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Friday 18 December 2015

Good opportunities for offshore investors to acquire distressed assets

Shipping and offshore specialist law firm Wikborg Rein says current low oil prices could mean there are bargains to be had for investors in the offshore sector who follow recommended procedures for assessing and acquiring distressed companies.

Birgitte Karlsen, a partner in the London offices of Wikborg Rein, says, “The prolonged period of low oil prices, combined with reduced investment and contract awards, is taking its toll on oil service companies in the North Sea and elsewhere. For some, this may be a time of opportunity when bargains can be had, generating attractive rewards for cash-rich investors. But it is important to be aware of the risks involved in trying to acquire distressed businesses.

“These days, oil service companies may be in varying stages of distress, ranging from a negative cashflow situation through to default, with a formal court-appointed debt restructuring or bankruptcy process in place. Time is of the essence as the distressed business either has an immediate need for assistance and funding or has already defaulted on its obligations.”

Finn Bjørnstad, a partner in Wikborg Rein’s Oslo offices, adds, “If the target company is not listed, the buyer will have significant flexibility as to how to approach and structure an acquisition. The acquisition may include both debt and equity, and new equity may be used to buy back debt at a discount. Good planning and an understanding of the stakeholders’ position, as well as the dynamics of the market, are essential.

“Some companies may already be subject to Chapter 11-type proceedings, in one or more jurisdictions, and it is essential to understand the legal implications of such proceedings with regard to approval by creditors, potential subsequent annulment of the transaction, and timing aspects. Experience shows that the legal implications in many jurisdictions are less predictable and more complicated than expected. Buyers should seek expert legal advice in preparing an effective acquisition strategy with as few surprises as possible.”

“A listed company will in most cases be subject to either government or stock- exchange takeover regulations. On the Oslo Stock Exchange, for instance, a voluntary takeover offer usually takes between four to six weeks to complete, and can take longer if the desired acceptance level is not reached at the expiry of the offer period. In the event that the listed company has a concentrated shareholder structure, a straight and quick block trade acquisition of the majority of the shares in the target company may be possible in certain cases. Such majority acquisition will in most instances trigger a mandatory takeover offer to the remaining shareholders.”

Birgitte Karlsen concludes, “There is currently a definite upside to buying distressed businesses in the offshore sector which the right buyers may be able to exploit, provided they are fully aware of the risks involved before entering into negotiations.”

Wikborg Rein is a pre-eminent law firm in the shipping and offshore sector, and a major player on the international scene. Services to the maritime industry include ship, project and lease finance, corporate, contract negotiation, offshore and construction projects, sale and purchase, ship registration, insurance, casualty response, carriage of goods, ship arrest and international dispute resolution. More information on the firm and its partners can be found at www.wr.no

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Thursday 17 December 2015

Moore Stephens reports small decline in shipping confidence

Overall confidence levels in the shipping industry fell in the three months to November 2015, according to the latest Shipping Confidence Survey from international accountant and shipping adviser Moore Stephens.

The average confidence level expressed by respondents in the markets in which they operate was 5.6 on a scale of 1 (low) to 10 (high). This compares to the 5.9 recorded in August 2015. The survey was launched in May 2008 with a confidence rating of 6.8.

All main categories of respondent recorded a fall in confidence this time, most notably charterers (down from 6.5 to 5.5). The confidence of managers was down from 6.4 to 5.8, that of brokers from 5.2 to 4.6, and that of owners from 5.8 to 5.7. Geographically, confidence was up in Asia, from 5.8 to 6.0, but down in Europe from 5.9 to 5.4, and in North America from 6.3 to 5.7.

Many respondents expressed continuing concern about overtonnaging and excess shipbuilding capacity. One observed, “The over-ordering of ships by investment funds, together with the huge shipbuilding capacity created by China, are not conducive to an orderly market, with the result that shipping investments remain very risky.” Another noted, “As a result of excess shipbuilding capacity and the low cost of finance, shipping markets have been suffering from over-supply for years. We can only hope for strong growth in demand to improve the situation.” The cost of regulatory compliance, meanwhile, was referenced by a number of respondents, with one commenting, “Environmental regulations will continue to drive costs and uncertainty.”

Looking ahead, one respondent said, “2016 and 2017 are going to be tough,” while another remarked, “Unless and until the global economy starts to improve, things are unlikely to change significantly.” Elsewhere, however, it was noted, “Major economies are stabilising and improving, so global trade will respond, which will lead to an improvement in the shipping markets.” In similar vein, another respondent said, “Shipping will always be a major part of world business, and will retain its importance as a result of recent political developments.”

