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Greece Looks to Attract Shipping Companies
Thursday April 21, 7:22 am ET

ATHENS, Greece (AP) -- Greece's Merchant Marine Ministry presented a draft law Thursday that aims to promote the listing on the Athens Stock Exchange of Greek and foreign shipping companies or holding companies with links to the sector.

The law has a twofold aim, the ministry said: to improve the investment climate of the stock exchange and to promote Greece as a regional shipping center.

Greece's government is keen to strengthen the link between the country's large shipping sector and the economy. Shipping overtook tourism in 2004 as the country's biggest source of foreign income.

"A significant part of the capital acquired by (Greek) shipowners could be invested into the Greek economy," Finance Minister George Alogoskoufis said recently.

Conditions outlined in the legislation for a shipping company to list on the Athens bourse include: a total shipping tonnage of least 3,000 tons (3,307 U.S. tons) and total assets of at least euro29.35 million (US$38.3 million) in the year of listing. Ships must also be insured by internationally recognized insurance brokers.

Shipping companies that are already listed on foreign exchanges may still apply to list in Athens, the ministry said. Several Greek shipping companies are already listed abroad.
 

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Greek owned and flagged vessels constitute 20% of the worlds major cargo and tanker vessels. Pretty impressive for a small nation!
 

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China signs Greek port deal, vows more investment
26 November 2008

ATHENS, Nov 25 (Reuters) - Chinese President Hu Jintao vowed to increase maritime investment in Greece on Tuesday after the signing of a 3.4 billion euro ($4.4 billion) deal to run the country's largest port, despite protests from dockers.

Hu and Greek Prime Minister Costas Karamanlis witnessed the signing of the contract by state-controlled China Ocean Shipping Company (Cosco) to operate the container port of Piraeus (OLP) for 35 years, part of Greece's privatisation agenda.

"Our priorities are to widen our economic cooperation ... to strengthen maritime cooperation and investments," the Chinese leader told journalists, during a three-day state visit.

Greece controls one fifth of the world's merchant fleet. Its ship owners have profited from a huge boom in demand for iron ore, oil and grain from China in recent years, and they are the largest clients for Chinese shipbuilding yards.

Until a collapse in freight rates earlier this year, the boom helped Greece's economy grow by 4 percent a year for a decade.

"The agreement between OLP and Cosco signals a new important chapter," said Greek Prime Minister Costas Karamanlis. "Greek ports can become transit points for Chinese goods to the EU and southeast Europe, as well as the Mediterranean."

Several hundred dockworkers, carrying a banner reading "Cosco Go Home" and waving black flags, marched past the Greek parliament before the signing, saying the deal would mean job losses and tougher labour conditions.

"They must not sell the ports. OLP is a profitable business ... it doesn't make sense," said Manolis Gemeliaris, 54, an engineer at the port. "When Cosco comes, we will lose our jobs."

The Chinese company has insisted that it will create 1,000 new jobs at the port for Greek workers and more than double its capacity by 2015.

Hu, who toured the ancient temples of the Acropolis in central Athens with his wife on Tuesday, has insisted during his visit that China's economy is still experiencing "significant growth" and he would cooperate with international efforts to tackle the global economic downturn.

However, the World Bank said in a report published Tuesday that China's economic growth would slow to 7.5 percent next year, its lowest rate since 1990, despite a 4 trillion yuan ($586 billion) stimulus package.

Despite the opposition of Greece's restive unions, the conservative government is pressing ahead with privatisations and has put loss-making Olympic Airlines [OLY.UL] on the block.

The ruling New Democracy party, whose parliamentary majority was cut to one seat this month by the expulsion of a rebel deputy, has fallen behind in opinion polls for the first time since winning power in 2004 amid discontent at its economic policies. Many analysts expect an early election next year, ahead of a 2011 deadline.
 

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ANALYSIS-Greek shippers set to grow despite crisis at home

LONDON/ATHENS, April 1 (Reuters) - Greek ship owners are gearing up for expansion despite the economic turmoil at home and aim to capitalise on a downturn in the seaborne sector by snapping up vessel assets at lower prices.

As Greece struggles with mounting debt, shipping remains one of the few bright lights in an economy suffering its first recession in 16 years. Analysts expect Greek shippers to seek to position themselves ahead of any world recovery.

"Shipping is an international global business and what happens in Greece is going to have, in my view, very little impact on Greek ship owners," said Harry Theochari, head of transport with law firm Norton Rose. With the world's second-largest merchant fleet, shipping is one of the main drivers of Greece's 240 billion euro ($323.7 billion) economy after tourism. Unlike other sectors, the industry remains insulated from Greece's debt problems.

Greek shippers have been financially conservative, preserving their balance sheets during the downturn, and are adept at operating vessels at a lower cost to peers in tough conditions. Greek registered shipping companies are also exempt from paying tax on their income.

"There are many Greek ship owners with lots of money in the bank who are now sitting there and waiting for the right opportunity," said Theochari, whose company clients include financial institutions and ship owners.

With about 90 percent of the world's traded goods by volume transported by sea, the economic downturn has hit the global shipping sector hard. This has been compounded by a growing supply of vessels entering the dry bulk fleet.

Greek ship owners are major players in the dry bulk sector, which ferries commodities including iron ore and coal, and are active in the oil tanker market. Analysts say they are also looking for opportunities to grow in container shipping.

"I believe that 2010 will be a year of investment for Greek ship owners," Michael Boudouroglou, chief executive of Greek dry bulk group Paragon Shipping, told Reuters, adding it was looking for acquisitions.

"We are in a period of low ship prices," he said. "The challenge for us now is to find where and when we will invest our liquidity, smartly, wisely and in the most risk-free way."

"SEA WATER IN VEINS"

The value of a five-year old capesize vessel, the largest size of dry bulk ship, has plummeted to around $60 million from as much as $180 million in 2008 before the downturn.

Greece has the world's second-biggest merchant fleet after Japan with over 3,000 vessels estimated in its fleet.

"There are people who say we have sea water in our veins. If the right opportunities appear everyone will invest," said George Gratsos, head of the Hellenic Chamber of Shipping trade group.

Shipping accounted for about 5 percent of Greece's gross domestic product in 2009 versus over 7 percent in 2008 due to the global downturn. How the sector fares this year is crucial for the country, which is battling with a debt crisis.

"We estimate that the shipping sector will add 0.3 percentage points to Greece's GDP growth after a tough year," said National Bank of Greece economist Nikos Magginas.

"The recovery of developed economies, the strong momentum of the Chinese economy and the gradual upturn in world trade, will lead freight rates to higher levels compared with 2009."

BETTER PROSPECTS

Shipping officials and analysts say the ability of Greek shippers to take advantage of the downturn will also depend on their access to bank financing.

Data from financial services firm Petrofin showed that total loans related to Greek ship finance booked last year fell by nearly 9 percent to $67.02 billion from $73.23 billion in 2008. But Petrofin said there were signs that fresh lending had begun.

"On the lending side, we see things more optimistically from now on," George Xiradakis, head of shipping consultants XRTC, added. "Of course there is still a big drawback: liquidity is not strong and banks are still going through tough times."

Petrofin's managing director Ted Petropoulos said he expected 2010 to be a year of recovery but "not boom".

"With the gradual recovery of bank lending and the fact that the international shipping market is somehow stabilised ... we expect 2010 to be more intense in terms of purchases compared to 2009," he said. "Greeks may lead again in 2010 in terms of purchases."
 
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