ECONOMY

Coastal shipping sector looks around

The Greek coastal shipping sector is expected to undergo extensive readjustments in 2002, industry executives say. Everyone is talking with everybody, with a view to bigger operating schemes, Stelios Zambetakis, managing director of ANEK Lines, one of the two major operators of the Piraeus to Crete route, said last week. The prospect of realignments is primarily fueled by a choking debt-servicing burden, resulting from large loans obtained by most operators to purchase new vessels the last few years. Some are facing a liquidity problem, while others are said to be having difficulties in meeting obligations. Meanwhile, banks have already shut down the flow of funds and are pressing – particularly the smaller, financially-strapped companies – for alliances with other Greek or even foreign operators as a way out of the slump. For their part, the operators are asking for a rescheduling of debts and calling on the government for help in this direction. Despite higher revenues this year, the problem of debt servicing and liquidity is real, although in differing degrees among companies, said Zambetakis. Some exploratory contacts with foreign operators were said to have yielded positive results initially, but finally foundered on Greek objections to relinquishing managerial control. Operators are also strongly pressing for a revision of a draft bill on the deregulation of the industry, which would mean, at least in theory, the entry of foreign operators, in about a year’s time. The bill is currently being prepared by the Merchant Marine Ministry. Meanwhile, the Union of Coastal Shipowners (EEA) is planning to lodge a legal challenge for the abolition of the 35-year age limit for passenger ferries and against plans to lower it to 30 years. It is encouraged by recent statements by Merchant Marine Minister Giorgos Anomeritis, who said that the same regulations must apply in Greece as in other EU-members, where no such limits apply. EEA is also calling for greater freedom for operators to determine the composition of crews and for longer rest periods in the off-season. In another development yesterday, Anomeritis announced an end to the free transportation of mail by coastal shippers to and from the islands. He said a rate tariff for the Hellenic Postal Service will soon be published in the Government Gazette. The measure, coming in response to a long-standing demand by operators, combined with a review of widespread discounts on fares, are seen as willingness on the part of the ministry to change policy on the many small and large problems which plague the industry ahead of deregulation. Loan for Minoan Lines Minoan Lines has announced it has obtained perhaps the largest ever syndicated loan to a Greek coastal shipping operator. The 68.15-billion-drachma (200-million-euro), 10-year loan will be used to fund three new vessels, the Olympia Palace, Europa Palace and Ariadne. Five Greek and seven foreign banks are granting the loan: ABN Amro Bank, Alpha Bank, Citibank, Landesbank Schleswig-Holstein Girozentrale, National Bank of Greece, Nedship Bank, Commercial Bank, Piraeus Bank, General Bank, Frankfurter Sparkasse, Landesbank Saar Girozentrale and Natexis Banques Populaires. According to the company’s nine-month financial statements for 2001, its total liabilities stood at 190.8 billion drachmas,147.5 percent higher than at the same time last year. However, losses fell from 3 billion drachmas to 1.1 billion. On a consolidated basis, the group, which includes Hellas Flying Dolphin – the operator badly hit by the sinking of Express Samina in September 2000 in which some 80 people lost their lives – recorded a turnover of 41.3 billion drachmas in the nine months, up 3 billion from the same period last year. Operating profit was 6.8 billion drachmas, in line with management’s expectations, but net results reflected the burden of high financial (5.9 billion) and higher amortization expenses than last year (4.1 billion against 2.3 billion last year). General Manager Panayiotis Kassapakis said last week the group has no outstanding debts. Passenger traffic was up 24 percent in the nine months this year, while demand from private cars and trucks increased 3 and 9 percent respectively. The rise in business was mainly due to the introduction of two new, luxury ferries, the Knossos Palace and Festos Palace, on the Piraeus to Iraklion route, where passenger traffic rose 66 percent, cars 49 percent and trucks 34 percent.