From the Financial Times:
The shipping industry has endured its worst crisis in 25 years. But there are some signs it may be navigating its way out of choppy waters – not least a surge in the amount of “smart” money from private equity flowing into the sector.The record influx of funds so far this year is seen by many as a watershed after five years of weathering the storm that caused several ship operators and owners to collapse during the economic downturn.
Dagfinn Lunde, head of shipping at DVB, says the German bank has probably been the most active on private equity deals in the sector, providing the senior debt in various deals involving 45 buyout groups since 2010.He says typically these deals involve a private equity fund providing about 80 per cent of the equity to buy a ship, with the shipowner providing the rest. “That is new in the last three years. This year has been the most active, it is [spreading] like wildfire,” he says.
Until the financial crisis most shipowners could borrow enough from banks to cover $7 out of $10 towards the cost of buying new ships. But banks are now unlikely to lend much more than half – even to shipowners with very strong balance sheets – meaning they need to come up with more money, according to Urs Dur, managing director of Clarkson Capital Markets....MUCH MORE
