From Lloyd's List
John McLaughlin - Monday 27 July 2009
D’AMATO di Navigazione’s recent filing for bankruptcy court protection or concordato preventivo under Italian law is likely to lead to the liquidation of the company’s assets to pay off creditors, sources close to the operation said on Monday.
Janet Porter - Friday 31 July 2009
GLOBAL Ship Lease, the containership owner in which CMA CGM has a sizeable interest, has obtained a further loan waiver from its banks while the two sides discuss amendments to its $800m credit facility.
The existing waiver expires today, but New York listed GSL said it had agreed with its lenders to extend its waiver for loan-to-value tests until the end of August. In the meantime, dividend payments remain suspended.
At issue are ship prices, with bankers concerned about the decline in charter free market values of containerships.
The company had initially been required to submit vessel valuations in April and previously received a waiver from loan-to-value tests until the end of July.
GSL currently owns 16 vessels and has contracted to purchase an additional three ships. That includes the CMA CGM Berlioz, to be bought from the French line for $82m in September, contingent on financing.
The company also has contracts in place to buy two newbuildings from German interests for approximately $77m each, which are scheduled to be delivered in the fourth quarter of 2010 with charters to Zim.
CSAV seeks extra $300m via new offering
Rainbow Nelson - Thursday 30 July 2009
CSAV, the Chilean shipping group battling to steer a course through the hazards of the container market, has told investors that it will seek to raise another $300m through a new equity offering.
Shareholders have been invited to an emergency general meeting in Valparaiso to approve the fund-raising initiative on August 18.
The second of three equity offerings planned by the group is higher than original designs to raise $220m, reflecting the failure of the group to raise $400m from shipowners with vessels on hire to the Chilean group.
In April, CSAV released plans to raise $750m from the capital markets and by offering shares to shipowners controlling most of the company’s 99-strong box fleet.
The funds are needed to cover first half losses of more than $400m, as the line has suffered at the hands of downturn in box trades.
A group of shipowners owning 78 vessels have signed up to take a $350m stake in the company following the completion of two equity placements on the Chilean stock exchange.
CSAV raised $145m from the first offering in June ($15m more than first planned), with investors such as the Claro Group injecting $68.9m through its holding company, Maritima de Inversiones.
If shareholders approve the second offering, it will be implemented in September.
With a 46% stake in the group, the Claro Group is likely to have to dig deep once again to ensure the success of any second offering.
It has said it wants to maintain its dominant holding. To do so it would need to inject another $138m into the group.
The Financial Services Authority, the UK market regulator, has called a special meeting with major oil companies, banks, hedge funds and oil brokers to review regulation in the oil and commodity market.
The meeting, scheduled for August 5, comes as US regulator have said that they intend to clamp down on financial flows into the oil and other commodities markets. The Commodity Futures Trading Commission is currently holding hearings about possible changes to position limits.
The meeting organised by the FSA follows an episode of rogue trading earlier this month at PVM, the London-based oil brokerage, which triggered losses of $10m for the company and pushed oil prices to their highest level this year at $73.50 a barrel.
TEMPERS flared in Hamburg today as logistics entrepreneur Klaus-Michael Kühne called for Hapag-Lloyd to be restructured just hours after refusing to participate in the first stage of a refinancing package that had been agreed late Tuesday.
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... the Kuehne+Nagel chairman, along with insurer Hanse Merkur, and the merchant bank MM Warburg, which were supposed to give €72m, refused to participate.
Neither will the world’s largest shipping bank, HSH Nordbank, be buying shares in CTA. Instead it has agreed to grant a €15m loan to Hapag-Lloyd.
Mr Kühne founded the Albert Ballin consortium a year ago to prevent the sale of Hapag-Lloyd to a foreign owner, and is its second largest shareholder after the city of Hamburg.
Following this week’s progress, shareholders have to reach a decision over the coming weeks on the next €400m tranche that Hapag-Lloyd requires before approaching Berlin for further assistance.
Mr Kühne said that his refusal to participate in the CTA purchase did not constitute a preliminary decision about long-term aid.
He also indicated that a merger with a bigger partner from Europe or Asia could not be ruled out.
