EMEA News
New "Niche" Bank to Fund Fuel-Efficient Newbuilds
A startup bank in Europe is seeking to offer financing for fuel-efficient newbuilds, the Wall Street Journal reports.
Shipping executives in Oslo plan to launch the institution, to be called the Marine & Merchant Bank, in an effort to fill the gap created after the 2008 financial crisis when traditional lenders moved away from lending to the shipping industry.
"Up until a year ago, the idea to start a niche bank for shipping would be laughable," said one of the people involved in the new bank.
"But after a six-year slump we see record scrapping levels of older ships, and a growing appetite for new-technology, fuel-efficient vessels makes us confident that there is space for a specialized lender in Europe."
The bank is expected to start operations next summer with $6 million in capital and then raise about $300 million in an initial public offering, the source said.
In recent years, European ship owners have turned to Chinese state banks and other Asian sources for financing, and the new bank seeks to bring that lending business back to Europe while also focusing on smaller fleet owners who may have more trouble getting loans.
"Shipping finance has been falling in Europe and on the rise in China," said Jonathan Roach, a senior container analyst for Braemar Seascope.
"We see startups there like China International Marine Containers, which recently bought 25 new container ships, which will be leased to European liner operators.
"There is also movement by private-equity firms to finance ships in the U.S., and the feeling is that something like that can also work in Europe."
Scorpio Tankers of Monaco said in August that it is borrowing $429.6 million to finance newbuildings through the Export-Import Bank of Korea (KEXIM).
