Chinese ship financing, especially leasing, has increasingly become an important financing source for Greek shipowners, which are known for their great skills in asset play. In a Greek owner panel at Marine Money’s event in Shanghai on Tuesday, representatives said they believe this trend will continue in the next few years.
Jerry Kalogiratos, CEO of Capital Product Partners, said he had seen Chinese financial leasing grow substantially in the past three to four years, turning the old expensive financing structures into something more flexible with more competitive terms.
However, Kalogiratos reckons as time goes by, there will be more standardisation in the sector.
“They definitely have many advantages but the end product might not be what we are seeing today,” Kalogiratos said.
Robert Perri, CFO of TMS Cardiff Gas, also agreed that Chinese leasing houses have become very aggressive in the past couple of years. They will be there in the market for a long term but their European competitors have not given up, Perri suggested.
“Looking at the western side, the commercial lenders are also getting more aggressive as they realise they need to stay in the business. They became more dependent and are offering higher leverages, lower margin than they used to. The export credit agencies (ECAs) are also become more dependent,” Perri said.
John Fostiropoulos, director of Almi Tankers, reckoned that Chinese leasing companies offer good products on the market, but in the long term, Fostiropoulos warned Chinese leasing companies must discipline themselves when the market get better.
“They need to know the language, if they keep giving the same leverage at high market, they will definitely be bled out,” Fostiropoulos said.
James Chen, director of Smarine Advisers, pointed out that there is limited human resources in the Chinese leasing industry, and the learning curve for them is steep.
“With limited resources, they tend to do larger scale projects. But going forward, they will try to do more medium size projects, in which European banks are not actively involved,” Chen said.