Tui, the German tourism group, is to provide more than two-thirds of the short-term financing needed by Hapag-Lloyd after many of the container shipping line’s other shareholders refused to take part in a rescue deal.
Most of the €330m lifeline will come from the €315m sale to shareholders of Hapag-Lloyd’s 25.1 per cent stake in Hamburg’s Altenwerder Container Terminal, one of the world’s most advanced.
However, Tui, which owns only 43 per cent of Hapag-Lloyd, will have to provide €215m of the price for the container terminal. Of the members of the Albert Ballin consortium that owns the remaining 57 per cent, only Hamburg’s state government and Signal Iduna, the insurance group, agreed to take equity in the transaction after two days of talks. A third shareholder, HSH Nordbank, will provide a €15m loan.
The deal deepens Tui’s involvement with Hapag-Lloyd, only four months after it sold a 57 per cent stake with the intention of getting out of container shipping. Tui faces severe problems in its core package tourism business.
“They are becoming more involved in the container business, not less,” Mark McVicar, a transport analyst at Nomura International, said. Tui said it had agreed to put in fresh capital to secure its investment.
The short-term funding provides only part of the €1.75bn Hapag-Lloyd believes it needs to secure its long-term survival in the face of the economic downturn and container shipping’s worst-ever crisis.
The company lost €222m on €1.1bn turnover in the first quarter of 2009. The failure of most of the Albert Ballin consortium to take part in the deal underlines the divisions that have opened up since the group took its stake in the container line in March. Klaus-Michael Kühne, the logistics entrepreneur who is the second-largest investor, has been particularly critical of the company’s decision-making
FMC Assesses $748,000 in Penalties
Hanjin Shipping paid the Federal Maritime Commission $440,000 to settle allegations that it violated the Shipping Act of 1984, the commission announced this week. Hanjin allegedly charged shippers less-than-tariff rates, and allowed access to contract rates for ocean transportation intermediaries that were not signatories.
CMA CGM, Hapag-Lloyd and Hamburg Sud will reduce vessel capacity by combining two of their liner services in August into a new direct service between the East Coast of South America and North Europe.
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Hamburg Sud will operate the six 5,900-TEU vessels deployed on Sling 1.
Sling 2 will deploy six 2,800-TEU vessels of which four will be operated by CMA CGM and its partner Maruba and two by Hapag-Lloyd.
Hamburger Abendblatt also reported Hapag-Lloyd is open to a merger or partnership with rival ocean carriers following a review of its operations by Roland Berger, a consultant.
The most likely partners are France's CMA CGM or APL, a unit of Singapore's Neptune Orient Line, it said citing sources in Hapag-Lloyd.
I work at Maersk; a customer told me that he hears rumours of CMA and Hapag merging. That ought to shake things up!
July 27, 2009 3:33 PM
D’AMATO di Navigazione’s recent filing for bankruptcy court protection or concordato preventivo under Italian law is likely to lead to the liquidation of the company’s assets to pay off creditors, sources close to the operation said on Monday.
The procedure will allow the mortgage holders to get 100% of what they are owed and the other creditors 65%.
A spokeswoman for the company said the aim was to satisfy the creditors while maintaining the company as a going concern, though industry sources cast serious doubt on its prospects of survival.
- Global Ship Lease's ability to enter into long-term, fixed-rate charters;
- the continued performance of existing long-term, fixed-rate charters;
D'Amato di Navigazione has filed for court protection but rejects that it is in bankruptcy or insolvency.
The Italian bulker and tanker owner filed for a "new procedure provided by Italian law" in the Court of Naples, a spokeswoman told TradeWinds Friday.
"This procedure has nothing to do with bankruptcy but it is a guarantee for the creditors, who will be satisfied thanks to the business continuity and the conduct of regular operations in the manner and within the terms agreed," the spokeswoman said.
Without financial aid from its shareholders, the line would face bankruptcy within weeks, industry insiders said.
Hapag-Lloyd AG, Germany’s largest container-shipping company, probably won’t make a profit before 2011, Die Welt reported, citing unidentified people from the company. Falling freight orders and prices will create a loss of at least 700 million euros ($998 million) at the Hamburg-based company this year, and about 200 million euros in 2010, the newspaper reported.