A number of respondents commented on the effect of current low oil prices, with one emphasising, “The precipitous fall in oil prices has poured cold water over LNG-fuelled ship design. While the application of LNG makes sense from an environmental point of view, the additional capital expenditure is not justified unless oil prices go up to previous levels.”

The likelihood of respondents making a major investment or significant development over the next 12 months was down on the previous survey, on a scale of 1 to 10, from 5.3 to 5.2. Charterers, managers and brokers were less confident in this regard than they were three months ago, but the confidence of owners was up, from 5.5 to 5.7. One respondent said, “The sooner funds that have no clue how shipping is run leave the market, the better. Shipping should be run by shipowners and not fund managers.” Elsewhere it was noted, “A lot of shipowners are like investors in the stock market. Even though common sense tells them they may be making a bad investment, they would rather take the risk than miss out on a possible upturn in the market.” Yet another respondent said, “Smart owners wait until rates are low and buy used ships at low prices.”

The number of respondents who expected finance costs to increase over the next 12 months was down by one percentage point on last time, to 47 %. The number of owners anticipating dearer finance fell by 18 percentage points to 35 %, but the number of charterers of like mind rose to 67 %, from 50 % previously. One respondent said, “We need a more realistic approach from those banks which are helping to keep zombie companies afloat.”

Demand trends, competition and port congestion featured as the top three factors cited by respondents as those likely to influence performance most significantly over the coming 12 months. The numbers were down by four percentage points (to 21 %) for competition, which was pushed into second place by demand trends, where there was a one percentage point increase, to 24 %, in the figures. Port congestion, up 15 percentage points to a new survey high of 17 %, featured in third place, followed by finance costs, in respect of which there was a four percentage point drop to 14 %. Regulation (up five percentage points to 9 %) featured in fifth place, followed by operating costs (down five percentage points to 6 %). Fuel costs featured as a significant factor for just 4 % of respondents, compared to a survey high of 16 % in May 2011.

One respondent said, “Excessive regulation makes control of costs even more difficult. Furthermore, what is the point of creating rules when international authorities cannot agree how to apply them, such as in the case of ballast water management?”

There was a fall in the number of respondents anticipating higher freight rates in the tanker, dry bulk and container ship sectors compared to the figures for August 2015. The net sentiment was nevertheless positive (+7) in the tanker market and in the dry bulk sector (+16), although negative (-5) for container ships.

One respondent said, “Many tanker owners are guided more by hope than by economics. When statistics indicate a tonnage shortage in two years’ time, they order ships now in the hope that freight rates will be higher once the ships have been built. But if other owners do the same, overcapacity will result in low rates and a fall in vessel values – a lose-lose situation.”

Elsewhere, it was noted, “Overall confidence in the state of the dry bulk market is currently very low, and any hope of the start of a recovery is at least 12 months away.” In the container ship sector, meanwhile,
one respondent commented, “Many owners of container ships seem to order new tonnage whether it makes economic sense or not, just to maintain market share.”

Moore Stephens shipping partner Richard Greiner says, “The inherent volatility of the shipping industry is part of its appeal to investors, for whom there is seldom any reward without risk. But confidence historically fluctuates more in a volatile market than in a stable one, and shipping is nothing but volatile at the moment. The small drop in industry confidence levels over the three months to end-November is therefore not a great surprise.

“Global unrest in general, and in particular the crisis involving Syria, does nothing to help confidence in industries such as shipping, which operate across international borders. Neither does the migrant crisis in Europe, which has escalated significantly in recent months, nor the Paris bombings. Shipping must expect to suffer the downside of such incidents just as, in better times, it can expect to benefit from positive geopolitical changes.

“Informed awareness and the ability to react in a timely manner are the best defence against external influences on the industry. But what of those other inhibitors of shipping confidence, which might be said to be of the industry’s own making? Firstly, there is the over-arching problem of excess tonnage. There are too many ships to carry the available cargoes. Doubts also persist about the level of newbuilding orders at a time when the market does not look to be in a good position to sustain them.

“Only increased ship recycling and rationalisation of business plans can effectively address these issues, and the need to take a proactive approach is borne out by the current state of the markets. The tanker market is producing comparatively good earnings at the moment, but its fortunes are too closely linked to the price of oil for anybody to accurately predict how long this will last. Expectations of improved rates over the next 12 months in the three main tonnage categories covered by the survey are down. In the case of the dry bulk sector, such expectations are at their lowest since August 2012, while in the container ship market one has to go back to October 2008 to find a lower figure. Indeed, our respondents recorded an overall negative sentiment in respect of the container ship market.

