowers that support the assets. Under the Geithner Plan, an investor that puts down one dollar can buy $7 worth of toxic assets. At the current price of 30 cents on the dollar, he could buy $23.3 of toxic assets. There is 30% chance that the investor gets $23.3 and, after paying off $6 of debt, and has $ 16.3 in income. There is 70% that he loses everything. Hence, his expected income for his $1 investment is $16.3*0.3=$4.9.
This plan should have boosted demand for toxic assets tremendously.
Indeed, based on the simple example above, investors should be willing to pay more than twice the current price. This would save the banks.
For the investors in toxic assets, they reap rewards from the 30% of the performing asset bundles that they have bought and leave the 70% non performing ones to the taxpayers. This 'beautiful plan' works by robbing taxpayers. But, the prices for toxic assets have not risen that much. Why? I think that the market doesn't think that the plan could work. The public opinions may torpedo it before it goes into implementation. If it goes ahead, the US Congress may pass retroactive laws to confiscate the profits from the investors who participate in this scheme. Essentially, the Geithner Plan is giving speculators free money. But they are not taking it because they are terrified of the consequences.
The third piece is changing the mark-to-market rule. The Financial Accounting Standards Board of the US has changed its rule for accounting asset value. It now allows financial institutions to value their assets according to their 'judgment' rather than market price if they think that the market isn't working. Market may not value asset prices perfectly.
But, who could do better? This rule change is to allow the banks in trouble to stop reporting losses from asset quality deterioration.
When this change happened, the share prices of the troubled banks rose sharply. The market was not just reacting to a superficial change. The change is meaningful for the share prices. If the banks can name their prices for the assets on their books, they don't have to raise capital to stay in business. This means that they might make enough money over time to recapitalize. Hence, the risk of their bankruptcy has declined.
The increased survival chance has boosted their share prices.
Shouldn't this be a good thing that banks don't go burst? Not necessarily so. Look at what happened in Japan . Its banks essentially didn't report their losses and tried to make money to recapitalize. It kept the economy down for ten years without succeeding in their getting out of capital shortfall. The reality won't change with a change in the accounting rule.
These banks know they don't have enough capital. Hence, they won't increase lending and will try to milk their existing assets for profits to recapitalize. They will be a drag on the economy for years to come.
The US seems to be copying from Japan .
In addition to the US 's policies for targeting asset prices, most other major economies are encouraging their banks to lend. What does 'encouraging' mean? Banks normally lend to maximize profits by balancing between risk and reward. When governments encourage them to lend, it really means pressuring banks to lower standards, i.e., taking on more risk for the same or less reward. This sort of policy is really to exchange non-performing loans in future for boosting demand today.
The argument in favor such an approach is that, if every bank lends, the economy improves, which would decrease non-performing assets. This sort of 'free lunch'
thinking works temporarily by inflating another bubble. Of course, it will create a bigger mess in future. Reflating an asset bubble to support the economy is widely hoped for by distressed investors around the world. Policymakers, in addition to their concerns for economic weakness and political stability, are responding to investors' cry for help. This is why we are seeing so many policies that are pumping air into a deflating bubble. It seems the air-pumping is working now. But, it won't last. As governments throw everything at it, more air is going in than coming out. But, government actions can't put in air on a sustainable basis. The air leakage will last with rising unemployment, falling corporate profits, and collapsing trade.
I think that the air leakage will overwhelm government air pumping in 2010.
Another major dip in asset prices is likely. Further, I think that inflation will become a problem, which would cause treasuries and other government bonds to drop. Government bonds are the last bubble to burst.
Other asset prices will bottom when this bubble deflates. This force will reverse all the air that governments are putting in now. The global economy would have a second dip then.
The debate over inflation or deflation has been raging on. The low bond yield suggests that the consensus is for deflation. In September 2006 at the IMF-World Bank annual meeting in Singapore I predicted a financial crisis in 2007, economic crisis in 2008, and stagflation beyond.
The last prediction has not happened yet. What governments and central banks are doing have strengthened my conviction that stagflation will haunt the global economy for years to come.
Historically, the burst following a speculative boom is deflationary for two reasons. First, a speculative boom is investment biased. Hence, there is overcapacity during the burst, as the demand during the boom was exaggerated. Second, bankruptcies of banks and production businesses drive up unemployment, which decreases demand and pushes more businesses into bankruptcies. This vicious cycle prolongs price decline.
The current burst won't lead to sustained deflation for two reasons.
First, the speculation was centered on unproductive assets like property and financial product. Automobile and electronics are two global industries with considerable overcapacity. The automobile industry has had overcapacity for a long time. The problem was covered up by the credit bubble that exaggerated demand, as buyers were incentivized to change cars more frequently with zero down-and-zero interest rate financing. The deflationary pressure would end with the bankruptcy of one or two major producers. The deflation would last if governments prop up their auto companies with taxpayers' money. At least the Obama government has shown unwillingness to do so.
The electronics industry is used to deflation. It is usually good deflation-rising productivity supporting declining price from that industry. What's going on now is not good deflation. The drastic cuts of capital expenditure by global companies have caused a demand collapse for IT products. The pressure is causing the industry to cut back quickly.
This industry is shrinking without government prodding. The bad deflation in this industry will end quickly with capacity reduction.
China's manufacturing expansion is also a source of overcapacity. When the Asian Financial Crisis depressed demand one decade ago, I thought China 's overcapacity was deflationary, because manufacturers in other countries would have match Chinese prices. Now is different.
Manufacturing prices are Chinese. Manufacturing value added has shrunk dramatically relative to the costs of raw materials. The manufacturing capacity in China is unlikely to sustain deflation. For example, three quarters of the cost for steel production are raw materials like iron ore and coking coal. The overcapacity in steel production can't sustain price decline of steel product.
Second, the vicious cycle between bankruptcy, especially banks, and demand contraction is unlikely now. Governments and central banks are propping up virtually every bank in the world. They are lending to industries to keep them afloat. The current dynamic suggests that a bottom for the global economy would be reached soon. As mentioned above, I thought it would be the first half of 2009. Now, with a second a second dip forecast, it would be likely in 2010.
Despite demand weakness, inflation could emerge through commodity inflation and labor unions pushing wage increase, the same factors in the 1970s.
Commodity inflation is already visible as investors who are frightened of monetary expansion seek safe haven. Oil is back above $50/barrel despite demand collapse because so much money has flowed into exchange traded funds that buy oil. As central banks keep printing money, more and more money will flow into commodities.
I always believe that labor union is mostly demand driven. During prosperity labor unions are weak as a rising tide lifts everyone's living standard. When hard time hits, more people support union activism. During economic stagnation, especially stagflation, without union power, average workers will see declining living standard. The national strikes in France and other European countries are a harbinger for what could come.
I have argued above for a second dip in 2010 and stagflation beyond. I want to add some comments on the nature of bear market rallies. In a structural bear market that lasts for years stock markets can have big bounces from time to time. These bounces can be as big as 40% from bottom to top. Obviously, rallies of such size are mouthwatering. It is difficult for investors to stay on the side line. I am not against playing such bear rallies. But, one must remember that bear rallies are at best zero-sum games and often negative-sum games, i.e., making new lows after each bounce. One's profit is someone else's loss. Timing is everything in playing bear bounces. Getting in and out early are the basic principles.
The most harmful behavior is chasing. After a rally of 30% has happened, it is very bad for your financial health to chase.
The last structural bear market happened in the 1970s and lasted for ten years. It is obviously difficult for investors to stay on the sideline for a decade. After all, how long does one live? This is why a structural bear market swallows more and more people through such rallies. The ones that jump in later tend to be more patient and probably smarter. The last ones that perish in a structural bear market may have IQ over 200. I am afraid that the current bear market won't end until it brings down Warren Buffett.
BLT - Media News Re Issuance of BLTA Bonds
Kamis, 16/04/2009 14:13 WIB
BLTA Tawarkan Kupon Obligasi 13,5-16,5 Persen
Indro Bagus SU - detikFinance
Jakarta - PT Berlian Laju Tanker Tbk (BLTA) menawarkan kupon obligasi konvensional dan sukuk ijarah senilai Rp 500 miliar sebesar 13,5%-16,5%. Dana penerbitan obligasi akan digunakan untuk membeli sejumlah kapal bekas.
