Seacurus Daily: Top Ten Maritime News Stories 11/10/2016
1. Losses Triggering Write Downs
Alphaliner says that NYK Line’s move last week to report a loss of $972m on its containership assets could trigger a wave of write-downs at other lines as asset valuations fall to historic lows. NYK plans to report ¥195bn in extraordinary losses, with the ¥100bn write-down on containerships representing almost one quarter of its JP¥419bn valuation as at the end of March 2016. Panamax vessels have been worst hit in terms of the drop in asset values, with falls of up to 80% below the vessels’ depreciated book value assuming periodic impairments haven’t been applied. Other container sectors have faired better.
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2. Time to Act on Pollution
The on-time implementation (in 2020) of a global low-sulphur fuel law for ships would prevent 200,000 premature deaths globally. While oil and gas industry association IPIECA and a group of shipping companies represented by BIMCO, are pushing hard to delay the measure for five years, pressure groups claim the health study and clean fuel study make it clear that the 2020 data must be respected. The shipping and refinery industries have already had eight years to prepare and there are still three more years before final implementation in 2020. There are no more excuses for deadly inaction.”
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3. Unable to Make Payments
Singapore offshore firm Swissco Holdings told investors that it is unable to make coupon payments due next week on its S$100,000 5.7% notes due in 2018, according to Singapore’s Business Times. Swissco called an informal meeting yesterday, and despite appointing financial advisors Ernst & Young Solutions last week the company was unable to present a plan on how it might refinance or restructure. The company currently has four of its seven drilling rigs idle and the other three, jointly owned with Ezion Holdings, on hire but the charterer has not been making payments.
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4. The Great Fish Farm Escape
Danish anglers could be in for the fishing trip of their lives in a few days’ time, after a ship crashed into a fish farm and caused up to 80,000 rainbow trout to escape into the open sea. The cargo vessel, sailing from the Russian enclave of Kaliningrad on the Baltic Sea to Kolding in Denmark, collided with the fish farm between the Danish islands Funen and Jutland on Tuesday. The trout, weighing about 3 kg (6.6 lb) each, had been due to be slaughtered this week and were worth up to $1.5 million. “We will seek compensation from the shipowners,” Tim Petersen, co-owner and director at Snaptun Fisk said.
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5. Time for Disposal and Sell Off
The Seoul Central District Court overseeing the receivership filing of Hanjin Shipping Co. is considering a disposal of the sales-and-marketing network of the container line’s Asia-U.S. operations as part of efforts to raise funds at the indebted company. The plan was set in motion after a detailed evaluation of the company under bankruptcy protection indicated its assets could be more valuable if sold in parts, a court spokesman said by phone Tuesday. A sale would include employees and customers of Hanjin subsidiaries involved in handling Asia-U.S. cargo as well as some vessels, he said.
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6. New Capability and Intent
Two attacks against shipping in 8 days off Yemen indicates that a group has the capability and intent to attack shipping in the Strait. Maritime experts believe that it is unlikely that the missiles will be deliberately fired at innocent merchant traffic but does not rule out the possibility that a merchant vessel could suffer collateral damage if it happened to be in the vicinity of an attack on a coalition naval vessel. Commercial vessels in the region of Yemen should operate under a heightened state of alert, as the threat may come from a variety of different sources such as missiles, projectiles or waterborne improvised explosive devices.
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7. Liberia Makes Key Appointments
The Liberian Registry has announced strategic new appointments in a number of the key areas within the global network of offices operated by its US-based manager, the Liberian International Ship & Corporate Registry (LISCR). Gerard Kenny has been appointed Technical Manager of Liberian Registry’s London office, where he will primarily serve as a technical advisor to the Liberian delegations to the IMO. LISCR CEO Scott Bergeron says, “As the Liberian Registry grows from strength to strength, it is essential for us to ensure that we are able to maintain our ability to provide a high level of service regardless of fleet size".
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8. Prolonged Lender Fears
German ship lenders are facing increasing risks from the prolonged global shipping industry crisis, with their exposure to the industry remaining significantly higher than that of their European and many global peers, says Moody’s Investors Service in a new report. Moody’s report, entitled “German Ship Lenders — Peer Comparison: Large exposure to the shipping sector will require further provisioning,” is available on www.moodys.com. The report states, “These banks face the risk of persistently high loan-loss provisioning, downward pressure on their profitability, and their ability to build capital.”
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9. Another Ship of Shame
Mining giant Rio Tinto has been linked to a second so-called "ship of shame" detained by Australian authorities for failure to pay crew wages. For the second time in as many months, the Australian Maritime Safety Authority (AMSA) has detained a foreign-owned vessel off Gladstone in central Queensland. AMSA acted against the Indian-owned "Maratha Paramount" on Friday after an inspection of the bulk carrier by the International Transport Workers Federation. ITF National Coordinator Dean Summers says the captain admitted the 22 Indian crew had not been paid for more than two months.
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10. Good Fuel Fears Rise
The industry is underestimating the risk from the increasingly poorer quality assessments of distillate fuels, says Rahul Choudhuri, Managing Director – Asia, ME & Africa, VPS. "If you look at the last two years, distillate fuel quality is changing," he told delegates last week who had gathered at SIBCON. "Issues like high pour point fuels, low flash point fuels, low viscosity fuels are pretty much common place, and this is a clear trend that we can’t avoid." Managing fuel quality needs have a global focus. Fuel quality performance gets more critical on a global stage, and advanced data analysis will become more important going ahead.
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Daily news feed from Seacurus Ltd – providers of MLC crew insurance solutions www.seacurus.com
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S Jones
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