During the fourth RMSC webinar, MONEY was the focus. Is there still finance available for our sector? With an extensively experienced panel of Dutch bankers, we discussed the possibilities companies have to assure themselves of enough liquidity.
So far, the number of ‘casualties’ in shipping is limited, but with the current market outlook not being very positive, Peter de Jong of ING Bank urges clients to stay in close contact with the banks. There may be more willingness from the financial sector this time for support.
After the last financial crisis in 2008-2009, when banks were at the root of the crisis, the financial sector became strongly regulated – think about solvency requirements and compliance – therefore they were restricted in providing loans to the sector. This time the banks are in a much better position and may be able to help more extensively, even though asset finance remains restricted.
According to Michael de Visser of NIBC Bank, funding is still available for companies with a solid business plan and the right financing proposition. Especially when it concerns innovative ideas. Maybe at a bit higher margins, and maybe from new alternative finance providers, such as NESEC here in Rotterdam. Michiel Steeman of Zuyderzee Capital adds that with a good and realistic plan, companies can also turn to boutique banks and maritime funds.
One of the questions from the audience was if crowdfunding is an option for the maritime industry, since there is billions in savings accounts not receiving any interest. Consensus was that this may be, at this time, for the smaller projects in inland shipping or fishing but not for the typical sort of deepsea projects.
The second main topic of this webinar was about the newbuilding market and the Dutch shipbuilding industry. Growing attention for alternative fuels might create opportunities for shipyards and suppliers because they call for new and innovative propulsion systems. Government fund Invest NL is now focusing on inland shipping for example, which may be followed by short sea and deep sea projects as well. Trust between shipowner and financiers remains key.
An opportunity for the Dutch shipyards can be retrofitting, where next gen engines may be financed separately from the ship, so therefore no government support is necessary according to Michael de Visser.
The big question, according to Marjolein van Noort of the KVNR, (Royal Association of Netherlands Shipowners), is who will build and finance the first real green vessel. Michiel Steeman uses the example of the Airbus A380 to illustrates opportunities of alternative funding. The first plane was built with alternative investors, before the big commercial banks joined in. With COVID19 still very much affecting the sector, alternative finance might be the only way forward for a while.
Government intervention and global industry politics will play a more important role as well. Without COVID-19, IHC might not have been saved, so for shipowners a good lobby in The Hague will also be important.
RMSC thanks the speakers and moderator Raymond Ko of Marstrat for their time and insights and looks forward to a next event on this topic after the summer!