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“This is basically a banking crisis,” said Conti’s managing director Shaun Harbinson. “It is difficult to get financing, but we see no shipping crisis.”
Mr Harbinson expects that it will not be easy to get bank loans for newbuilding projects for the rest of the year. “The banks are very hesitant,” he said. “For speculative projects it would be next to impossible to find financing.”
Conti ordered four more 57,000 dwt bulkers in September and noticed that banks had already become more cautious.
“It took a long time until we had financial backing,” Mr Harbinson said. “The number of banks that were prepared to join was smaller than previously.”
In addition banks want to fix the syndication of the loans before they give a loan. “Now, we have to negotiate with several banks from the beginning,” he said.
The ships will be built at the Chinese Hantong yard and according to Mr Harbinson 12-year charters have been fixed for all vessels.
Mr Harbinson said that the shipping banks’ reluctance is due to a lack of liquidity and does not indicate that they are expecting hard times for shipping. “There is a basic willingness to give loans,” he said.
The company sees itself well prepared for the current market turmoil. Conti is known to be conservative in calculating new projects.
“We never ordered a tanker or a bulker without a fixed charter,” Mr Harbinson said. At the moment, Conti is satisfied with its orderbook. “We will not go on ordering aggressively during the coming months.”
“If we had a newbuilding project that we wanted to realise at all costs, the financing would probably work out due to our longstanding business relations with some banks, but I can’t say for sure,” Mr Harbinson added.
Mr Harbinson also sees no problems for the long-term prospects for the shipping industry.
“Basically, the charterers we are talking to are in a friendly mood,” he said. As shipping was a long-term business, one bad year would not be fatal. “The decision over a 15-year charter is not based on the current market situation,” he said.
The Conti-financed fleet currently consists of 84 vessels. Another 37 are on order, 30 of them are bulkers from handymax to post-panamax sizes. “We also looked at capesize bulkers but decided against it,” Mr Harbinson said.
Capesize bulkers were only economically viable for the transport of iron ore. The smaller sizes were more flexible and were able to transport a wide range of cargo from coal to scrap metal, he added.
Four of the vessels in Conti’s orderbook are tankers, a segment that the financing house wants to expand. Only three of the vessels on order are containerships, which are due for delivery in the next months.
“In the last two years we had no containership projects,” Mr Harbinson said. There has been a gap between construction costs declining charter rates, he added.
In the fleet of Conti-financed vessel, however, containerships are still in the majority with 75 compared to four product tankers, two gas tankers, one ocean-going cruiseship and two river cruise vessels.
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