Pada 27 Mei 2009, BLTA akan mencatatkan (listing) obligasi konvensional sebesar Rp 300 miliar dan sukuk ijarah sebesar Rp 200 miliar.
Obligasi konvensional BLTA akan terdiri atas 3 seri dengan tenor masing-masing 1 tahun, 3 tahun dan 5 tahun. Sukuk ijarah akan memiliki 2 seri dengan tenor 3 tahun dan 5 tahun.
Kupon obligasi konvensional seri A mengacu pada FR0024+275-400 basis poin (bps) atau sekitar 13,5-14,5%. Obligasi seri B akan mengacu pada FR0023+300-425 bps atau sekitar 14,5-15,75%. Dan obligasi seri C mengacu pada FR0051+325-450 bps atau sekitar 15,25-16,5%.
Untuk imbal hasil sukuk ijarah seri A ekuivalen dengan FR0023+300-425 bps (14,5-15,75%) dan sukuk ijarah seri B ekuivalen dengan FR0051+325-450 bps (15,25-16,5%).
PT Pemeringkat Efek Indonesia (Pefindo) memberikan peringkat single A dengan outlook stabil. PT Danatama Makmur dan PT Andalan Artha Advisindo Sekuritas bertindak sebagai penjamin emisi obligasi.
"Book building akan dilakukan mulai 16-28 April 2009," ujar Managing Director Danatama, Henry Yusuf usai paparan di Grand Indonesia, Jakarta, Rabu (16/4/2009).
Pernyataan efektif diharapkan bisa diperoleh pada 13 Mei 2009, sehingga masa penawaran dijadwalkan akan digelar pada 18-20 Mei 2009.
"Listing di bursa pada 27 Mei 2009," ujarnya.
Sementara dana hasil penerbitan obligasi akan digunakan untuk membeli sejumlah kapal bekas yang rencananya akan digunakan untuk proyek perseroan ke depan.
Saat ini perseroan sedang mengikuti tender pengangkutan minyak dan gas bumi dari PT Pertamina. "Jumlahnya masih belum ditentukan, tergantung hasil tender nanti," ujar HeadInvestor Relations BLTA, Peter Chayson.
(dro/dnl)
Below are some media release following the Public Expose and Due Diligence Meeting for the Bond offerings.
http://rapidshare.com/files/223435096/2009.04.20_Media_News_on_Bond_Offerings_1.pdf
http://rapidshare.com/files/223435176/2009.04.20_Media_News_on_Bond_Offerings_2.pdf
http://rapidshare.com/files/223435257/2009.04.20_Media_News_on_Bond_Offerings_3.pdf
http://rapidshare.com/files/223435000/2009.04.20_Media_News_on_Bond_Offerings4.pdf
http://rapidshare.com/files/223435401/2009.04.20_Media_News_on_Bond_Offerings_5.pdf
http://rapidshare.com/files/223436370/2009.04.20_Media_News_on_Bond_Offerings_6.pdf.jpg
BLTA Tawarkan Kupon Obligasi 13,5-16,5 Persen
Indro Bagus SU - detikFinance
Jakarta - PT Berlian Laju Tanker Tbk (BLTA) menawarkan kupon obligasi konvensional dan sukuk ijarah senilai Rp 500 miliar sebesar 13,5%-16,5%. Dana penerbitan obligasi akan digunakan untuk membeli sejumlah kapal bekas.
Pada 27 Mei 2009, BLTA akan mencatatkan (listing) obligasi konvensional sebesar Rp 300 miliar dan sukuk ijarah sebesar Rp 200 miliar.
Obligasi konvensional BLTA akan terdiri atas 3 seri dengan tenor masing-masing 1 tahun, 3 tahun dan 5 tahun. Sukuk ijarah akan memiliki 2 seri dengan tenor 3 tahun dan 5 tahun.
Kupon obligasi konvensional seri A mengacu pada FR0024+275-400 basis poin (bps) atau sekitar 13,5-14,5%. Obligasi seri B akan mengacu pada FR0023+300-425 bps atau sekitar 14,5-15,75%. Dan obligasi seri C mengacu pada FR0051+325-450 bps atau sekitar 15,25-16,5%.
Untuk imbal hasil sukuk ijarah seri A ekuivalen dengan FR0023+300-425 bps (14,5-15,75%) dan sukuk ijarah seri B ekuivalen dengan FR0051+325-450 bps (15,25-16,5%).
PT Pemeringkat Efek Indonesia (Pefindo) memberikan peringkat single A dengan outlook stabil. PT Danatama Makmur dan PT Andalan Artha Advisindo Sekuritas bertindak sebagai penjamin emisi obligasi.
"Book building akan dilakukan mulai 16-28 April 2009," ujar Managing Director Danatama, Henry Yusuf usai paparan di Grand Indonesia, Jakarta, Rabu (16/4/2009).
Pernyataan efektif diharapkan bisa diperoleh pada 13 Mei 2009, sehingga masa penawaran dijadwalkan akan digelar pada 18-20 Mei 2009.
"Listing di bursa pada 27 Mei 2009," ujarnya.
Sementara dana hasil penerbitan obligasi akan digunakan untuk membeli sejumlah kapal bekas yang rencananya akan digunakan untuk proyek perseroan ke depan.
Saat ini perseroan sedang mengikuti tender pengangkutan minyak dan gas bumi dari PT Pertamina. "Jumlahnya masih belum ditentukan, tergantung hasil tender nanti," ujar HeadInvestor Relations BLTA, Peter Chayson.
(dro/dnl)
Below are some media release following the Public Expose and Due Diligence Meeting for the Bond offerings.
http://rapidshare.com/files/223435096/2009.04.20_Media_News_on_Bond_Offerings_1.pdf
http://rapidshare.com/files/223435176/2009.04.20_Media_News_on_Bond_Offerings_2.pdf
http://rapidshare.com/files/223435257/2009.04.20_Media_News_on_Bond_Offerings_3.pdf
http://rapidshare.com/files/223435000/2009.04.20_Media_News_on_Bond_Offerings4.pdf
http://rapidshare.com/files/223435401/2009.04.20_Media_News_on_Bond_Offerings_5.pdf
http://rapidshare.com/files/223436370/2009.04.20_Media_News_on_Bond_Offerings_6.pdf.jpg
Wednesday 15 April 2009
BLT - Press Release Public Expose Bond Offerings
Dear All,
Please find attached the Press Release for the above event.
http://rapidshare.com/files/221865329/2009.03.26_Press_Release_for_Due_Diligence_Meeting_and_Public_Expose_Material_Bond_Offerings.pdf
Thank you for your attention.
Best Regards,
Please find attached the Press Release for the above event.
http://rapidshare.com/files/221865329/2009.03.26_Press_Release_for_Due_Diligence_Meeting_and_Public_Expose_Material_Bond_Offerings.pdf
Thank you for your attention.
Best Regards,
BLT - Due Diligence Meeting and Public Expose Bond Offerings
Dear All,
We welcome all of you to the above event today as the Blitz Megaplex, Grand Indonesia.
Hope the event is a success.
Thanks & Regards
Peter
We welcome all of you to the above event today as the Blitz Megaplex, Grand Indonesia.
Hope the event is a success.
Thanks & Regards
Peter
Pirates Attack Second US Vessel
Wednesday, April 15, 2009, 9:47 AM
U.S. Naval Destroyer, USS Bainbridge
According to a BBC World News report, pirates used rocket-propelled grenades and automatic weapons to attack another US merchant ship off the coast of Somalia on April 15. The pirates damaged the Liberty Sun, which was carrying a cargo of food aid. The USS Bainbridge, still carrying the rescued Maersk Alabama Caption, arrived some hours later, by which time the pirates had gone.
(Source: BBC World News)
U.S. Naval Destroyer, USS Bainbridge
According to a BBC World News report, pirates used rocket-propelled grenades and automatic weapons to attack another US merchant ship off the coast of Somalia on April 15. The pirates damaged the Liberty Sun, which was carrying a cargo of food aid. The USS Bainbridge, still carrying the rescued Maersk Alabama Caption, arrived some hours later, by which time the pirates had gone.
