Funds eye troubled shipping
Investment groups managing funds of up to $2 billion are looking at Greece in search of opportunities in shipping now that the sector has been significantly hurt by the financial crisis. The value of ships, especially of those carrying dry cargo, has declined by about 60 percent on average, which makes them particularly attractive for investment. Estimates put the total amount of debt in the sector at over $600 billion. Therefore, the news that Morgan Stanley is in advanced negotiations to invest about $400 million euros with the cooperation of Greek banking and shipping groups has hardly surprised anyone, given the leading role of Greek shipping in the industry. Sources suggest that Morgan Stanley’s interest has focused on dry-bulk and container ships, which are those that have suffered most from the crisis. It appears it is now also interested in buying out bad loans, to offer them at a significant discount or possibly acquiring ships from companies with cash flow problems. There are similar intentions from other groups as well. Merrill Lynch and the investment fund Alterna are secretly cooperating with a major shipbrokering firm in Piraeus. JP Morgan Asset Management also recently announced its interest in shipping, stressing that the sector is currently in a worse position than real estate. Last week, the Cypriot-owned SFS Group created a shipping fund in association with Kuwait Finance House, aiming at direct investments in state-of-the-art vessels booked for the long term by major and solvent charterers. Aimed to last seven years, the fund will invest a total of $150 million.
