Latest news from Heavy Lift & Project Forwarding International Magazine

Moore Stephens says shipping is ill prepared for bank meetings

April 20 - International accountancy firm and shipping adviser Moore Stephens has warned that some shipping companies are not adequately prepared to conduct successful negotiations with their banks which are likely to occur with increasing frequency.

Paul Edwards, a Moore Stephens corporate finance director, says, "Shipping is experiencing tough times. An increasing number of companies are unable to repay or, in some cases, even service their debts. That could mean an uncomfortable meeting with the bank. But too many companies are not properly prepared for such an encounter.

"Businesses must be able to produce properly documented and timely financial information for their stakeholders, which should include a view of the future. In good times, when charter rates exceeded operating expenses, little attention needed to be paid to future cash flows and debt service. But today, it is essential to be able to anticipate, to the extent that it is possible, future cash flows and pinch points.

"It is essential to provide banks with detailed information in the event that it becomes clear that a company may default on the terms of a loan. It is better still if this can be done before any covenants are breached or payments missed. In these difficult times, the key is for businesses to help banks to help them, by anticipating defaults or breaches and presenting a solution, rather than waiting for the default. This cannot be achieved without a proper financial model.

"Clearly, a model is not a panacea for difficult trading conditions, but working with a bank to present its credit committee with a potential solution, rather than with a problem, is more likely to engender a positive attitude to any restructuring."

Financial modelling is a key component of any renegotiation of facilities. A viable model, typically including integrated balance sheet, profit and loss account and cash flow statement, can help to support a restructuring proposal, by demonstrating the impact of changes on future cash flow, says Moore Stephens.

Paul Edwards adds: "Financial modelling doesn't change the economic fundamentals of a business. But it is a tool with which to identify ways to manage the impact of a volatile market. A good quality financial model is also an invaluable, ongoing management tool. It can be used to make longer-term strategic decisions and to determine the nature and structure of future investments and the potential returns on investment."

The issue of finance with the heavy lift and MPV fleet will be addressed in the forthcoming ships and shipping lines supplement which will appear in our May/June edition.

www.moorestephens.com

Heavy Lift | News

Wallenius SOL to add Vaasa call thumbnail image

Wallenius SOL to add Vaasa call

September 19 - Wallenius SOL – the joint venture of Wallenius and Swedish Orient Line (SOL) – will add Finland’s port of Vaasa to its regular liner network from November 2019.
Views: 154
CLG takes flight thumbnail image

CLG takes flight

September 19 - CargoLogic Germany (CLG) has been granted an Air Operator Certificate (AOC) by the German civil aviation authority and is ready to commence commercial operations.
Views: 116
ALG members move helicopter trio thumbnail image

ALG members move helicopter trio

September 19 - Talk Cargo, Compass Forwarding and Pan Logistics teamed up to transport three MD 600N helicopters from Turkey to the USA.
Views: 182
ABC and CLA go online thumbnail image

ABC and CLA go online

September 18 - Bookings for capacity on AirBridgeCargo (ABC) and CargoLogicAir (CLA) flights can now be completed via the cargo.one digital platform.
Views: 255

Heavy Lift Across The World

Discover heavy lift and project logistics industry news from around the world by region.