Gestioni Armatoriali: Speculative dry bulk investors slammed

Gestioni Armatoriali: Speculative dry bulk investors slammed

Ravenna: Gestioni Armatoriali is a shipping company based in Ravenna involved, as many others currently in Italy, in a debt restructuring procedure with banks. As of today its chairman Nicola Coccia seems to be more worried about speculative investor attacks rather than low market rates.

“Dry bulk is not dead,” he says, adding: “This shipping segment is progressively rebalancing thanks to demolitions and newbuilding conversions. It will take some time to experience a significant upturn in bulk carriers rates, nobody can say when it will happen, but sooner or later the market will rebound.”

Gestioni Armatoriali owns a fleet of 12 ships: 9 post-panamaxes and supramax bulk carriers and 3 handysize tankers built from 2006 to 2012.

The company was set up in 1993 by Nicola Coccia and Bruno Castaldo together with the Bazzi family, in order to start up a new industrial project in oil and chemical marine transportation. After an initial period during which the company chartered ships from the market, as from 1999 Gestioni Armatoriali became an owner and manager of oil tankers. From 2000 an extensive investment program of over $200m had been launched for the construction of nine double-hull oil tankers, and in 2006-2007 the company decided also to order new bulk carriers in China and South Korea.

Looking to the future of the dry bulk business, Coccia says: “It’s time now to stay strong in the market and be confident that the upturn will come. To do that is easier for those companies, like Gestioni Armatoriali, whose fleet is five years old on average since we will have time to take advantage of a future market with rates increasing. On the contrary, that is not the case for other shipping firms with old ships in their fleet and less time ahead.”

In Italy several companies active in the dry bulk business have closed their respective debt restructuring processes with banks in the recent past but Coccia underlines many agreements were based on an incorrect market outlook and analysis.

“At the present condition, doing previsions on the bulk carriers business it’s really hard for everyone and I think there is the risk that many restructurings already closed will need to be reopened in the near future,” Coccia says.

Even worse, he underlines that low charter rates are also depressing ship values, resulting in direct consequences on the shipping companies balance sheet in terms of asset depreciations.

By and large, Coccia seems not worried about banks actions (i.e. arresting and selling vessels at auction) but rather on the risk the lenders might sell their non-performing loans to speculative investors such as hedge funds. As of today Gestioni Armatoriali is one of the two Italy-based shipping companies which fell victim of speculative attack from a fund managed by Deutsche Bank that took over (at a discount) a debt worth some $90m from Commerzbank.

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