Shipping Market Financing: Special Features &amp; the Impact of Basel III

Sambracos, Evangelos; Maniati, Marina

doi:10.2139/ssrn.2337919

Cited by 5 publications

(3 citation statements)

References 3 publications

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“…When investigating the environmental aspect of the ESG concept (as developed further in the paper) regarding shipping, the first and fundamental challenge is the environmental regulations that all shipowners must comply with. Firms operating within the shipping sector must follow developments (Sambracos and Maniati 2015), be ahead of other companies, and once there are solutions available, they should be able to implement them (Romano and Yang 2022). This can be seen in various ways, depending on the company's profile: for smaller-sized maritime firms that are not as established, consolidated, and in a sound financial position, this can be challenging.…”

Section: Green Energy and Imo Regulationsmentioning

confidence: 99%

Financing for a Sustainable Dry Bulk Shipping Industry: What Are the Potential Routes for Financial Innovation in Sustainability and Alternative Energy in the Dry Bulk Shipping Industry?

Pangalos¹

2023

JRFM

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Environmental, regulatory, and economic exogenous disruptions force companies within the maritime shipping industry to become more sustainable. Financing for implementing the necessary changes is particularly challenging for these companies, considering their narrow margins. With the changes in the shipping industry being intrinsically capital-intensive, funding is a particular issue, as few institutional or individual investors can provide the capital required. This paper investigates the challenges of financing. Drawing from the theory of pecking order on debt and equity, it conceptualizes the relation between the modes of financing for the maritime shipping companies and the nature of the disruptions. Initially, we analyze the various IMO decarbonization regulations, GHG emissions, alternative fuels, and green energy. Moreover, the relationship between fleet operation and management and finance is explored. The paper provides a framework to illustrate from a financial perspective the plethora of challenges and disruptions that have troubled the industry. We then recommend more suitable funding routes for companies to gauge the proper mix of equity and debt levels, bonds, and leverage, based on the company’s characteristics, such as size or ESG performance, as analyzed via the lens of corporate financing, along with the nature of the disruption, such as high inflation or geopolitical conflicts. In more detail, the paper focuses on key environmental, social, and governance (ESG) drivers both in the short-term and the long-term within the dry bulk shipping industry: impact investing and ESG factors are driving new investment opportunities and contributing to risk mitigation and long-term investment returns. The most pressing financial and economic questions of the time are wildly extended equity and bond valuations, inflation, and the conundrum most central banks face. Given these uncertainties, from an investment perspective for equity markets, the risk/return outlook for risk assets is skewed to the downside, making a cautious approach prudent for maritime shipping companies.

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Section: Green Energy and Imo Regulationsmentioning

confidence: 99%

Financing for a Sustainable Dry Bulk Shipping Industry: What Are the Potential Routes for Financial Innovation in Sustainability and Alternative Energy in the Dry Bulk Shipping Industry?

Pangalos¹

2023

JRFM

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“…Moreover, as highlighted by Kavussanos and Marcoulis (2000b), the perception of the investment community regarding the riskiness of shipping stocks compared to other stocks, largely due to the highly volatile environment of the industry in which these firms operate further added to the stock market abstinence of shipping firms. Recently, however, the over-leverage issue along with the bank difficulties in providing adequate capital on a timely manner and in meeting the ever increasing legal requirements and tightening credit facilities; the elevated vessel prices; the demands for larger vessel sizes; the structural adjustments of shipping firms; the appetite for greater visibility and prestige to attract institutional and private investors; and the preference to international capital markets expressed by younger generations of ship-owners constitute some of the reasons that shifted the interest of several shipping firms from the traditional wherewithal of financing to equity financing and global markets (Sambracos and Maniati, 2013, Grammenos and Papapostolou, 2012, Syriopoulos, 2010.…”

Section: Iposmentioning

confidence: 99%

The Routledge Handbook of Maritime Management

Panayides¹

2019

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This paper provides a critical review of the ship investment literature in the last 30 years following 43 journal articles and book chapters. The review is based on a framework that synthesizes and integrates the literature in terms of timing and viability of shipping investment, raising of funds and managing the investment. Based on this review, a number of promising directions for future research are laid out through the identification of the major contributions and the progress that has been made so far with regards to the broader thematic area of shipping investments, as well as through highlighting important knowledge gaps that could potentially serve as a research agenda for the future.

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“…along with the bank difficulties in providing adequate capital on a timely manner and in meeting the ever increasing legal requirements and tightening credit facilities; the elevated vessel prices; the demands for larger vessel sizes; the structural adjustments of shipping firms; the appetite for greater visibility and prestige to attract institutional and private investors; and the preference to international capital markets expressed by younger generations of ship-owners constitute some of the reasons that shifted the interest of several shipping firms from the traditional wherewithal of financing to equity financing and global markets (Sambracos and Maniati, 2013, Grammenos and Papapostolou, 2012, Syriopoulos, 2010).…”

Section: Iposmentioning

confidence: 99%