Tuesday, May 05, 2009
Hellas: Morgan Stanley fund to invest in shipping
Tuesday, 05 May 2009
Morgan Stanley is to set up an opportunity fund to take advantage of the global downturn in shipping by investing up to $400m (£267m) in dry bulk and container ships. The bank is working with two Greek shipping organisations to create the debt fund which will target distressed investments in shipping. The fund is aiming to invest in shipping debt that could be sold off for as much as a 60pc discount.
Although the market for large ships has stagnated in recent months, with buyers demanding far bigger discounts than sellers are prepared to offer, distressed sellers are expected to come to the market shortly under pressure from their lenders.
Industry analysts estimate there is up to $600bn of debt attached to ships and the shipping industry, much of it originated from specialist German banks, although UK banks including RBS have been active in this area.
With the volume of global trade falling sharply, many of these ships have been lying empty, filling up ports such as Singapore.
However, running costs and servicing debt on these ships is significant even when they are empty.
The fall in global trade has led to the price of a standard Cape Ship falling from as much $150m at the peak of the market to closer to $50m, putting significant pressure on debt providers that have backed these purchases.
The Morgan Stanley fund is expected to target investing in up to 40 of these ships, mainly through buying up debt.
The bank is hoping to sign an agreement with its Greek shipping partners this week.
Source: Telegraph
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