“This paints a rather austere picture for the immediate future of the industry, which is also facing the burgeoning challenge of funding regulatory compliance with the imminent entry into force of the Ballast Water Management convention. But it is by no means all bad news. Operating costs fell in both 2013 and 2014, which is evidence of the application of a measure of control which shipping has not been accustomed to seeing in recent years. Meanwhile, 50 % of those shipowners who responded to our confidence survey rated at 7 out of 10 or higher the prospect of making a major investment over the next 12 months. Owners were also much more confident than they were three months ago that ship finance was going to be cheaper over the coming 12 months.

“Well-informed owners and investors are not in the habit of throwing money away on lost causes. Shipping remains a good business to be in, its continued existence assured by its singular capabilities. The outlook remains volatile, but exciting.”

The Moore Stephens Shipping Confidence Survey includes responses from key players worldwide in the international shipping industry to a targeted, web-based survey by the Moore Stephens Shipping Industry Group. Responses were received from owners, charterers, brokers, advisers, managers and others. Editors can apply for a copy of the survey by emailing chris@merlinco.com

Moore Stephens LLP is noted for a number of industry specialisations and is widely acknowledged as a leading shipping, offshore maritime and insurance adviser. Moore Stephens LLP is a member firm of Moore Stephens International Limited, one of the world's leading accounting and consulting associations, with 626 offices of independent member firms in 103 countries, employing 26,290 people and generating revenues in 2014 of $2.7 billion. www.moorestephens.co.uk

For more information:
Richard Greiner
Moore Stephens LLP
Tel: +44 (0)20 7334 9191
richard.greiner@moorestephens.com

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Wednesday 16 December 2015

RINA Group delivers Ballast Water Management guidance

International classification society RINA has completely revised and updated its guidance on the Ballast Water Convention and the procurement, installation, operation and certification of Ballast Water Treatment Systems. The guidance is now available to shipowners, shipyards and equipment manufacturers as a Technical Bulletin.

Dino Cervetto, Director of Technical Services, RINA Services, says, “The IMO Ballast Water Convention is almost certainly going to come into force in 2016. Following the recent ratifications if the IMO confirms that the trigger point has been reached, the BWM Convention will enter into force on 24 November 2016. Owners need to make themselves aware of major impending changes to ballast water regulation and RINA’s guidance will help them with that.”
The BWM Convention imposes a challenging ballast water discharge standard. In response to this, a number of technologies have been developed and commercialized by different manufacturers. These systems have to be tested and approved in accordance with the relevant IMO Guidelines.
In addition to the IMO, other national bodies have introduced regulations in response to national concerns. The most influential of these is the United States Coast Guard (USCG), which has established both regulations and guidelines to prevent the introduction and spread of aquatic nuisance species into US waters.
The US and IMO BWM Convention requirements impose technical and operational challenges on shipowners, shipyards and equipment manufacturers.
RINA’s Technical Bulletin “Ballast Water Convention and Ballast Water Treatment Systems Guidance on procurement, installation, operation and certification” gives an overview of the BWM Convention and US requirements and provides detailed information on the implementation dates for both of them, taking into account the USCG official interpretations and clarifications. An extensive part of the Bulletin guides owners and operators in preparing for this implementation, including what to consider when selecting, procuring and installing a ballast water treatment system in order to ensure compliance with the applicable rules and interpretations.

For a copy of the Guidance e mail dino.cervetto@rina.org or contact your local RINA office.


RINA Services is the RINA group company which delivers ship classification, and testing, inspection and certification services. www.rina.org
RINA is a multi-national group which delivers verification, certification, conformity assessment, marine classification, environmental enhancement, product testing, site and vendor supervision, training and engineering consultancy across a wide range of industries and services. RINA operates through a network of companies covering Marine, Energy, Infrastructures & Construction, Transport & Logistics, Food & Agriculture, Environment & Sustainability, Finance & Public Institutions and Business Governance. With a turnover of over 330 million Euros in 2014, over 2,750 employees, and 163 offices in 60 countries worldwide, RINA is recognized as an authoritative member of key international organizations and an important contributor to the development of new legislative standards. www.rinagroup.org
           
Contacts:
Giulia Faravelli
Head of Media & Internal Communication RINA
+39 010 5385505

Victoria Silvestri
Media Relations RINA
+39 010 5385555

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Thursday 10 December 2015

Bureau Veritas issues international pilotage certification to Port of Cork

Leading classification society Bureau Veritas has issued its first certificate under the ISPO (International Standard for Maritime Pilot Organizations) standard of best practice for pilots and pilot organizations to the Pilotage Authority, Port of Cork, Ireland. The ISPO certification covers the Pilotage services and Vessel Traffic Management System.