(Source: BBC World News)
BLT - Presentation on Due Diligence Meeting and Public Expose for Bond Offerings
Dear All,
Please file a file on the above from the link provided below.
http://rapidshare.com/files/221857159/2009.03.26_Due_Diligence_Meeting_and_Public_Expose_Material_Bond_Offerings.pdf
Thank you for your attention.
Best Regards
Peter
Please file a file on the above from the link provided below.
http://rapidshare.com/files/221857159/2009.03.26_Due_Diligence_Meeting_and_Public_Expose_Material_Bond_Offerings.pdf
Thank you for your attention.
Best Regards
Peter
Tuesday 14 April 2009
BLT - Invitation to the 2009 AGM
Dear All,
Please find attached a link to the invitation to the 2009 AGM.
http://rapidshare.com/files/221225449/2009.04.03_Invitation_to_AGM.pdf
Thank you for your attention.
Regards
Please find attached a link to the invitation to the 2009 AGM.
http://rapidshare.com/files/221225449/2009.04.03_Invitation_to_AGM.pdf
Thank you for your attention.
Regards
BLT - Research Report from AAA Securities
Dear All,
Please find below the research report on BLT from AAA Securities
http://rapidshare.com/files/221170489/2009.04.08_AAA_Securities_on_BLT__Penawaran_Obligasi_.pdf
Thank you for your attention.
Regards
Please find below the research report on BLT from AAA Securities
http://rapidshare.com/files/221170489/2009.04.08_AAA_Securities_on_BLT__Penawaran_Obligasi_.pdf
Thank you for your attention.
Regards
BLT - Summary Annual Report 2008
Dear All,
Please find a link for the above document.
http://rapidshare.com/files/221154930/Summary_2008_Final.pdf
Thank you for your attention.
Best Regards
Please find a link for the above document.
http://rapidshare.com/files/221154930/Summary_2008_Final.pdf
Thank you for your attention.
Best Regards
BLT - Invitation to the Due Diligence Meeting and Public Expose
Dear All,
Please find a link for the invitation on the above event.
http://rapidshare.com/files/221141104/2009_04_13_invitation_DDM.jpg.pdf
Thank you for your attention.
Regards
Please find a link for the invitation on the above event.
http://rapidshare.com/files/221141104/2009_04_13_invitation_DDM.jpg.pdf
Thank you for your attention.
Regards
BLT - Voting Instruction Form for 2009 AGM
Dear All,
Please find attached a link to obtain the Voting Instruction Form (VIF) to attend the above event.
http://rapidshare.com/files/221142266/PT_Berlian_AGM_VIF_-_6th_draft__30_Mar_2009_.pdf
Thank you for your attention.
Please find attached a link to obtain the Voting Instruction Form (VIF) to attend the above event.
http://rapidshare.com/files/221142266/PT_Berlian_AGM_VIF_-_6th_draft__30_Mar_2009_.pdf
Thank you for your attention.
Wednesday 8 April 2009
Eitzen cancels a third of its newbuild orders
Craig Eason - Wednesday 8 April 2009
OSLO-listed Eitzen Group has cancelled 11 newbuilding orders with a yard in Japan as it continues to struggle against the market conditions. Eitzen Gas, a fully-owned division of Oslo-listed Camillo Eitzen, has cancelled its total newbuilding commitment of six 2,500 cu m gas carriers, while Copenhagen-based Eitzen Chemical has axed five 12,000 dwt stainless steel chemical carriers with the same yard.
Eitzen Chemical, a separately listed company majority owned by the Eitzen Group, said the cancellation agreement is conditional upon the company providing satisfactory security to the yard for the cancellation fee. The company has agreed to compensate the yard a total of $15m but said it has subsequently reduced its capital expenditure by $175m. With the recent delivery of the 25,000 dwt epoxy coated Sichem Osprey from Korea, Eitzen Chemical has only three remaining newbuildings on order from Croatia.
Camillo Eitzen said that while the agreement to cancel the six gas vessels was against a settlement of $2.5m it had saved $105m in further costs. The company still has a further 17 vessels on order with its bulk division. Both Camillo Eitzen and Eitzen Chemical are in talks with their banks to try and further amend debt repayments and covenant structures.
Source: Lloyd's List
OSLO-listed Eitzen Group has cancelled 11 newbuilding orders with a yard in Japan as it continues to struggle against the market conditions. Eitzen Gas, a fully-owned division of Oslo-listed Camillo Eitzen, has cancelled its total newbuilding commitment of six 2,500 cu m gas carriers, while Copenhagen-based Eitzen Chemical has axed five 12,000 dwt stainless steel chemical carriers with the same yard.
Eitzen Chemical, a separately listed company majority owned by the Eitzen Group, said the cancellation agreement is conditional upon the company providing satisfactory security to the yard for the cancellation fee. The company has agreed to compensate the yard a total of $15m but said it has subsequently reduced its capital expenditure by $175m. With the recent delivery of the 25,000 dwt epoxy coated Sichem Osprey from Korea, Eitzen Chemical has only three remaining newbuildings on order from Croatia.
Camillo Eitzen said that while the agreement to cancel the six gas vessels was against a settlement of $2.5m it had saved $105m in further costs. The company still has a further 17 vessels on order with its bulk division. Both Camillo Eitzen and Eitzen Chemical are in talks with their banks to try and further amend debt repayments and covenant structures.
Source: Lloyd's List
Tuesday 7 April 2009
MISC eyes small shipping firms
Tuesday, 07 April 2009
MISC Bhd, the largest shipping company in Malaysia, may take advantage of the current downcycle in the industry to acquire smaller units or subsidiaries of “troubled” shipping companies at lower prices. An AmResearch analyst told StarBiz that MISC would be doing relatively well if a small acquisition took place despite the gloomy environment that had affected trade, the lifeline of the sector.
“MISC has stable revenue from its liquefied natural gas (LNG) tankers business with 70% to 80% of the vessels on long-term contracts where the earliest will expire only in 2013,” he said, adding that the global downturn had an insignificant impact on these secured contracts.MISC is the world’s largest single owner-operator of LNG tankers with a fleet of 27, which is expected to expand to 29 this year.
MISC’s offshore business and huge order book from its heavy engineering division via subsidiary Malaysia Marine and Heavy Engineering Sdn Bhd (MMHE) will keep the group busy for the next 12 to 30 months.According to a recent report by the research house, these three divisions now collectively account for 100% of the company’s pre-tax profit.Also, the analyst said, MISC had secured a credit line of about US$1bil last year to part-finance its fleet growth and other purposes.
MISC’s underperforming businesses are in the container shipping and chemical tanker divisions. The report said MISC would likely take over a unit of a financially-troubled shipping company similar to the American Eagle Tankers (AET) acquisition in 2003.MISC bought AET at a 10% discount when Neptune Orient Lines Ltd auctioned it due to its high debt level and loss-making operation.AET, now a wholly-owned subsidiary of MISC, was purchased at an equity consideration of US$445mil, or US$1.1bil inclusive of net debt.
“Although MISC’s gearing immediately rose to 66% post-purchase of AET, natural de-leveraging from healthy free cash flow brought the gearing down to 17% in 2006,” said the report.MISC’s net gearing for the financial year ended March 31 (FY09) is forecast to stand at 0.3 times while international peers in its league, such as General Maritime Corp, Aries Maritime Transport Ltd and Taiheiyo Kaiun Co Ltd, were already in the red with stretched balanced sheets at two to 13 times net gearing.
The report said although prospects of the acquisition seemed challenging in the immediate term, MISC’s profitability was a factor supporting the move.The research house’s earnings forecast for MISC in FY09 is at RM1.4bil compared with RM2.4bil in FY08. Its nine-month earnings for the period ended Dec 31 was at RM1.2bil.It is also possible that MISC is eyeing another oil and gas fabrication yard since the proposed reverse takeover of Ramunia Holdings Bhd via the injection of subsidiary MMHE for RM3bil did not materialise in November.But, according to the analyst, the chances were slim as there were only a few fabrication yards in Malaysia.
“Additionally, MMHE had already expanded its land size by 50% to cope with the increasing demand via leasing the land next to its location.“But, we are not ruling out this possibility that the yard acquisition may replace the takeover of the shipping unit,” he said.
