The present financing squeeze from traditional lenders such as German and UK banks need not be a bad thing for Cyprus shipping companies, says Themis Papadopoulos, CEO, Interorient Shipmanagement. It ought to make companies think more rationally at a time when freight rates are on a cautious rise. The Cyprus Registry continues its strong showing, while compliance with low Sulphur fuel rules should be complete by early next year. As for rivalry in gas prospecting, the feeling is that a consensus will eventually prevail.
What is the situation at the Cyprus Ship Registry today? How has the major upcoming change in fuel in 2020 affected that specific sector?
The Cyprus Registry continues its solid performance. It remains one of the biggest in the world and the conversion of the Department of Merchant Shipping into the Shipping Deputy Ministry has already brought many tangible improvements and a better service to ship owners. I believe the 2020 low Sulphur regulation has been exhausted in its theoretical phase and what remains now for each owner and operator is to make their plans and to ensure that they are fully compliant by January. The advice that we get from the Cyprus Registry is to not expect a soft interpretation of the new regulation and to ensure that everyone is fully compliant at the appropriate time.
How is the banking system currently treating the shipping industry? Are things still tight and when do you see the bankers’ wallets opening up again?
It is no secret that there has been a significant reduction in the availability of financing for shipping, in particular from Germany and the UK who have historically had a large market share. It could be the case that some banks that were names long associated with ship finance may never re-enter this activity. As always through any challenging situation new opportunities should arise and we have seen a variety of newcomers providing perhaps different types of financing without what was historically the norm appearing on the scene. In particular there is an appetite in the Far East, mainly China, as well as from a number of different equity funds. The banks tightening their wallets for shipping is not entirely a bad thing as I predict that will be a contributing factor as we progress with rebalancing the supply and demand equation in terms of global tonnage.
How is the Cyprus Ship Registry being affected by the energy mobility that is being observed in the Cyprus EEZ area? Are you concerned about an altercation?
The discovery of hydro carbons in Cyprus’ EEZ is an exciting development not just for the island but also for the region more broadly as the Eastern Mediterranean seems poised to become a gas exporting hub. Although as always with these projects there are some delays compared to the initial expectations, we are slowly seeing a build-up of maritime activity which is being created to support the exploration and eventually production. While there are some geopolitical challenges which are well documented, I do believe that in the end there will be a consensus among the neighbouring countries here that will allow exploration to take place without hindrance.
How were 2018 and the first half of 2019 for your company? What are your plans and prospects?
Shipping continues to be unpredictable and volatile and 2018 was very much within that trend. Generally freight rates were somewhat suppressed but we have already seen improvements in 2019 that give optimism going forward. As a company we continue to seek the right opportunities to grow both on the ship management and on the owning side and we have managed, together with various partners, to complete some exciting projects. It is important going forward to have a little bit more clarity and visibility than is currently available in terms of upcoming carbon emission related regulations before making any big decisions.
Source: Shipping International Monthly Review Sept. 2019