The ISPO is an accessible industry specific standard, managed by a group of users, that improves safety and quality and provides transparency to shipowners and stakeholders on pilotage standards.

Philippe Donche-Gay, Executive Vice-President and Head of Bureau Veritas Marine & Offshore division, says, “The Port of Cork has adopted this industry code as a means of building continuous improvement into its pilotage operations. Bureau Veritas is pleased to be able to audit the pilotage and support this initiative. It is part of our own continual drive to support and deliver services which help shipowners and the marine community operate more effectively.”

Paul O’Regan, Harbour Master, Port of Cork, says, “Port of Cork Pilots have always been at the forefront of the industry when adapting to change and in consistently achieving the highest levels of safety and operational standards. The accreditation by Bureau Veritas from ISPO recognises the fact that the Cork Pilots and Pilotage Authority have, for many years, had a systematic approach to achieving first class port operations. The Port Company and Cork Pilots have worked hard with BV over the last twelve months in order to meet the requirements of ISPO and I believe this standard will achieve global recognition. The pilots and ports that achieve ISPO will be best placed to meet the needs of our maritime customers.”

The ISPO certification for the Port of Cork covers twelve pilots which safely managed mixed marine traffic handling over 9 million tonnes of cargo and 56 cruise ship calls during 2015.
To download a hi-res photo of a Cork Pilot disembarking go to http://bit.ly/1OjycN7 or e mail john@merlinco.com


Bureau Veritas is a world-leading provider in testing, inspection and certification. Created in 1828, the Group has more than 66,500 employees in around 1,400 offices and laboratories located all across the world. Bureau Veritas helps its clients to improve their performance by offering services and innovative solutions in order to ensure that their assets, products, infrastructure and processes meet standards and regulations in terms of quality, health and safety, environmental protection and social responsibility. Bureau Veritas is listed on Euronext Paris and belongs to the Next 20 index. Compartment A, ISIN code FR 0006174348, stock symbol: BVI.
For more information, visit www.bureauveritas.com/marine-and-offshore

Marine client portal www.veristar.com
  

For more information:

Philippe Boisson
Bureau Veritas
+33 (0)1 55 24 71 98


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Monday 7 December 2015

OSD develops new RLWI / IMR Vessel for Upstream - Austin Offshore

OSD-IMT, the UK division of Netherlands-based Offshore Ship Designers (OSD), is designing two 120 m IMT9120 Riserless Light Well Intervention / IMR vessels for Austin Offshore Pte Ltd, the shipping arm of Upstream Drilling Pte Ltd, Singapore.

 


The diesel-electric propulsion vessels are intended to carry out riserless light well intervention, light construction, subsea installation, inspection maintenance and repair of subsea installations. They can deploy three ROVs, and have a 250-tonne-capacity AHC crane as well as a travelling gantry well intervention tower system. The 9,500 dwt vessels have accommodation for 140 persons. Dimensions are 120 m LOA, and 30 m beam with an operational draft of 7.5 m.

 

The vessels will be built by China Merchants Industry Holdings Co Ltd, Hong Kong, China, under a contract with Singapore-based Upstream - Austin Offshore Pte Ltd signed at the Marintec Conference and Exhibition in Shanghai on Wednesday, 2 December, 2015.

 

Artist impression

Offshore Ship Designers Group (OSD) is a global one-stop resource delivering naval architecture and marine engineering skills to the shipping and offshore energy industries. It draws on an experienced global workforce to provide high-quality feasibility studies, conceptual and detailed designs for tugs and offshore support vessels of all types. OSD is based in IJmuiden, The Netherlands, and has offices in Dundee, York, Appledore, Shanghai and Singapore. www.offshoreshipdesigners.com

 

For more information:

