According to shipping experts banks are set to take tougher action against distressed shipowners this year, leading to a rise in loan foreclosures and lenders taking possession of vessels and all this at a time where the euro-zone crisis is still on the forefront along with considerable economic uncertainty.
Nevertheless, this move will mean more business for third-party ship managers, firms that take on the day-to-day management of vessels, including crewing, repairs and provisions, in return for a fee.
When a bank takes over the ownership of a vessel, since they do not have the expertise to manage the vessel, they turn to third-party ship management companies. Banks are showing more and more interest in taking over ships from shipowners that have declared default and instead of selling the vessel they assign the management of the vessel to ship management companies, waiting for the economic situation to improve and eventually sell the vessel in the future and at higher prices.
Wallem Shipmanagement is one such company that currently manages 21 vessel on behalf of banks. Other shipmanagement companies engaged in managing bank-related vessels include Anglo-Eastern Ship Management, V.Ships, Bernhard Schulte Shipmanagement, Univan and Fleet Management.
It is expected that within 2013 banks will exert more control over the shipping industry mainly due to the fact that defaults will most probably increase considering the overall economic uncertainty accompanied by further debt-to-equity ratio deterioration.
Sources: InterManager, South China Morning Post
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