Despite the rosy outlook, MISC is not immune to the effects of the shipping downturn, as it has two underperforming businesses, namely the container shipping and chemical tanker divisions.The report said the net profit of RM250mil in its third quarter was 24% lower year-on-year as it was dragged down by these two divisions due to oversupply of vessels in the marketplace that had hurt freight rates, especially for container ship.“Container ship deliveries are expected to rise to 1.7 million 20-foot equivalent units (TEUs) this year and 1.8 million TEUs in 2010, adding an estimated 14% and 13% capacity respectively to the existing fleet.“As a response to the oversupply situation, measures have been taken by container ship operators to reduce available capacity in the market by laying off vessels and scrapping old vessels to restore freight rates at healthy levels,” it said.
According to Clarkson Research, idle container space in the fleet in February amounted to 800,000 TEUs – equivalent to more than 300 vessels – accounting for 6.5% of available fleet in the beginning of the month.But the analyst said the losses suffered by these two divisions could be offset by the earnings of its LNG tankers, heavy engineering and offshore operations until the economy stabilised.
Source: The Star
MISC Bhd, the largest shipping company in Malaysia, may take advantage of the current downcycle in the industry to acquire smaller units or subsidiaries of “troubled” shipping companies at lower prices. An AmResearch analyst told StarBiz that MISC would be doing relatively well if a small acquisition took place despite the gloomy environment that had affected trade, the lifeline of the sector.
“MISC has stable revenue from its liquefied natural gas (LNG) tankers business with 70% to 80% of the vessels on long-term contracts where the earliest will expire only in 2013,” he said, adding that the global downturn had an insignificant impact on these secured contracts.MISC is the world’s largest single owner-operator of LNG tankers with a fleet of 27, which is expected to expand to 29 this year.
MISC’s offshore business and huge order book from its heavy engineering division via subsidiary Malaysia Marine and Heavy Engineering Sdn Bhd (MMHE) will keep the group busy for the next 12 to 30 months.According to a recent report by the research house, these three divisions now collectively account for 100% of the company’s pre-tax profit.Also, the analyst said, MISC had secured a credit line of about US$1bil last year to part-finance its fleet growth and other purposes.
MISC’s underperforming businesses are in the container shipping and chemical tanker divisions. The report said MISC would likely take over a unit of a financially-troubled shipping company similar to the American Eagle Tankers (AET) acquisition in 2003.MISC bought AET at a 10% discount when Neptune Orient Lines Ltd auctioned it due to its high debt level and loss-making operation.AET, now a wholly-owned subsidiary of MISC, was purchased at an equity consideration of US$445mil, or US$1.1bil inclusive of net debt.
“Although MISC’s gearing immediately rose to 66% post-purchase of AET, natural de-leveraging from healthy free cash flow brought the gearing down to 17% in 2006,” said the report.MISC’s net gearing for the financial year ended March 31 (FY09) is forecast to stand at 0.3 times while international peers in its league, such as General Maritime Corp, Aries Maritime Transport Ltd and Taiheiyo Kaiun Co Ltd, were already in the red with stretched balanced sheets at two to 13 times net gearing.
The report said although prospects of the acquisition seemed challenging in the immediate term, MISC’s profitability was a factor supporting the move.The research house’s earnings forecast for MISC in FY09 is at RM1.4bil compared with RM2.4bil in FY08. Its nine-month earnings for the period ended Dec 31 was at RM1.2bil.It is also possible that MISC is eyeing another oil and gas fabrication yard since the proposed reverse takeover of Ramunia Holdings Bhd via the injection of subsidiary MMHE for RM3bil did not materialise in November.But, according to the analyst, the chances were slim as there were only a few fabrication yards in Malaysia.
“Additionally, MMHE had already expanded its land size by 50% to cope with the increasing demand via leasing the land next to its location.“But, we are not ruling out this possibility that the yard acquisition may replace the takeover of the shipping unit,” he said.
Despite the rosy outlook, MISC is not immune to the effects of the shipping downturn, as it has two underperforming businesses, namely the container shipping and chemical tanker divisions.The report said the net profit of RM250mil in its third quarter was 24% lower year-on-year as it was dragged down by these two divisions due to oversupply of vessels in the marketplace that had hurt freight rates, especially for container ship.“Container ship deliveries are expected to rise to 1.7 million 20-foot equivalent units (TEUs) this year and 1.8 million TEUs in 2010, adding an estimated 14% and 13% capacity respectively to the existing fleet.“As a response to the oversupply situation, measures have been taken by container ship operators to reduce available capacity in the market by laying off vessels and scrapping old vessels to restore freight rates at healthy levels,” it said.
According to Clarkson Research, idle container space in the fleet in February amounted to 800,000 TEUs – equivalent to more than 300 vessels – accounting for 6.5% of available fleet in the beginning of the month.But the analyst said the losses suffered by these two divisions could be offset by the earnings of its LNG tankers, heavy engineering and offshore operations until the economy stabilised.
Source: The Star
Middle East Oil Tanker Surplus Declines as Sea Storage Expands
Tuesday, 07 April 2009
A surplus of supertankers competing to transport Middle East crude shrank as traders booked the ships to store cargoes and owners diverted some vessels to the Atlantic Ocean, where rents are better. There are 30 percent more very large crude carriers, or VLCCs, than there are cargoes over the next 30 days, according to the median estimate of three shipowners, five shipbrokers, and one trader surveyed by Bloomberg News yesterday. That's five percentage points lower than last week's surplus of 35 percent.
"The main reason is storage in VLCCs and extended long- voyages that keep the vessels" loaded with cargoes for longer, Ody Valatsas, an official at Athens-based shipowner Dynacom Tankers Management Ltd., said by e-mail yesterday. According to him, there is a shortage of tankers relative to likely cargoes.Vitol Group, Royal Dutch Shell Plc and Gunvor International BV between them hired five VLCCs or ultra-large crude carriers to keep oil at sea as plunging ship-rental rates made the trade potentially more profitable again after a three-month gap, Athens-based Optima Shipbrokers said April 3.
Sea storage climbed to 80 million barrels in January, the most in two decades, Frontline Ltd., the biggest supertanker company, said at the time.Asian refiners, unable to secure the cargoes they need from the Middle East as the region's producing nations cut output, are buying extra consignments from West Africa and the Mediterranean port of Ceyhan in Turkey, Valatsas said. That's employing tankers on longer-distance voyages, effectively cutting supply, he said. A "few" vessels are also sailing to West Africa from the Persian Gulf because hire rates are better in the Atlantic, he said.
Shipping CostsThe drop in supply may help stem a six-day drop in the benchmark shipping cost for crude, based on Saudi Arabian consignments to Japan, which fell 2 percent to 32.3 Worldscale points on April 3. That's the lowest in Worldscale terms since Sept. 12, 2002 and works out at $18,660 a day in rental income for owners, according to the London-based exchange.Based on Baltic Exchange rates of 45.31 Worldscale points and a formula from Oslo-based shipbroker RS Platou AS, West Africa-to-U.S. cargoes are making owners $36,849 a day.Frontline said Feb. 26 it needs $32,100 a day to break even on each of the vessels, including finance costs. It requires $11,300 a day to pay crew, insurance and other daily expenses.There are 102 VLCCs anchored around the world, according to ship-tracking data compiled by Bloomberg. That's little changed from a month ago, when there were 104.
Source: Alaric Nightingale, Bloomberg
A surplus of supertankers competing to transport Middle East crude shrank as traders booked the ships to store cargoes and owners diverted some vessels to the Atlantic Ocean, where rents are better. There are 30 percent more very large crude carriers, or VLCCs, than there are cargoes over the next 30 days, according to the median estimate of three shipowners, five shipbrokers, and one trader surveyed by Bloomberg News yesterday. That's five percentage points lower than last week's surplus of 35 percent.
"The main reason is storage in VLCCs and extended long- voyages that keep the vessels" loaded with cargoes for longer, Ody Valatsas, an official at Athens-based shipowner Dynacom Tankers Management Ltd., said by e-mail yesterday. According to him, there is a shortage of tankers relative to likely cargoes.Vitol Group, Royal Dutch Shell Plc and Gunvor International BV between them hired five VLCCs or ultra-large crude carriers to keep oil at sea as plunging ship-rental rates made the trade potentially more profitable again after a three-month gap, Athens-based Optima Shipbrokers said April 3.