TWO of Europe’s largest containership operators are heading for a showdown with Korea Eximbank over demands for extra money to cover the cost of newbuildings that were already financed, and are ready to be delivered.
Mediterranean Shipping Co and CMA CGM are said to be the companies most immediately caught up in the wrangle. But unless some solution is found, many others could find themselves in a similar position, say industry sources.
Korea Eximbank, which has financed the ships at the centre of the dispute, is applying strict loan-to-value terms and telling owners to provide more of their own equity to compensate for declining ship prices.
Korea Eximbank’s ship financing director Hoseob Jeung said there had been no change of policy, and that loan covenants had always been based on market value.
Mr Jeung said that the bank was following Organisation for Economic Co-operation and Development guidelines, in line with other international banks.
Reputed mobster Michael Coppola was convicted of racketeering charges that included extortion of one of the International Longshoremen’s Association’s largest locals for more than 30 years.
Federal prosecutors said Coppola controlled ILA Local 1235 in Newark from 1974 to 2007 through the extortion of three consecutive local union presidents -- Vincent Colucci, who pleaded guilty to racketeering charges in 1980; Al Cernadas, who resigned in 2005 after pleading guilty to extortion conspiracy; and Vincent Aulisi, ousted in 2007 after the FBI wiretapped his son and Coppola discussing what prosecutors said apparently were payoffs to the mob.
Tokyo Star Bank is owed $54.7m in mortgages on the chemical tankers and the 28,300-dwt bulker Yamaska (built 1985), but the ships are worth just $22.7m, according to court documents.
Before its bankruptcy filing, Eastwind Maritime owned more than 70 reefers, bulkers, tankers, boxships and other vessels, according to legal records.
....But tourism giant TUI, Hapag-Lloyd’s former parent and still one of its biggest shareholders with a 43 percent stake, is reluctant to provide its $450 million contribution in cash. Instead, it wants to convert some of its $1.4 billion of loans to Hapag-Lloyd into an increased equity stake, according to a source close to the negotiations.
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TUI, like most shareholders, is reluctant to put money into companies while “cash is king” in current market conditions, a source close to the Hanover-based company said.
HOPES that freight rates for containerised cargo had stabilised appear to have been dashed after Neptune Orient Lines disclosed another considerable lurch downwards.
The latest decline reflects both cheaper core rates and lower bunker recovery.
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In the year to date, average revenue per feu has fallen 20% to $2,375 compared with $2,972 in the corresponding period of 2008, while cargo volumes were 24% less at 970,600 feu.
DryShips has closed a deal to buy George Economou's stake of its drilling arm, the Nasdaq-listed company said Thursday.
The bulker and offshore drilling owner is paying $330m in cash and shares to buy the 25% stake from its chief executive.
The transaction makes Primelead a wholly-owned DryShips subsidiary.
An idea has been circulated to set up a new company, Baltic Max Feeder, that would take control of as many as 500 ships and set hire rates considerably above current levels.
Vessels of up to 1,400 teu would be put into the new company that could be jointly owned by banks, KG funds, and owners.
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Mr Neemann said he does not think Baltic Max would violate European antitrust regulations as the scheme aims at securing the supply of feeder tonnage by numerous small and medium-sized companies. A law firm had supported this view, Mr Neemann said.
Crude may average $50 a barrel in the second half and $55 next year in a “bear” case scenario, and reach $90 a barrel in the second half of 2009 and $100 in 2010 if the global economy recovers rapidly, the report said.
Barone, a prolific killer and founder of the Hell's Kitchen gang The Jets - the model for the "West Side Story" gang - played a key role when the Genovese and Gambino crime families carved up the waterfront.
why the Genovese crime family took over the longshoremen's union.
"So we could make money! Is that a good enough answer for you?" snapped 85-year-old George Barone. "Crissakes!"
The Crowley containership Elb Carrier, transported the Royal Ballet’s equipment in eight 40-foot containers that were delivered on July 7 for the troupe’s performances this week in Cuba’s two most iconic theaters, the Gran Teatro de la Habana, Sala Garcia Lorca and the Karl Marx Teatro.
