4 May 2012 08:54am

Shipping must look to new sources of finance

Global ship financing is undergoing its biggest transformation for decades, according to a KPMG report

The accounting giant says that the sector must become more transparent to attract new sources of financing.

The report “Ship financing in flux – searching for a new course” found that the overwhelming majority of respondents (90%) said that the future direction of the market will depend on “securing new equity sources” and almost two-thirds (62%) think the “transparency of company structures” will become increasingly important.

Economic stability and consolidation of shipping companies were key factors that will determine the future of the market in the report, which surveyed German merchant shipping companies.

The survey found that 64% of respondents have already taken steps to procure new equity capital sources.

John Luke, KPMG’s global head of shipping says, “Everyone involved in shipping will be aware of the impact of the credit crunch on the sector, either indirectly via suppressed demand from developed economies or directly via the tightening of credit. The banking sector’s current imperative to reduce its own balance sheets only exacerbates the depressed prospects for shipping in this context.”

“Many maritime lenders in particular appear to want to vote with their feet and exit the sector completely – if only they could. The demand for capital in the sector – to fund the order book and refinance existing borrowings – appears to far outstrip the supply from either operations or from the traditional sources of maritime capital."


Helen Roxburgh