EMEA News
HSH Nordbank May Scrap 40 Seized Vessels
The world's largest shipping bank, Germany's HSH Nordbank AG, may need to scrap as many as 40 ships seized from clients over debt, Bloomberg reports.
"If a ship is no longer supported by its owners and we don't find a buyer, then an insolvency or scrapping of the vessel may become the last option," said bank spokesman Rune Hoffmann.
"Potentially 30 to 40 of the 1,100 vessels in the restructuring unit might be affected."
Of the 1,100 ships, about 165 are not salvageable, but the bank plans to sell the rest to investors to reduce its band loans.
The sales will be along the lines of a deal the bank made with Greek shipping company Navios Group, which paid $130 million for 40 percent of loans on five tankers and five container ships in April, converting the remaining $170 million of debt to a 10-year loan, with the bank receiving 80 percent of the ships' returns.
The bank has a total of €25 billion ($33.8 billion) in shipping loans.
HSH Nordbank has acknowledged that "grave mistakes were made" in lending to the shipping industry in the years leading up to the 2008-2009 shipping market crash.
