April 5 - Three Hamburg-based shipowners F. Laiesz, Norddeutsche Reederei H. Schuldt and Rickmers Reederei, with lawyer and restructuring professional Jan Duken, have established a programme to financially stabilise loss-making cargo ships - Frachtschiff-
Financial restructuring deals for cargo vessels are increasing being rejected by vessel owners because of pre-requisites from banks that require extra cash injections from owners. Frachtschiff-Kontor has developed a concept that it says serves the interests of all stakeholders tied into loss-making vessels.
Frachtschiff-Kontor purchases vessels operating at a loss and ensures short-term operational and financial stability. The existing financial structures are realigned according to future market expectations, with a goal of fully-refinancing the vessel in 3-5 years, or to sell the ship.
Since its formation in October 2012, the group has purchased four container vessels with a value of USD100 million. Deals valued at approximately USD150 million are waiting in the pipeline, according to Frachtschiff-Kontor. Banks that are already committed to the loss-making vessel provide debt financing. Ship management is provided by one of the three partner shipping lines.
Jan Duken, managing partner, explained: "It is a reasonable distribution of opportunity and risk between the existing shareholders, the banks and ourselves. The provision of our platform and the additional securitisation of the loans is what we bring into the equation.
"To our knowledge, we are the first recovery platform which has established a model that takes into account the interests of owners as well as banks and, in addition, has been approved by auditors," he added.
Frachtschiff-Kontor specialises in boxships, bulk carriers and heavy lift vessels but is also open to tankers and car carriers.
"With our model we are trying to contribute to the stabilisation of the German fleet and prevent a sell-out," Duken added.