Cyprus Funds as a Solution for Maritime Finance Drainage

10 Apr

Cyprus Funds as a Solution for Maritime Finance Drainage

CIFA NEWSLETTER - Article by George Karatzias, FCCA and Senior Manager in Alter Domus Cyprus and Andreas Panayiotou, ACA Manager in Alter Domus Cyprus

For the first time since the global financial crisis of 2008 and 2009, the global ship industry seems to be recovering its upward pace. There is one critical factor however, either being totally unavailable or very hard to obtain for shipping companies which would drive recovery, which is financing.

When the markets came crashing down, subsequently affecting demand around the world, many prominent banks found themselves with significant exposures in now devalued loans offered in the shipping industry. Mostly affected by the downturn were the European banks which as at the end of 2017 were estimated to have US$150 billion of loans at risk devalued. This resulted in banks previously playing a big role in shipping finance to either abandon the industry whatsoever or be left battling to recover the inherited situation of devalued and non-performing loans given to the industry.

Following the financial crisis and the bitter experience of the banks in the past, the more stringent stress tests are further hindering the barriers imposed to banks, resulting to them being driven away despite the signs of an inclining industry.

Read the full article below

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