Sea storage climbed to 80 million barrels in January, the most in two decades, Frontline Ltd., the biggest supertanker company, said at the time.Asian refiners, unable to secure the cargoes they need from the Middle East as the region's producing nations cut output, are buying extra consignments from West Africa and the Mediterranean port of Ceyhan in Turkey, Valatsas said. That's employing tankers on longer-distance voyages, effectively cutting supply, he said. A "few" vessels are also sailing to West Africa from the Persian Gulf because hire rates are better in the Atlantic, he said.
Shipping CostsThe drop in supply may help stem a six-day drop in the benchmark shipping cost for crude, based on Saudi Arabian consignments to Japan, which fell 2 percent to 32.3 Worldscale points on April 3. That's the lowest in Worldscale terms since Sept. 12, 2002 and works out at $18,660 a day in rental income for owners, according to the London-based exchange.Based on Baltic Exchange rates of 45.31 Worldscale points and a formula from Oslo-based shipbroker RS Platou AS, West Africa-to-U.S. cargoes are making owners $36,849 a day.Frontline said Feb. 26 it needs $32,100 a day to break even on each of the vessels, including finance costs. It requires $11,300 a day to pay crew, insurance and other daily expenses.There are 102 VLCCs anchored around the world, according to ship-tracking data compiled by Bloomberg. That's little changed from a month ago, when there were 104.
Source: Alaric Nightingale, Bloomberg
Stolt Tankers Reports $2.5m Loss
Tuesday, April 07, 2009, 9:22 AM
According to an April 6 report from Emirates Business 24/7, chemical tanker specialist Stolt Tankers reported an operating loss of $2.5m for the first quarter this year versus operating profit of $27.5m for the previous quarter. Its Oslo-listed parent Stolt Nielsen attributed the loss to lower volumes and a decline in spot market rates.
(Source: Emirates Business 24/7)
According to an April 6 report from Emirates Business 24/7, chemical tanker specialist Stolt Tankers reported an operating loss of $2.5m for the first quarter this year versus operating profit of $27.5m for the previous quarter. Its Oslo-listed parent Stolt Nielsen attributed the loss to lower volumes and a decline in spot market rates.
(Source: Emirates Business 24/7)
Sunday 5 April 2009
BLT - Abridged Prospectus on Bond Issuance
Please find attached the above document.
http://rapidshare.com/files/217959561/2009.04.06_Prospektus_Ringkas_Obligasi_IV_dan_Sukuk_II_2009.pdf
Please also refer to previous news about the issuance.
http://chemicaltankers.blogspot.com/2009/04/blt-media-news-blta-issue-bonds.html
http://chemicaltankers.blogspot.com/2009/04/blt-media-news-berlian-may-sell-500.html
http://rapidshare.com/files/217959561/2009.04.06_Prospektus_Ringkas_Obligasi_IV_dan_Sukuk_II_2009.pdf
Please also refer to previous news about the issuance.
http://chemicaltankers.blogspot.com/2009/04/blt-media-news-blta-issue-bonds.html
http://chemicaltankers.blogspot.com/2009/04/blt-media-news-berlian-may-sell-500.html
BLT Vessels - Featuring MT Chembulk Yokohama
Please find below the link to the picture of the vessel.
http://rapidshare.com/files/216507638/cb_yoko_at_shed_30_001.jpg
http://rapidshare.com/files/216507876/CBY_Yokohama_V.60_003.jpg
http://rapidshare.com/files/216508139/CBY_Yokohama_V.60_016.jpg
http://rapidshare.com/files/216512999/Cby_Yokohama_V.61_001.jpg
http://rapidshare.com/files/216507638/cb_yoko_at_shed_30_001.jpg
http://rapidshare.com/files/216507876/CBY_Yokohama_V.60_003.jpg
http://rapidshare.com/files/216508139/CBY_Yokohama_V.60_016.jpg
http://rapidshare.com/files/216512999/Cby_Yokohama_V.61_001.jpg
The Final Frontier: Social Networking Comes to the Maritime World
Thursday, April 2nd, 2009
MarEx Editor Joe Keefe dips his toes (tentatively) into the water (with surprising results). At 0530 hours yesterday, my fifth-grade son headed off on the BIGGEST field trip of his elementary school career. Yes, this soon-to-be rising sixth grader (equipped with his first roll-on deodorant stick) was off to Williamsburg, VA, in an air-conditioned luxury coach with 149 of his closest friends and chaperones, complete with video capabilities and, I am told, very nice bathrooms. During the pre-trip parents’ briefing (given in the usual format of passing along ten minutes of information distributed over 1.5 hours of excruciating dialogue), it was also disclosed that we could follow (virtually) every move of the three-day, 1,000-mile odyssey, on something called “Twitter.”
The excitement fairly crackled in the crisp spring air. For me, his trip evokes (bitter) memories of my 2nd class (that’s junior year for you non-maritime academy people) trip to New York City for RADAR school in the fall of 1978. Mass. Maritime had no RADAR simulators at the time, so off we went (56 deck cadets strong) on the annual pilgrimage to the Church Seaman’s Institute near the Battery to get our RADAR certification in advance of our license exams. I’m not saying that there was any beer on the bus or anything, but the rented, obsolete (did I mention yellow?) school bus also didn’t have bathrooms, and that traffic jam on the East River Drive nearly did me in. “Twitter” certainly wasn’t involved.
All of which leads me to the point of this editorial (and you’ve been very patient). A few months ago at Workboat, our sales executive, Brett Keil, came to me at lunch and said (with gusto), “You gotta get hooked up with this Linked In thing!” I paused, and then replied, “I don’t have time for this nonsense. I’ve got a weekly e-newsletter and a print magazine to put out. I’m pretty tied up here, in case you haven’t noticed.” He persisted. I signed up to get him out of my face. * Sigh * Yesterday, he advised me that the Maritime Executive Linked In community had almost reached 3,100 members, with many more banging persistently on the door. I am now a believer in social media or networking through social media sites. It wasn’t always like that, though.
We’ve all heard the “Facebook” stories. And, for anyone who doesn’t think so, the Internet is forever. Just ask the national caliber wrestler from Nebraska who got thrown off the team for his extracurricular activities, which are now permanently archived on the web. Okay, he caught on with Edinboro State this year, proving that – oh heck, I don’t know what it proved. But, it was with this in mind that I hesitate to link up with just anyone. When invited on Linked In, I always read the other person’s bio, and I can tell you that I do not always say “yes.” Hey, can’t you just see it now?: “Live at ELEVEN; MarEx Editor Linked with bank robber!” Not long after I signed up with Linked In and began my gradual awakening into the world of social networking, I received another invitation to sign up for something called “Twitter.” Our former sitter, who had taken care of our kids when they were very young – a nice young woman, BTW – sent me a Twitter message: she wanted to keep up with us on Twitter. I ignored the E-mail for about a week, but finally opened it and pondered at length just what heck Twitter was. Nevertheless, she had been very good to the kids for a couple of years so I dutifully filled out the forms. And then, suddenly, there I was: a grumpy, 50-year old editor (three months removed from surgery) smack in the middle of her Twitter world, (and, I must say) the intimidating photo of the (very large) boyfriend with the fu-manchu mustache and now, I was just one of her four “followers.” It also became apparent (heck, correct me if I am wrong here) that just about anything I put online there would be public knowledge.
I think I was a member of Twitter for about three minutes. Let’s sum everything up here: positives and negatives. My next-door neighbor has promised to capture all the Twitter traffic and send it to me (he’s a computer geek at the same bank my wife toils for) For this, I will owe him a bottle of wine. He is a tough negotiator. My son, on the other hand, is annoyed with me because his PowerPoint skills far exceed mine, and I will therefore be of limited value when he puts together the required post-trip presentation. For this, I’m thinking about permanently sending him next door because they’ll probably get along real well. Meanwhile, back in Washington, the Commandant of the Coast Guard has an “iCommandant” journal and a couple of other innovative ways to communicate online. This is the guy that actually caused me to get a haircut before first interviewing him a couple of years ago.
