Moore Stephens sees opportunities for cash-rich buyers


For financially-sound buyers, 2010 will prove a likely year of opportunity according to shipping accountant and adviser Moore Stephens, as fallen asset prices leaves cheap purchasing potential wide open for hungry acquisitions.

“2010 will be a tough year for shipping, and toughest of all for the yards. But it will be a year of opportunity for anyone with cash and access to finance, as they pick up cheap assets from failing projects,” said Julian Wilkinson, Head of the Moore Stephens Shipping Industry Group.

Commenting how “in the shipyards, the shortage of credit is being used by ship owners to push back delivery dates and renegotiate contracts,” Mr Wilkinson indicated that gaps are being left open for those looking to acquire cheap tonnage.

Although most ship owners “expect tough markets for the next year,” he revealed that “a growing global economy, booming scrapping and a fast-diminishing orderbook-overhang may mean that the markets will be less tough than expected. Combine that with record low global interest rates, and things don’t look too bad for owners who are not over-extended.”

Mr Wilkinson added: “For the first time in a decade, shipping bankers can get a decent and certain return on their dollar. Credit is restricted, loan pricing is up strongly and no banker now has to look for an excuse to turn away marginal business. Stronger clients and higher margins point towards happier bankers, even more so where the banks foreclose on the weakest borrowers.”

Moore Stephens also highlighted how 2010 will be “the first year in which we will see a new kind of shipping finance, as cautious but forward-looking bankers begin to enquire about the environmental performance of ships and companies they are being asked to fund,” according to Mr Wilkinson. “Then we shall see a lot of people going green, and those without access to credit looking green with envy at those who have it.”

Although it will be some time before the IMO implements a shipping carbon tax or trading scheme, this year will see more green costs forced on to shipping. Already, there is pressure from charterers to measure the green performance of ships for reputation purposes and approval of the end-consumer, and while older and less fuel-efficient ships may struggle to secure charters and will face lower rates, forward-looking owners will be looking to invest in a green agenda.