Ship finance in the wake of Hanjin bankruptcy

By: | Issue #647 | at 08:00 AM | Channel(s): Liner Shipping  

Ship finance in the wake of Hanjin bankruptcy

Overcapacity continues to eat away at global shipping and that spells billions of dollars in non-performing loans. The Hanjin bankruptcy supplied ample evidence of what happens when banks finally pull the plug.

The Hanjin bankruptcy sent “a warning shot, big time, across [the bow of] the financial community,” said Paul Slater, managing director of the consultancy group Qorval, and a veteran in maritime financing.

Yet, reaction to the collapse of Hanjin has been anything but uniform. It’s not as if the bankruptcy triggered a worldwide freeze in ship-related finance, or even a major time-out.

In late October, the South Korean government announced it would create a state-owned ship financing company, with initial capital of almost $900 million. This is designed to underwrite the acquisition by South Korean shipping lines of new ships made in South Korean yards, which remains a massive part of the country’s economy.

Or take a hedge fund-type operation called Northern Shipping, which is based in Stamford, CT. In December, it announced that it closed on a new alternative finance fund aimed at shipping and offshore oil services. It was able to raise more than $500 million, $100 million more than its initial target.

Northern Shipping joins dozens of private equity firms and hedge funds attempting to cash in on cheap shipping assets and even cheaper debt…

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American Journal of Transportation