Crowley is authorized to ship licensed cargo to Cuba. Currently, Crowley sails to Havana, Cuba from Port Everglades and Jacksonville, Fla. as an alternate port every week.
Eligible commodities for export to Cuba are detailed under Section 902(1) of the Trade Sanctions Reform and Export Enhancement Act of 2000.
Hapag-Lloyd, the world’s fifth largest container carrier, will get approximately $1 billion in financial support from its owners as it seeks additional aid from the German government and lenders.
TRADE credit insurers are refusing cover to struggling shipping companies’ fuel suppliers, with boxship line Zim emerging as an initial casualty in this latest turn in the economic crash.
At issue here appears to be the ability of shipping lines to convince customers that if they do not pay increased rates, carriers will further downsize their services to save money, and shippers will face capacity constraints.
If the problem persists, bankruptcies and an unhealthy level of consolidation in the liner shipping industry are inevitable, carriers maintain.
Patrick Hagen, Cologne - Wednesday 8 July 2009
HAPAG-Lloyd’s shareholders have agreed to help the stricken container line.
At a meeting held today in Hamburg, the members of the Albert Ballin consortium and tourism group Tui decided unanimously that they will give financial aid to Hapag-Lloyd.
Tui’s chief executive Michael Frenzel, chief financial officer Rainer Feuerhake and controlling chief Horst Baier were at the meeting. Neither Klaus-Michael Kühne nor his deputy Karl Gernandt attended.
This was seen as an affront by some of the participants, who were unhappy with Mr Kühne’s public comments on the financial situation at Hapag-Lloyd.
GERMANY’s largest container line Hapag-Lloyd needs fresh capital of more than €1bn ($1.4bn)
The actual amount will depend on market conditions and could be as much as €1.8bn in a worst possible case scenario, sources said.
EVERGREEN Marine, Taiwan’s largest liner company, has confirmed it will either scrap or redeliver back to owners 31 boxships up to 26 years old in a programme that will continue until 2013.
Evergreen spokeswoman Katherine Ko told Lloyd’s List the programme started at the end of last year or earlier this year.
Ms Ko said chartered-in tonnage would be returned at the end of the charter period with no early redeliveries.
Evergreen operated a combined owned and chartered-in fleet of 180 ships and the disposals would represent about a sixth of the Evergreen fleet, she said.
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Yang Ming Marine Transport also confirmed that it was mulling the possibility of putting 10 boxships operated by both itself and other members of the CKYH Alliance into hot lay-up at the end of this year.
A Yang Ming spokesman told Dow Jones: “We are concerned demand on US and Europe routes will be weak in the fourth quarter.”
ARIES Maritime has said foreclosure of its ships is a real possibility, and it does not expect to meet its loan covenants in the near future unless its lenders provide relief.
PricewaterhouseCoopers, the company’s auditor, has raised “substantial doubt” about Aries Maritime’s ability to continue as a going concern, even as Aries pushes ahead with an intended takeover by fellow Greece-based company Grandunion.
By Jesse Riseborough and Brett Foley
July 8 (Bloomberg) -- Rio Tinto Group, the world’s second- biggest iron ore exporter, has four employees detained in China amid a deadlock in annual price talks for the ore.
Rio hasn’t had contact with the workers from the Shanghai office since they were detained July 5, spokesman Nick Cobban said yesterday by phone from London. ....
Chinese steel mills are seeking a bigger price cut than the 33 percent agreed on in May between London-based Rio and Japanese, Korean and Taiwan producers, Hebei Iron & Steel Group Vice President Tian Zhiping said on July 2. Rio was criticized in China after it rejected a planned $19.5 billion investment by Aluminum Corp. of China in favor of a share sale and an iron ore joint venture with BHP Billiton Ltd.
China is “playing a bit of a dangerous game,” Ric Ronge, who helps manage the equivalent of $1 billion at Pengana Capital Ltd. in Melbourne, said today. “The fact of the matter is China needs the material and Rio needs to sell the material.”
(In reference to the TSA)...What these guys don't understand is, you can't restore market discipline by saying "don't do that". You restore market discipline by getting the supply more closely matched with demand.
