HSH Nordbank AG, the world’s largest financier of ships, is stepping up efforts to unload billions in bad debt racked up during a seven-year glut in the global container fleet.
The bank based in Hamburg is looking to seal several transactions resulting in maritime companies taking over vessels from defaulting debtors, Wolfgang Topp, head of HSH’s restructuring unit, said in a phone interview.
“I expect that we will speedily wrap up – one, two, three – transactions with a gross value of 1.5 billion euros this year,” the former Deutsche Bank AG risk manager said.
A dispute over ship and charter prices thwarted attempts last year to replicate a similar $300 million deal with Greek shipowner Navios Group in 2013.
HSH’s Navios deal involved a partial sale of a shipping-loan book to the Piraeus, Greece-based company, which guaranteed to operate the 10 vessels for at least six years.
The remaining debt was converted into a multi-year loan during which HSH will receive 80 percent of the returns generated by the ships, excluding operating and capital costs.
The transaction allows HSH to dispose of nonperforming debt while speculating on a shipping market recovery to help it recoup the outstanding loan amount.
“From 2016, we expect to get money on our junior loan in the Navios deal,” Topp said.