Italy’s shipping fraternity was relieved to hear last week that banks are again interested in the sector.

Opening the way for confirmation from the banks present at the Naples meeting ‘Shipping And The Law’, Fabrizio Vettosi, MD of Venice Shipping and Logistics, said: “I get the feeling that here in Italy, or south of Europe, we don’t have a very clear perception of how commercial banks, shipping banks are back. In Asia, all the European banks are fighting to get one single deal and they are fighting until the last bids, so good deals are receiving a high level of interest from all the commercial banks.”

Rory Hussey, ING managing director confirmed: “Certainly, in most of Europe, the shipping banks are back.” He said that while some of the UK (HBOS, RBS) and German Landesbanks have been lost or wounded, there are strong Scandinavian backers, such as Nord.

Hussey said it had been ING’s most active year: “From most European banks I think the message is that we, as a corporate bank, have under lent. We are being told to go out and lend. It’s finding the deals to do.”

Asked if ING would finance a new build, he said: “Absolutely” but explained that striking the deal would depend on who the owner is. “If we were asked to lend 65% on a Supramax, I would ask: Who is the owner? Not: What is the vessel?”

Christoforos Dimakis, Credit Suisse vice president for ship finance (South, East Europe and Middle East) said he was “fully convinced” that banks “will continue to be the main source of leverage for this industry for the foreseeable future. I do not see a change soon.”

Managing director of Italian investment bank Mediobanca, Maria Teresa Iardella, said she was “surprised at how much interest there is from investors in this sector”.

While her bank is new to the sector, she said the “good news is that there is a lot of liquidity in the market and a lot of appetite from the investor side”.

She said the issue was not whether finance is available but whether companies have sustainable business plans. She said that for companies with sustainable business plans: “I feel financing is available,” she said.

She added that many companies in Italy have the problem of being smaller than some of their European counterparts. She advised companies to “try to grow” so that they could “answer the capital market”, to “reduce costs” and to “be efficient and able to compete”.

Welcoming the news from the banks, Mariella Bottiglieri, managing director of Giuseppe Bottiglieri said she hoped it would stop shipping companies courting private equity, which latter she compared to a bad relationship.

“I am glad to hear that the banking system is back. The lack of banking system support has made private equity so popular – it was the only alternative around. The relationship between a pure ship owner – let’s say the Italian way of being a ship owner – and private equity, is simply a marriage that doesn’t work. Private equity is looking for its return in the very short term and the ship owner is looking to the next 20 years; private equity doesn’t at all care where the ship owner is going to be in 20 years’ time. So it’s as if there’s a woman who wants a marriage for life and there’s a guy who wants a one night stand. It’s as simple as that,” she said.

The long-term approach is a better fit for banks, one ship finance representative from Nord LB told IHS Maritime: “We like to be able to put the folder in the cupboard and know that the money will come in regularly,” she said.

She added that she did not personally favour private equity for shipping, as its demand for returns in three to five years led to “gambling”. But she said that banks “would have to adapt” if shipping companies decided to reject the traditional long-term model of returns on investment and restructure themselves to achieve profits in shorter timescales.

Girija Shettar

Speakers at the Shipping and the Law conference in Italy have warned today against regional regulation and giving the EU too much control over the shipping industry.

In his opening speech on the second day of the event in Naples, shipowner Emanuele Grimaldi called on the industry to regulate itself, rooting out sub-standard operators to avoid “knee-jerk regulations” from the EU.

Shipping is still not “out of the woods” economically yet banks have “not taken the trouble to clean up their balance sheets”, allowing bad operators to thrive, he argued.

“We should always be reminded of our obligations to safety and the environment… These require constant commitment, investment, and management focus,” he said.

He asked the audience to consider the potential repercussions of another environmental disaster. In his view, European regulators would then “have no hesitation” in clamping down.

The second opening speaker, John C Lyras, ex-president and current member of the Board of the Union of Greek Shipowners and a board member of the European Community Shipowners’ Association, issued a rallying cry for the shipping and maritime community to lobby governments and European MEPs for greater “transparency and democracy” in creating regulations.

Shipping is now caught up in a turf wars between EU institutions, involving “unconstitutional proceedings that do not allow for proper, bona fide consultation with the shipping industry”, he said.

“The devil is in the detail” of regulations and new rules should be worked out fully with the shipping community before they reach the IMO, he added.

He also warned against regionalism, which he argued is affected the integrity “of the IMO itself”.

Regional regulation is becoming “endemic” in the Northwestern hemisphere and Australia, he argued.

“In the era of globalisation, there are [still those] adopting a regional stance,” he said.

Regionalism and unilateralism is often “though not exclusively” in the environmental area, he added.

In his view, situation is becoming unworkable for ships that call at different ports of the world: “Ships are not elastic entities” but need global rules.

He added that it was “worrisome” that unilateral regional measures and “aspirational regulations” increasingly “go beyond” international rules.

Girija Shettar