I read ADM Allen’s CV after Katrina and then saw his picture (a really short haircut, I assure you) on the Coast Guard web site and decided to dry clean my best suit, as well. At this point, if he’s cool enough to do all of this in his spare time while also running the Coast Guard, well, I guess I better get my act together, too. I don’t pretend to be the most “hip” guy on the planet, but it is clear to me that the concept of citizen journalists, social media, near constant communication and all the rest is here to stay. As the traditional forms of media struggle in an increasingly digitized world, the ways to communicate online seem to be proliferating in an exponential way. Here at MarEx, we continually evaluate all aspects of this phenomena and yes, we join in where we think it useful to the readers and potentially profitable to the firm. We’re in business to make money like everyone else. We will also continue to publish our groundbreaking print editions that we think are redefining how to keep the maritime world informed. Soon, we will begin podcasting (I’m just learning what that entails, too) and some other ways to keep you informed.
In the meantime, day 2 of the Williamsburg trip is dawning, and I’ve got to figure out just how to get all that digitized news from the tour bus. Who says I’m not a digital guy? –MarEx. Read our March 2008 interview with the Coast Guard Commandant by clicking HERE Joseph Keefe is the Editor-in-Chief of THE MARITIME EXECUTIVE. He can be reached with comments and/or questions on this or any other articles in this e-newsletter at jkeefe@maritime-executive.com. Or, you could “link up” by joining our group on Linked In by clicking http://www.linkedin.com/e/gis/47685
Source: Maritime E-News
MarEx Editor Joe Keefe dips his toes (tentatively) into the water (with surprising results). At 0530 hours yesterday, my fifth-grade son headed off on the BIGGEST field trip of his elementary school career. Yes, this soon-to-be rising sixth grader (equipped with his first roll-on deodorant stick) was off to Williamsburg, VA, in an air-conditioned luxury coach with 149 of his closest friends and chaperones, complete with video capabilities and, I am told, very nice bathrooms. During the pre-trip parents’ briefing (given in the usual format of passing along ten minutes of information distributed over 1.5 hours of excruciating dialogue), it was also disclosed that we could follow (virtually) every move of the three-day, 1,000-mile odyssey, on something called “Twitter.”
The excitement fairly crackled in the crisp spring air. For me, his trip evokes (bitter) memories of my 2nd class (that’s junior year for you non-maritime academy people) trip to New York City for RADAR school in the fall of 1978. Mass. Maritime had no RADAR simulators at the time, so off we went (56 deck cadets strong) on the annual pilgrimage to the Church Seaman’s Institute near the Battery to get our RADAR certification in advance of our license exams. I’m not saying that there was any beer on the bus or anything, but the rented, obsolete (did I mention yellow?) school bus also didn’t have bathrooms, and that traffic jam on the East River Drive nearly did me in. “Twitter” certainly wasn’t involved.
All of which leads me to the point of this editorial (and you’ve been very patient). A few months ago at Workboat, our sales executive, Brett Keil, came to me at lunch and said (with gusto), “You gotta get hooked up with this Linked In thing!” I paused, and then replied, “I don’t have time for this nonsense. I’ve got a weekly e-newsletter and a print magazine to put out. I’m pretty tied up here, in case you haven’t noticed.” He persisted. I signed up to get him out of my face. * Sigh * Yesterday, he advised me that the Maritime Executive Linked In community had almost reached 3,100 members, with many more banging persistently on the door. I am now a believer in social media or networking through social media sites. It wasn’t always like that, though.
We’ve all heard the “Facebook” stories. And, for anyone who doesn’t think so, the Internet is forever. Just ask the national caliber wrestler from Nebraska who got thrown off the team for his extracurricular activities, which are now permanently archived on the web. Okay, he caught on with Edinboro State this year, proving that – oh heck, I don’t know what it proved. But, it was with this in mind that I hesitate to link up with just anyone. When invited on Linked In, I always read the other person’s bio, and I can tell you that I do not always say “yes.” Hey, can’t you just see it now?: “Live at ELEVEN; MarEx Editor Linked with bank robber!” Not long after I signed up with Linked In and began my gradual awakening into the world of social networking, I received another invitation to sign up for something called “Twitter.” Our former sitter, who had taken care of our kids when they were very young – a nice young woman, BTW – sent me a Twitter message: she wanted to keep up with us on Twitter. I ignored the E-mail for about a week, but finally opened it and pondered at length just what heck Twitter was. Nevertheless, she had been very good to the kids for a couple of years so I dutifully filled out the forms. And then, suddenly, there I was: a grumpy, 50-year old editor (three months removed from surgery) smack in the middle of her Twitter world, (and, I must say) the intimidating photo of the (very large) boyfriend with the fu-manchu mustache and now, I was just one of her four “followers.” It also became apparent (heck, correct me if I am wrong here) that just about anything I put online there would be public knowledge.
I think I was a member of Twitter for about three minutes. Let’s sum everything up here: positives and negatives. My next-door neighbor has promised to capture all the Twitter traffic and send it to me (he’s a computer geek at the same bank my wife toils for) For this, I will owe him a bottle of wine. He is a tough negotiator. My son, on the other hand, is annoyed with me because his PowerPoint skills far exceed mine, and I will therefore be of limited value when he puts together the required post-trip presentation. For this, I’m thinking about permanently sending him next door because they’ll probably get along real well. Meanwhile, back in Washington, the Commandant of the Coast Guard has an “iCommandant” journal and a couple of other innovative ways to communicate online. This is the guy that actually caused me to get a haircut before first interviewing him a couple of years ago.
I read ADM Allen’s CV after Katrina and then saw his picture (a really short haircut, I assure you) on the Coast Guard web site and decided to dry clean my best suit, as well. At this point, if he’s cool enough to do all of this in his spare time while also running the Coast Guard, well, I guess I better get my act together, too. I don’t pretend to be the most “hip” guy on the planet, but it is clear to me that the concept of citizen journalists, social media, near constant communication and all the rest is here to stay. As the traditional forms of media struggle in an increasingly digitized world, the ways to communicate online seem to be proliferating in an exponential way. Here at MarEx, we continually evaluate all aspects of this phenomena and yes, we join in where we think it useful to the readers and potentially profitable to the firm. We’re in business to make money like everyone else. We will also continue to publish our groundbreaking print editions that we think are redefining how to keep the maritime world informed. Soon, we will begin podcasting (I’m just learning what that entails, too) and some other ways to keep you informed.
In the meantime, day 2 of the Williamsburg trip is dawning, and I’ve got to figure out just how to get all that digitized news from the tour bus. Who says I’m not a digital guy? –MarEx. Read our March 2008 interview with the Coast Guard Commandant by clicking HERE Joseph Keefe is the Editor-in-Chief of THE MARITIME EXECUTIVE. He can be reached with comments and/or questions on this or any other articles in this e-newsletter at jkeefe@maritime-executive.com. Or, you could “link up” by joining our group on Linked In by clicking http://www.linkedin.com/e/gis/47685
Source: Maritime E-News
TOP Ships Takes Delivery of 3rd & 4th Newbuilds
Thursday, April 02, 2009
TOP Ships Inc. (NASDAQ: TOPS) announced that it has taken delivery of the M/Ts Ionian Wave and Tyrrhenian Wave from SPP Plant & Shipbuilding Co., Ltd of the Republic of Korea.The Tyrrhenian Wave and the Tyrrhenian Wave are the third and fourth of six 50,000 dwt product / chemical tankers to be delivered within the first and second quarter of 2009. The Tyrrhenian Wave and the Tyrrhenian Wave have entered into respective bareboat time-charter employments for a minimum period of seven years at a daily rate of $14,300, with three successive one-year options at a higher daily rate.
Source: (www.topships.org)
TOP Ships Inc. (NASDAQ: TOPS) announced that it has taken delivery of the M/Ts Ionian Wave and Tyrrhenian Wave from SPP Plant & Shipbuilding Co., Ltd of the Republic of Korea.The Tyrrhenian Wave and the Tyrrhenian Wave are the third and fourth of six 50,000 dwt product / chemical tankers to be delivered within the first and second quarter of 2009. The Tyrrhenian Wave and the Tyrrhenian Wave have entered into respective bareboat time-charter employments for a minimum period of seven years at a daily rate of $14,300, with three successive one-year options at a higher daily rate.
