Also Italian shipowners turned to Chinese financial leases
According to Fumarola (Gestion Maritime), banks should pay more attention to second-hand vessels than to newbuildings
Credit institutions, especially in Europe, are leaving the shipping sector, the finance focal point is gradually moving towards Asia, mainly thanks to leasing companies, stock market listings in New York are few, while bonds remain one of the possible alternatives for those who want to launch new investment plans. This is the current scenario of the naval loans market described by Petrofin Bank Research, as it also emerged from the confrontation held at the Maritime Ceo Forum in Monte Carlo.
According to Petrofin’s data, the first 40 banks in the world dealing with shipping control an exposure slightly above 300 billion dollars, i.e. 44 billion less than the year before, achieving the new minimum record since 2008. European credit institutions are gradually disposing of non-performing loans, as it is already happening also in Italy. The only Italian bank included in the top-40 world’s list is the Unicredit Group, which still has a credit portfolio of 2.87 billion dollars in the naval sector, both in Italy and abroad. At present, the only active credit institutions present in the Italian market are BPER Banca and the “new entry” Iccrea Banca.
Since 2010, the market share of European institutions decreased from 83% to 58.7%, while Asiatic institutions are witnessing an increase in loans for investments in ships, holding 34.8% of total investments, while American banks are left with only 6.48%.
Therefore, Petrofin pointed out that the increasing growth of the world’s merchant fleet is supported by alternative financing sources, especially Chinese leasing companies, which achieved a 51.3 billion dollars (compared to 47 in 2017) exposure, thus keeping Chinese shipyards alive. Last year, stock market listings in New York and Oslo (the lists that used to be more sensitive to shipping) were few, while many are relying on the issuance of bonds as a new possibility to rake up capitals.
Watson Farley & Williams law firm partner lawyer Furio Samela confirmed this trend: “Due to the difficulties in obtaining financial resources from banks, shipowners had to use alternative financing sources”, including sale & leaseback, which is becoming increasingly popular among Italian shipowners. Our law firm is involved in several sale & leaseback transactions, and in the near future we expect this structure to become the most used financial instrument”.
Both d’Amico International Shipping and Scorpio Tankers are definitely the companies (Italian and Monegasque respectively) which, more than others, obtained capitals in this way.
In its analysis, Petrofin also observed that leasing is the only possible option for small-medium shipowners planning to make new investments. In the ferry market, for instance, Fratelli Onorato Armatori (belonging to Moby’s owner) was supported by Icbc Leasing in order to purchase the new ships built by the Chinese shipyard Gsi.