FRANKFURT May 14 Commerzbank,
Germany's second-biggest lender, said it is considering
launching a platform to operate ships in a bid to recover higher
values from the vessels that it seizes after shipowners fail to
service their loans.
The goal of such a project would be to run the ships
together with partners for a limited time, Commerzbank said in
the prospectus of its capital increase published on Tuesday.
The shipping industry is facing difficult times because of
the economic downturn and a glut of new ships, which were
ordered during the boom years before 2008. Charter rates have
fallen below breakeven levels. The tough conditions have already
bankrupted several shipping firms and forced others to
Commerzbank would follow in the footsteps of German
shipowners Rickmers, F. Laeisz and H. Schuldt, which earlier
this year founded the firm Frachtschiff Kontor to specialise in
operating ships whose income does not suffice to service debt.
Frachtschiff Kontor currently operates four ships and aims
to minimise losses for owners and lenders by letting shipowners
avoid fire sales at times of depressed ship prices.
In a different move to recover higher value, Commerzbank
peer HSH Nordbank last month transferred ownership of
some vessels to U.S.-listed shipping company Navios,
receiving cash as well as participating loans that give HSH the
opportunity to recover the original amount if the markets
Commerzbank, which according to trade journal Marine Money
currently is the world's second-largest ship financier after DNB
, last week said it expected provisions for bad ship
loans to remain stable this year at the high levels seen over
the last four quarters.
It does not expect the shipping industry to rebound before
the second half of 2014, Chief Financial Officer Stephan Engels
said when presenting first-quarter results.
Commerzbank unit Deutsche Schiffsbank has ship loans worth
18.3 billion euros ($23.8 billion) on its books, 25 percent of
which are classified as non-performing.
First-quarter loan loss provisions of Deutsche Schiffsbank
stood at 138 million euros, up from 114 million in the
Such a platform would take Commerzbank's approach to dealing
with bad ship loans a step further. Until now the lender has in
a few cases mandated shipping firms to run vessels for the bank,
with the purpose of getting them into service again so that they
can earn money and pay down loans.
($1 = 0.7703 euros)
(Reporting by Arno Schuetze; editing by Jane Baird)