A recent Ballast Water Implementation Forum, hosted jointly by the UK Chamber of Shipping and Fathom Maritime Intelligence, gaveexperts in financing a platform to delievr insight into the challenges that ship owners face when planning existing vessel retrofits with ballast water management systems (BWMS) in today’s market.
According to Alan McCarthy, an Independent Consultant and finance expert, “if the deal is good enough, money will be made available”. At the moment there is a lack of cash flow and thee weak markets mean that financing is tricky. Although the markets will self-correct, and cash will eventually be available, at the current time there are few banks actively involved in financing small to medium size shipping companies, stated McCarthy.
Furthermore, increasing regulations within a fragmented shipping industry means that banks feel penalised when investing their own capital, and therefore “we need to ween ourselves off borrowing money from banks”, McCarthy pointed out.
The most important thing to do now is to make sure that corporate cases are presented to banks where their support is still needed, McCarthy said. And despite the uncertainty, it is important to not portray this to banks or export credit agencies as uncertainty in the maritime industry does not work towards ship owners’ advantages to acquiring capital.
Short-term funding is even more difficult but this is where capital is needed. Making a case to a bank is therefore much easier in theory than in practise as equipment depreciates over the remaining useful life of the ship, McCarthy stated.
McCarthy also urged ship owners to go to suppliers directly and see what credit agencies are available and what they offer in order to increase their chance of gaining financing for equipment.
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