Source: (www.topships.org)
First paperless Italian tanker fleet
(Apr 2 2009) Italian tanker owner Navigazione Montanari chose Transas Mediterranean and CAIM to trial an ECDIS dual paperless solution.
Between May and September 2008, three Transas Navi-Sailor 3000 dual systems were ordered by Montanari and installed on three chemical/product tankers - ‘Valtellina’, ‘Valgardena’ and ‘Valsesia’.
Montanari has now completed the installations resulting in the vessels being able to sail in a paperless condition.
After the successful installation, Montanari decided to continue its partnership with Transas and ordered Transas ECDIS for all its newbuildings.
Transas was chosen for compatibility with the new TADS service (TRANSAS Admiralty Data – a joint venture with the UKHO), the company said.
During the installation, Transas’ technical team worked with Montanari’s engineers enabling them to have a clear understanding of the equipment. Transas also offered the engineers training.
Navigazione Montanari is involved in the crude oil, chemical and product carrier sector. Currently there are 22 vessels in operation with another seven newbuildings to be delivered in the next two years.
Source: Lloyd's List
Between May and September 2008, three Transas Navi-Sailor 3000 dual systems were ordered by Montanari and installed on three chemical/product tankers - ‘Valtellina’, ‘Valgardena’ and ‘Valsesia’.
Montanari has now completed the installations resulting in the vessels being able to sail in a paperless condition.
After the successful installation, Montanari decided to continue its partnership with Transas and ordered Transas ECDIS for all its newbuildings.
Transas was chosen for compatibility with the new TADS service (TRANSAS Admiralty Data – a joint venture with the UKHO), the company said.
During the installation, Transas’ technical team worked with Montanari’s engineers enabling them to have a clear understanding of the equipment. Transas also offered the engineers training.
Navigazione Montanari is involved in the crude oil, chemical and product carrier sector. Currently there are 22 vessels in operation with another seven newbuildings to be delivered in the next two years.
Source: Lloyd's List
Charter termination angers StealthGas
(Apr 2 2009) LPG carrier and tanker owner StealthGas has threatened legal action in reaction to the termination of a charter for one of its LPG vessels, according to press reports.
StealthGas alleged that its bareboat charter of ‘Gas Ice’ to Societa Cooperative di Navigazione G Giulietti had been ‘improperly terminated’.
The company reportedly said that it was ‘exploring all legal means at its disposal with respect to G Giulietti and has already had ships owned or controlled by G Giulietti arrested as a means of securing monies owed to the company as a consequence of the improper termination of the charter’.
StealthGas also disclosed in a press release that it will delay five newbuildings until after 2010. It said delays had been secured through ‘amicable negotiations’ and ‘at no cost’ to the company.
Source: Tanker Operator
StealthGas alleged that its bareboat charter of ‘Gas Ice’ to Societa Cooperative di Navigazione G Giulietti had been ‘improperly terminated’.
The company reportedly said that it was ‘exploring all legal means at its disposal with respect to G Giulietti and has already had ships owned or controlled by G Giulietti arrested as a means of securing monies owed to the company as a consequence of the improper termination of the charter’.
StealthGas also disclosed in a press release that it will delay five newbuildings until after 2010. It said delays had been secured through ‘amicable negotiations’ and ‘at no cost’ to the company.
Source: Tanker Operator
Stolt Nielsen battens down the hatches
Stolt Nielsen battens down the hatches(Apr 2 2009) Stolt Nielsen said first quarter of 2009 results versus those of the fourth quarter of 2008 reflected the impact of the global economic downturn.
The net profit attributable to shareholders decreased to $14.5 mill from $52.6 mill, while revenue decreased to $392.3 mill from $489.5 mill.
Stolt Tankers reported an operating loss of $2.5 mill versus an operating profit of $27.5 mill in 4Q08, reflecting lower volumes and a decline in spot-market rates, partially offset by lower operating costs.
Bunker costs decreased by $39.2 mill in the first quarter, though the positive impact of the decline was partially offset by a $20.4 mill decrease in bunker surcharges and an $8.8 mill increase in bunker-hedging losses.
Commenting on the Company's results, ceo Niels Stolt-Nielsen said: "SNSA's first-quarter results reflect the panic in the global credit markets that we saw late last year. As producers, traders and consumers stopped ordering products, global industrial production plunged. Destocking of inventories followed and parcel-tanker cargo volumes dropped more than 30% on some trade routes. Though conditions stabilised somewhat in the latter half of February, we attributed the change to a modest restocking of inventories following two months of near paralysis in the market.
"We continue to expect 2009 and 2010 to be very challenging years for our industry and the world economy at large”, he said. "In response to lower demand we are redelivering ships on timecharter and bringing forward the recycling of ships. In all businesses we are deferring or cancelling non-committed or non-essential capital expenditures, including newbuildings and a full hiring freeze has been imposed.
"SNSA remains in full compliance with all of its debt covenants and none of the Company's assets have been impaired," he stressed. "All our committed capital expenditures are fully financed."
Stolt Tankers also said that SLS Shipbuilding of South Korea had taken the company to arbitration to challenge the cancellation of a contract for the construction of a 44,000 dwt coated parcel tanker.
She would have been the first in a series of four ships and was originally scheduled for delivery in May 2008, but was allegedly delayed. This was the reason given for the cancellation.
The ruling by the arbitration panel will follow English law.
Source: Tanker Operator
The net profit attributable to shareholders decreased to $14.5 mill from $52.6 mill, while revenue decreased to $392.3 mill from $489.5 mill.
Stolt Tankers reported an operating loss of $2.5 mill versus an operating profit of $27.5 mill in 4Q08, reflecting lower volumes and a decline in spot-market rates, partially offset by lower operating costs.
Bunker costs decreased by $39.2 mill in the first quarter, though the positive impact of the decline was partially offset by a $20.4 mill decrease in bunker surcharges and an $8.8 mill increase in bunker-hedging losses.
Commenting on the Company's results, ceo Niels Stolt-Nielsen said: "SNSA's first-quarter results reflect the panic in the global credit markets that we saw late last year. As producers, traders and consumers stopped ordering products, global industrial production plunged. Destocking of inventories followed and parcel-tanker cargo volumes dropped more than 30% on some trade routes. Though conditions stabilised somewhat in the latter half of February, we attributed the change to a modest restocking of inventories following two months of near paralysis in the market.
"We continue to expect 2009 and 2010 to be very challenging years for our industry and the world economy at large”, he said. "In response to lower demand we are redelivering ships on timecharter and bringing forward the recycling of ships. In all businesses we are deferring or cancelling non-committed or non-essential capital expenditures, including newbuildings and a full hiring freeze has been imposed.
"SNSA remains in full compliance with all of its debt covenants and none of the Company's assets have been impaired," he stressed. "All our committed capital expenditures are fully financed."
Stolt Tankers also said that SLS Shipbuilding of South Korea had taken the company to arbitration to challenge the cancellation of a contract for the construction of a 44,000 dwt coated parcel tanker.
She would have been the first in a series of four ships and was originally scheduled for delivery in May 2008, but was allegedly delayed. This was the reason given for the cancellation.
The ruling by the arbitration panel will follow English law.
Source: Tanker Operator
Wednesday 1 April 2009
BLT - Media News : BLTA Issue Bonds
AKHIR SEMESTER I-2009, Berlian Laju Terbitkan Obligasi Rp 500 Miliar
02/04/2009 08:02:32 WIB
Oleh Myrna Riyanto
JAKARTA, INVESTOR DAILY
PT Berlian Laju Tanker (BLTA) akan menerbitkan obligasi senilai Rp 500 miliar pada akhir semester I-2009. Perseroan telah menunjuk PT Danatama Makmur dan PT AAA Securities sebagai penjamin pelaksana emisi (underwriter).
Direktur Utama Bursa Efek Indonesia (BEI) Erry Firmansyah mengungkapkan, emisi obligasi Berlian Laju Tanker akan ikut menyemarakkan perdagangan obligasi di pasar.
