Marine Log - January 2009 - (Page 18)

BY MITCHELL LAX THAT SINKING FEELING European yards: bank behavior “irresponsible” SOLID AND PROFITABLE ship projects in European yards are being endangered by the lack of available working capital from banks, according to a leading organization that represents virtually all of Europe’s shipbuilding capacity. The Community of European Shipyards’ Associations (CESA), whose members represent about 300 shipyards in the European Union, Norway and Croatia, says the economic crisis has caused the flow of orders for new large cargo T oday there are many questions revolving around marine financing. First and foremost is whether or not any marine financing exists. In the current environment, with bank failures and takeovers, government bailouts and tougher credit standards, one wonders if there are any funds available for marine financing. The short answer is “Yes, but.” Yes, but the availability of funds is much reduced from years past. Yes, but the cost of financing is greater as the difference between benchmark rates and commercial rates has continued to widen. Yes, but all viable projects will not get funded as lenders can pick and choose which projects to fund. Yes, but the terms of lender commitments may be subject to renegotiation to better reflect the ever changing market conditions. Therefore, it is essential to present the lender with a well developed request that will demonstrate the strengths and feasibility of your project. The first step in developing a convincing proposal is to determine if you have a need for financing. The need is quite obvious when you are constructing or acquiring equipment. (Even if there is adequate cash on hand to pay for these costs it may still be advantageous to finance a portion of the project.) However, there are some less obvious http://www.eagle.org

Table of Contents Feed for the Digital Edition of Marine Log - January 2009

Marine Log - January 2009 Contents Editorial Second Thoughts Update Inside Washington What's On Your Hull? That Sinking Feeling Newsmakers Tech News Contracts Wake Up Call From Mumbai Events Security Guide Vietnam Stretches its Portfolio ML Buyer's Guide ML Marketplace Marine Salvage

Marine Log - January 2009

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