Nepa Working Toward Dry Bulk Pool

Pappu Sastry, Managing Director at Nepa Projects and Investments says the dry bulk players could benefit from a pool in the face of a difficult market.

In the face of a difficult dry bulk market, Pappu Sastry, Managing Director at Nepa Projects and Investments (Nepa) says the company is looking to starting a dry bulk pool, noting that market players could benefit from such an arrangement, Seatrade Maritime reports.

"Dry bulk ship owners who have been in pools previously generally go one of two ways; either they hate the idea and will never deal with a pool again or they will like it but will not want to leave the pools they are already in," said Sastry.

While carrier pools are said to be utilised more often within the tanker segment when market conditions are challenging, dry bulk players are noted to be more less receptive to the idea.

Nepa's pool is said to be in the early stages operation, with two supramaxes and one newbuild ultramax already participating.

"We want to take over people who are taking on distressed assets and ship owners who want to reduce their operating costs of which there are quite a few in this market," said Sastry when noting that Nepa is looking for more vessels to join to a maximum of 15.

Sastry says that older supramax or handysize vessels, which are currently finding competition from new 37,000 DWT Green Dolphin handysize designs, are the type of vessel that are being sought for the pool.

The pool is reported to be expected to assist in restructuring debt and refinancing ships for those aiming to enhance their market position, as well as to aggregate assets in order to acquire assets at correct valuations.

"We do have the option of either taking over a ship into the pool or into technical management or just to help them refinancing their assets; we have a solution available for every need," explained Sastry.

With initial aims are said to be set on about $50 million in investments, Nepa Financial Services is said to be working mostly with investors who may not have been previously involved in the dry bulk segment or shipping in general.

In February, Ship & Bunker reported that Panamax and Supramax owners were placing their vessels under the control of shipping pool operators in order to stem losses resulting from a dramatic fall in dry bulk rates on the back of depressed commodities markets and the Chinese economic slowdown.