ContainersEuropeFinance and Insurance

20% of KG-funded boxships are insolvent

Nearly one in five containerships owned by KG funds in Germany are insolvent according to data released by research firm Deutsche Fondsresearch. There are approximately 1,800 KG funds, controlling around 2,200 containerships at present.

BSI, an association for German closed-end funds, said its members had the equivalent of about $17.5bn invested in shipping assets last year.

“The number of emergency sales and/or insolvencies will rise,” Deutsche Fondsresearch manager Marcel Wodrich told the Wall Street Journal today. “Fresh money from banks or investors is not in sight.”

In his most recent column for Splash, ship finance veteran Dagfinn Lunde discussed the KG system and its current woes, explaining: “The guarantees given by the KG houses for the loans for expected equity to be paid in, had in reality no value as in some cases the total obligation/guarantees by the KG houses were up to 200 times the equity value.”

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Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.
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