SeaNews: Shipowners and shipbuilders are anticipating recovery after 2017 and after the negative market in 2016. What are your thoughts and how will the financial markets be affected?
Bülent Dandin: I do not think that the new regulations like WBT and Scrubber that will be applied in 2022 will gain clarity in the mind of the shipowner. The increased cost of shipbuilding due to these applications and the unpredictability of the investment return period are contradictory to shipbuilders’ expectations. I think that banks will be active in the financing of tanker projects in the future, from dry bulk financing to selective contracts and selective tonnage-specific works.
I believe that the recovery for 2017 and beyond will be determined by raw material prices and growth expectation in China.
-What is the risk perception of the ocean transport assets and is there a type of ship that seems less risky among others? How much willingness of the banks to take on the maritime investment risks?
- Ownership of a ship is the most risky of the investment areas. There are ship types that are considered less risky, of course, such as the floating ship-restaurant (!) That is connected to the shore. I mean, every floating object that moves 24/7 is at the same risk. Banks are not willing to open credit to shipping after 2008. In addition to fluctuations in market conditions, banks now understand that this is a business that requires expertise and that each bank should not. For this reason, banks that wish to exist in this sector are employing trained staff in this field.
- In the short and medium term, is it possible that the global shipbuilding specialist banks will return to shipping finance? How much financing will be available for small ships and shipowners?
-I do not think the banks will be willing in this matter. This is the segment with the hardest fluctuation and the lowest capital accumulation. Increasing interest rates by the FED in the coming period, reducing monetary expansion in the euro area, and possibly a possible downsizing of the FED, will make access to financing even more difficult.
-We all know that standards such as Basel 3 have come up with much more transparency. What are your recommendations to Turkish shipowners regarding the transparency requirements that banks expect in the future?
-We are always transparent as a company. I have no idea how other Turkish shipowners behaved. Greater emphasis on independent auditing and submission of supervised accounts on the bank’s world standards will be useful in every sense. Here is a question I would like to ask; How accurate would it be to evaluate Turkish maritime completely through shipyards and shipowners? I think this is something that should be considered. It is not very accurate to evaluate the sector through shipowners and shipyards. We have to change our view of maritime urgently. In other words, we have to shift the paradigm and build on the SME scale for ship technology. In my opinion, investing in marine technology is much more important than investing in ships or shipyards. It is indisputable that this area will contribute much more to the development of the country than to build a ship.
It is highly misleading to read the share of shipyard and freight revenue, which is thought to contribute to the year 2023 targets with the lack of this vision, which is unable to do and does not have the intention to do the equipment that makes up the ship. It is necessary to create designs and standards for equipment that can be manufactured and to coordinate existing sub-industry / SME structures.
-What are your views on the point that the ship financing environment in general has been in the last 10 years since 2008?
-The lenders are not in any negative attitude towards those who place their actions on the firms they finance.
I hear that they are asking for extra security for the companies they are having trouble with or for new companies in the sector, as well as lower loan to value (LTV) and financing of contract-based transactions in new shipbuilding projects.
-Thank you. ν