Merijn Brusselers

Offshore Ship Designers

+31 (0)255 54 50 70

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Wednesday 2 December 2015

RINA launches R&D/Innovation Centre in Greece

RINA Hellas, the Greece-based arm of the international RINA Group, is opening a dedicated research and innovation centre in Piraeus. RINA’s R&D/Innovation Centre will boost the research and innovation activities of RINA worldwide and will explore further research opportunities in Greece and Cyprus, in close cooperation with the strong maritime community in the region. 
Initially the RINA Hellas R&D/Innovation Centre is participating in an EC research proposal under the HORIZON 2020 scheme. This proposal brings together an international consortium to develop models and tools for the holistic optimization of ships’ life cycles.
Spyros Zolotas, RINA Area Manager for Greece and Cyprus, says, “RINA is committed to providing high quality services and to being in the forefront of technological developments so as to assist its clients perform better in today’s competitive market. The R&D/Innovation Centre in Piraeus will add a new higher dimension and extend the range of services offered in the area though the Piraeus Marine, the Plan Approval Centre, the Marine Technical Support Centre, the Yachting Centre and RINA Academy Hellas.”
Stefanos Chatzinikolaou has been appointed to lead the Centre. He is a Naval Architect and Marine Engineer, with a background of ten years as a research engineer at the National Technical University of Athens, working in several EC-funded and other research projects.
RINA Services is already active in R&D and will present the AnNa Project, a current EU project, in Athens on 4-5 December 2015.
Mario Dogliani, Manager of RINA Connecting Europe Facilities (CEF) Projects, says, “AnNa (Advanced National Networks for Administrations) is a TEN-T Multi-Annual Programme co-financed by the European Commission. Its overall objective is the adoption of the national Maritime Single Window and electronic data transmission for the fulfilment of reporting requirements for vessels entering and departing European ports in accordance with EC Directive 2010/65/EU.”
RINA Services is the RINA group company which delivers ship classification, and testing, inspection and certification services. RINA is a multi-national group which delivers verification, certification, conformity assessment, marine classification, environmental enhancement, product testing, site and vendor supervision, training and engineering consultancy across a wide range of industries and services. RINA operates through a network of companies covering Marine, Energy, Infrastructures & Construction, Transport & Logistics, Food & Agriculture, Environment & Sustainability, Finance & Public Institutions and Business Governance. With a turnover of over 330 million Euros in 2014, over 2,750 employees, and 163 offices in 60 countries worldwide, RINA is recognized as an authoritative member of key international organizations and an important contributor to the development of new legislative standards. www.rina.org

For more information:

Spyridon Zolotas
Stefanos Chatzinikolaou
RINA Hellas


Giulia Faravelli
Head of Media & Internal Communication RINA
+39 010 5385505

Victoria Silvestri
Media Relations RINA
+39 010 5385555

Tuesday 1 December 2015

Bomb-proof bag to deliver safer passenger planes


Italy-based D’Appolonia, the engineering arm of the RINA group, has developed and patented a bomb-proof bag which will improve aircraft safety.
Fly-Bag is a flexible bomb-proof container which airlines can use to contain luggage and cargo in the holds of passenger planes. The innovative fabric of the bag contains the blast and stops it from destroying the aircraft structure.
Roberto Carpaneto, CEO, D’Appolonia, says, “This new generation fabric container marks a turning point in aviation safety. It is light and flexible enough to be used on all aircraft and full scale tests have proven that it will protect aircraft and passengers from explosions caused by any explosives hidden in the baggage.”
The Fly-Bag comes in different sizes all made from fabrics and compounds resistant to the major dynamic and thermal impacts generated by an explosion. Unlike a rigid blast-proof container it weighs very little and is flexible for confined spaces making it ideal for use in aircraft where weight and space are crucial. It works by absorbing the shock wave from the explosion through a mechanism controlling the deformation of the multilayer fabric with which it is made. The Fly Bag has several layers each with a specific function: fragment retention, absorption of shock wave and fire-resistance.
 The Fly Bag has been produced as a prototype in three versions:
·        for holds in narrow-body aircraft (Airbus A320 type, normally used for regional flights),
·        for baggage containers, normally in aluminium, used in large-body aircraft (Boeing 747 type, used for intercontinental flights),
·        for small explosive materials which may be found in the passenger cabin.
The system is covered by an international patent and is certified by EASA, the European Aviation Safety Agency.
See a full scale test on this You Tube link:
For photos of Fly Bag go to http://bit.ly/1FCPnZb or email  john@merlinco.com

D’Appolonia S.p.A provides integrated engineering services to the public and private markets in the areas of the environment, oil and gas, infrastructure and transport, electronics and telecommunications. D’Appolonia is part of the RINA Group, a leading international classification, verification and certification provider. www.dappolonia.it
RINA is a multi-national group which delivers verification, certification, conformity assessment, marine classification, environmental enhancement, product testing, site and vendor supervision, training and engineering consultancy across a wide range of industries and services. RINA operates through a network of companies covering Marine, Energy, Infrastructures & Construction, Transport & Logistics, Food & Agriculture, Environment & Sustainability, Finance & Public Institutions and Business Governance. With a turnover of over 330 million Euros in 2014, over 2,750 employees, and 163 offices in 60 countries worldwide, RINA is recognized as an authoritative member of key international organizations and an important contributor to the development of new legislative standards. www.rina.org
           
Contacts:
Giulia Faravelli
Head of Media & Internal Communication RINA
+39 010 5385505

Victoria Silvestri
Media Relations RINA
+39 010 5385555

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