The lines decided on a $500 increase for carrying a 40-foot box from Aug. 10 as a “voluntary guideline,” the Transpacific Stabilization Agreement said in an e-mailed statement yesterday. The companies will also raise fuel levies and may add peak season surcharges as well, the group added.
SOUTH Korean shipbuilder Hanjin Heavy Industries has apparently delayed an order for eight super post-panamax boxships on its own initiative, in an attempt to save the $1.3bn deal from the risk of cancellation.
Initially, the eight 12,800 teu ships ordered in 2007 by German owner NSC and Lloyd Fonds were scheduled for completion between 2010 and the end of 2011. Hanjin Heavy’s website now shows delivery dates of between 2010 and 2014.
However, Hanjin confirmed that Belgian shipowner Delphis has converted an order for four 3,400 teu vessels into three capesize bulkers.
The potential for ... a bleak scenario was implicit in remarks made last week by Peter Georgiopoulos, a leading shipowner, who predicted that markets have further to fall.
He noted the low rate at which banks were repossessing vessels compared to previous shipping crises. “The question is, what happens when that starts? What happens to values in the industry?”
SOUTH Korea’s Daewoo Logistics has filed for receivership in the Seoul District Court, according to market reports.
Patrick Hagen, Cologne - Friday 3 July 2009
BAD news from Hapag-Lloyd put pressure on the share price of Tui, the German tourism and shipping conglomerate, today.
Tui is the largest single shareholder in the container line.
Hapag-Lloyd came under further pressure from major shareholder and logistics tycoon Klaus-Michael Kühne, who told German press that he would not rule out the line asking for government help.
Revealing the critical financial situation at Germany’s largest container carrier, Mr Kühne said it would “certainly make sense” to apply for state aid.
He added that the help would then have to be approved quickly.
Hapag-Lloyd did not comment on Mr Kühne’s remarks. The company said earlier that it was considering options to secure its future
..... (a year before the movie On the Waterfront) to combat labor racketeering. It is held that the Gambino crime family controlled the New York waterfront and the Genovese crime family controlled the New Jersey side.
The Waterfront Commission of New York Harbor has the stink of a patronage swamp.
The bistate agency created to keep the harbor free of mob corruption is fending off allegations that its two top commissioners doled out plum jobs in a practice known as "horse trading," according to a knowledgeable source who has talked to investigators.
The claims are part of a wide-ranging corruption probe by the state inspector general, whose report is due out soon.
Wednesday, July 1, 2009
The mob, the feds and the ILA
Joseph Bonney | 1:46PM GMT
Federal prosecutors are ready to have another go at proving links between organized crime and the International Longshoremen's Association.
The venue will be federal court in Brooklyn, where reputed Genovese mobster Michael Coppola goes on trial next week for racketeering and conspiracy. Coppola’s alleged offenses include a 1977 mob murder, conspiracy to possess false identification during 11 years as a fugitive from that crime, and the use of extortion to control ILA Local 1235 in Newark from 1974 to 2007.
Most of the indictment against Coppola is devoted to the ILA racketeering charges. Prosecutors allege Coppola and his mob cohorts controlled three past presidents of Local 1235 and extorted money and favors, including jobs and contracts with mobbed-up firms.
Cernadas’s co-defendants in the 2005 case -- ILA officials Harold Daggett and Arthur Coffey and Genovese mobster Larry Ricci – were acquitted. Ricci, however, wasn’t around to celebrate the verdict. He vanished in mid-trial and his body was found weeks later in the trunk of a car parked outside a New Jersey diner. In court documents, prosecutors state that their informants say Ricci was murdered on mob orders to ensure his silence and that Coppola was involved.
.... prosecutors have said one likely witness is octogenarian labor racketeer George Barone, who testified for the government in the 2005 case. Barone, a onetime ILA vice president, was convicted in 1979 for shaking down Miami port businesses and testified that he committed several mob murders during his younger days but couldn’t recall how many.
Ransom payments for an individual vessel have jumped from less than $50,000 five years ago to over $3m today.
“The bottom line is that people are paying these ransoms and that is naturally fuelling the increasing demands,” said Mr Trelawny.
“It is being run as a business and the pirates are out to make money. If they see ransoms being met the natural instinct will be to raise the price.”