“Bila Berlian Laju Tanker menerbitkan obligasi pada semester ini, berarti obligasi korporasi yang diterbitkan di BEI hingga semester I-2009 mencapai Rp 5,5 triliun,” kata Erry di Jakarta, Rabu (1/4).
Sementara itu, Danatama Makmur selaku salah satu underwriter obligasi Berlian Laju mengakui adanya rencana penerbitan obligasi tersebut. “Kami sudah memasukkan laporan rencana emisi obligasi Berlian Laju Tanker ke BEI,” tutur Vice President Investment Banking Danatama Makmur Vicky Ganda Saputra kepada Investor Daily.
Berdasarkan data BEI, pada semester I-2009, ada sekitar delapan perusahaan yang akan dan sudah menerbitkan obligasi, antara lain PT Matahari Putra Prima Tbk, PT Summit Oto Finance, PT Apexindo Pratama Tbk (APEX), PT Adira Dinamika Multi Finance, PT Federal International Finance (FIF), PT Astra Sedaya Finance, PT Danareksa Securities, dan PT Indomobil Finance.
Laba Naik 105%
Pada 2008, Berlian Laju Tanker membukukan laba bersih Rp 1,56 triliun, naik 105,26% dibanding tahun sebelumnya Rp758,98 miliar. Peningkatan itu terjadi sejalan dengan lonjakan laba usaha sebesar 110,57% menjadi Rp 1,891 triliun pada kuartal IV-2008, dibanding periode sama tahun sebelumnya Rp 898,071 miliar.
Sekitar separuh pendapatan berasal dari Chembulk Tankers LLC, perusahaan yang diakuisisi Berlian pada 2007. ”Setelah mengakuisisi Chembulk , kapasitas angkut Berlian Laju Tanker meningkat dua kali lipat,” ujar Direktur Keuangan Berlian Laju Tanker Kevin Wong.
Adapun pendapatan usaha Berlian Laju pada 2008 mencapai Rp 7 triliun, naik 92,39% dibandingkan 2007 sebesar Rp 3,64 triliun. Tahun lalu, Berlian Laju Tanker membagikan deviden Rp 375 per saham, meningkat 187,43% dibanding 2007 sebesar Rp 199 per saham.
Kevin Wong beberapa waktu lalu mengungkapkan, Berlian Laju berencana membeli 4-5 unit kapal senilai US$ 270-280 juta atau setara Rp 2,7-2,8 triliun. “Itu diperlukan untuk menambah armada angkutan perseroan,” tutur Kevin kepada Investor Daily.
Menurut dia, Berlian Laju akan menambah satu kapal tanker gas alam cair (LNG) dan 3-4 unit kapal kimia. Semuanya merupakan kapal baru berkapasitas 120-130 ribu dead weight ton (DWT) yang akan dibeli dari Jepang dan Korea Selatan. Dengan adanya tambahan itu, perseroan akan memiliki 92-93 unit kapal. Utilisasi kapal pada 2009 diperkirakan tidak jauh berbeda dengan tahun lalu sebesar 93-94%.
Kevin menjelaskan, dana pembelian kapal akan berasal dari kas internal dan pinjaman perbankan. Posisi kas setara kas perusahaan hingga akhir September 2008 mencapai Rp 1,66 trliun.
Dia menambahkan, Berlian Laju akan mendiversifikasi jenis produk pengangkutan berupa minyak nabati dan produk turunannya. Selama ini Berlian antara lain memperdagangkan, membeli, memproses, memproduksi bahan dan produk kimia cair, gas, minyak bumi dan olahannya, produk olahan kimia cair, produk mineral nonlogam, serta barang olahannya.
Pengangkutan kimia memberikan kontribusi terbesar, disusul pengangkutan minyak, serta gas dan fasilitas terapung berbentuk kapal untuk produksi dan penyimpanan sementara migas di laut (floating production storage and offloading/FPSO).
02/04/2009 08:02:32 WIB
Oleh Myrna Riyanto
JAKARTA, INVESTOR DAILY
PT Berlian Laju Tanker (BLTA) akan menerbitkan obligasi senilai Rp 500 miliar pada akhir semester I-2009. Perseroan telah menunjuk PT Danatama Makmur dan PT AAA Securities sebagai penjamin pelaksana emisi (underwriter).
Direktur Utama Bursa Efek Indonesia (BEI) Erry Firmansyah mengungkapkan, emisi obligasi Berlian Laju Tanker akan ikut menyemarakkan perdagangan obligasi di pasar.
“Bila Berlian Laju Tanker menerbitkan obligasi pada semester ini, berarti obligasi korporasi yang diterbitkan di BEI hingga semester I-2009 mencapai Rp 5,5 triliun,” kata Erry di Jakarta, Rabu (1/4).
Sementara itu, Danatama Makmur selaku salah satu underwriter obligasi Berlian Laju mengakui adanya rencana penerbitan obligasi tersebut. “Kami sudah memasukkan laporan rencana emisi obligasi Berlian Laju Tanker ke BEI,” tutur Vice President Investment Banking Danatama Makmur Vicky Ganda Saputra kepada Investor Daily.
Berdasarkan data BEI, pada semester I-2009, ada sekitar delapan perusahaan yang akan dan sudah menerbitkan obligasi, antara lain PT Matahari Putra Prima Tbk, PT Summit Oto Finance, PT Apexindo Pratama Tbk (APEX), PT Adira Dinamika Multi Finance, PT Federal International Finance (FIF), PT Astra Sedaya Finance, PT Danareksa Securities, dan PT Indomobil Finance.
Laba Naik 105%
Pada 2008, Berlian Laju Tanker membukukan laba bersih Rp 1,56 triliun, naik 105,26% dibanding tahun sebelumnya Rp758,98 miliar. Peningkatan itu terjadi sejalan dengan lonjakan laba usaha sebesar 110,57% menjadi Rp 1,891 triliun pada kuartal IV-2008, dibanding periode sama tahun sebelumnya Rp 898,071 miliar.
Sekitar separuh pendapatan berasal dari Chembulk Tankers LLC, perusahaan yang diakuisisi Berlian pada 2007. ”Setelah mengakuisisi Chembulk , kapasitas angkut Berlian Laju Tanker meningkat dua kali lipat,” ujar Direktur Keuangan Berlian Laju Tanker Kevin Wong.
Adapun pendapatan usaha Berlian Laju pada 2008 mencapai Rp 7 triliun, naik 92,39% dibandingkan 2007 sebesar Rp 3,64 triliun. Tahun lalu, Berlian Laju Tanker membagikan deviden Rp 375 per saham, meningkat 187,43% dibanding 2007 sebesar Rp 199 per saham.
Kevin Wong beberapa waktu lalu mengungkapkan, Berlian Laju berencana membeli 4-5 unit kapal senilai US$ 270-280 juta atau setara Rp 2,7-2,8 triliun. “Itu diperlukan untuk menambah armada angkutan perseroan,” tutur Kevin kepada Investor Daily.
Menurut dia, Berlian Laju akan menambah satu kapal tanker gas alam cair (LNG) dan 3-4 unit kapal kimia. Semuanya merupakan kapal baru berkapasitas 120-130 ribu dead weight ton (DWT) yang akan dibeli dari Jepang dan Korea Selatan. Dengan adanya tambahan itu, perseroan akan memiliki 92-93 unit kapal. Utilisasi kapal pada 2009 diperkirakan tidak jauh berbeda dengan tahun lalu sebesar 93-94%.
Kevin menjelaskan, dana pembelian kapal akan berasal dari kas internal dan pinjaman perbankan. Posisi kas setara kas perusahaan hingga akhir September 2008 mencapai Rp 1,66 trliun.
Dia menambahkan, Berlian Laju akan mendiversifikasi jenis produk pengangkutan berupa minyak nabati dan produk turunannya. Selama ini Berlian antara lain memperdagangkan, membeli, memproses, memproduksi bahan dan produk kimia cair, gas, minyak bumi dan olahannya, produk olahan kimia cair, produk mineral nonlogam, serta barang olahannya.
Pengangkutan kimia memberikan kontribusi terbesar, disusul pengangkutan minyak, serta gas dan fasilitas terapung berbentuk kapal untuk produksi dan penyimpanan sementara migas di laut (floating production storage and offloading/FPSO).
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