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Moore Stephens envisages increased pressure for incipient impairment in shipping
Leading accountant and shipping industry adviser Moore Stephens says it expects to see an increase in the sort of pressure recently exerted on shipping companies by the US Securities and Exchange Commission (SEC) to make disclosure when the market value of their vessels is less than their carrying value.
ECISE
The pressure for this type of disclosure, often referred to as ‘incipient impairment’, has been reflected in the 2011 filings of many SEC registrants. Moore Stephens partner David Chopping says, “The SEC has seen impairment charges in the accounts of a number of shipping companies in the last few years. But it has apparently not seen quite as many as it might have been expecting. It is easy to understand why the SEC, and others, might consider disclosure of market value to be useful information and want to see it more widely disseminated. It is more objective than valuations based on management estimates, it is more comparable across companies, and it sets benchmarks against which companies’ own policies can be assessed. Indeed, for some parties, the information might seem far more important than valuations based on projected future income streams.
“At the same time, it is equally easy to visualise objections to such disclosure. Values are to be determined on an unfixed basis, so are arguably of only limited relevance where vessels are fixed for fairly long periods with high-quality charterers. Similarly, while values may look comparable, if the fixture position differs significantly, then such comparability might be considered spurious. And even if a vessel is operating in the spot market, or a fixture is going to be ending shortly, whilst other objections might be less compelling, there are still concerns about the volatility of market values. How relevant is a valuation at a point of time in a volatile market where an asset might have many years still to operate?
“Nonetheless, it seems very unlikely that the SEC will change its mind and decide that such disclosure is not useful. It is far more likely that other bodies, and indeed investors, will start expecting to see such information. This can happen without any need for changes in the rules, and indeed the SEC has not explicitly changed the disclosure requirements. It seems to have relied more on the ‘Al Capone’ approach of a kind word; everyone already knows it has a gun!”
l Moore Stephens LLP is noted for a number of industry specialisations and is widely acknowledged as a leading shipping and insurance adviser. Moore Stephens LLP is a member firm of Moore Stephens International Limited, one of the world's leading accounting and consulting associations, with 636 offices of independent member firms in 100 countries, employing 21,197 people and generating revenues in 2011 of $2.3 billion. http://www.moorestephens.co.uk/
For more information:
David Chopping, Moore Stephens LLP
Tel: +44 (0)20 7334 9191
Labels: disclosure, impairment, Moore Stephens, SEC, shipping, vessel market values
Graig takes delivery of first of handysize pair
Cardiff-based
Graig Group has taken delivery of the 35,000 dwt handysize bulk carrier Graig
Cardiff, the first of two Seahorse 35 class vessels building for Graig and
partners at Jiangdong Shipyard, Wu Hu, China.
The
Graig Cardiff is entered into the Lauritzen Bulkers pool and is currently on
her maiden voyage from Shanghai to Argentina. Her sister vessel, the Graig
Rotterdam, is due for delivery later this year. Both vessels have been
constructed under the supervision of Graig China Limited and will be managed by
Graig's ship management divisions in Cardiff and Shanghai. Both vessels will
operate with a full Chinese crew.
Hugh Williams, CEO, Graig Group, says, “This delivery
is a significant step in our phased reinvestment into shipowning. We are
confident that the design is economical and practical for charterers, we know
it is well built because we supervised it ourselves and we are confident in our
Chinese crewing and management operation which are delivering excellent results
in service for the Chinese-owned vessels we already manage. We believe this and
its sister vessel will deliver value for money in the charter market.”
The Graig Cardiff’s main parameters are economical and efficient operation, environmental
friendliness and maintenance, safety, loading flexibility and shallow draft. The
cargo capacity is divided into five flush double skinned cargo holds with wide
hatches and no hopper tanktops, ensuring easy access and cleaning. The hatches
are served by four 30 tonne SWL wire-luffing cargo cranes and remote-
controlled grabs.
Short
turn-around time is achieved by effective cargo hold cleaning by portable
washing machines. Outlets of water and compressed air are arranged in all cargo
holds at tanktop-level. A permanent washing water return line is arranged in
each cargo hold at tanktop level. Two cargo hold washing water holding tanks
arranged for temporary storage enable cargo hold cleaning in sensitive and
restricted areas.
The
complete double-skin configuration ensures easy access to structural
inspection, even when the vessel is loaded.
A slender after body and a high efficient propeller ensures
optimal performance with minimum fuel oil consumption. A vertical stem is designed
to improve the fuel efficiency in adverse weather conditions. Frequency-controlled SW cooling pumps reduce
power consumption by 70 per cent
and waste heat recovery on two of the three generators obviates the need to run the
boiler when slow steaming.
Principal
dimensions
Length OA 180.0
m
Breadth 30.0 m
Scantling draft
10.1 m
DWT at scantling
draft 35,000 tonnes
The vessel is propelled
by a MAN B&W 5S50MC-C engine giving a loaded service speed of 14 knots
consuming 25 tonnes per day.
There is a total
crew of 21. The vessel is DNV class and flies the UK flag.
Graig has active ship management divisions in Shanghai
and Cardiff and has unrivalled experience working with Chinese shipyards. It
has built for its own account or advised on and supervised over 130 ships in
Chinese yards and currently manages a number of vessels built in China for
different investors.
For a photo of the Graig Cardiff e mail john@merlinco.com or download from http://bit.ly/LKtdtO
The Graig Group is a broad-based international shipping services, ship
owning, and offshore group delivering technical ship management and commercial
ship management, newbuilding supervision, offshore support services, expert
consultancy, dry-dock management, ship inspections, lay-up services, ship
design, ship owning joint ventures and ship finance to global clients who
appreciate personal service.
Graig has been building, managing and owning ships since 1919. Today it
provides technical and commercial management and crewing for a mixed fleet of
vessels on behalf of a number of owners and banks and has supervised over 130
newbuildings for itself and major shipowners.
Graig provides technical consultancy and management support services to
two major banks with a financed fleet of over 100 vessels and also to a number
of flag states. It develops innovative
designs such as the Diamond bulk carriers and the Marlin fuel efficient
container ships. It can source yards and
finance for all vessel types and provide newbuilding supervision and follow up
with in service management.
Graig employs a global maritime workforce drawn from the UK, China, the
Philippines, Vietnam, India and Russia and has offices in Cardiff, London, Oslo
Shanghai and Hong Kong. Graig Group
staff bridge the gap between sea and shore, between east and west to bring the
best in innovation, service and partnership to the global shipping industry. www.graig.com
For further information contact:
Chris Williams
Graig
Graig and GMI team up to deliver safe havens for shipping lenders
The
Cardiff-based Graig Group has teamed
up with Global Maritime Investments to provide shipping lenders with tailor-made
solutions for problematic shipping exposures. Working together the two groups will
provide lenders with workout solutions, safe havens and exit routes for
distressed assets and underperforming shipping portfolios. The joint approach
brings together the long-term ship management experience and bank contacts of
Graig and the outstanding freight market expertise of GMI.
Hugh Williams, CEO, Graig Group, says, “This is a slow
burn crisis for shipping banks and it is by no means over. Banks are currently
only really lending to offshore and LNG projects, while nursing portfolios of
tankers and bulkers which may be under the water in value terms and in many
cases are underperforming as loans. They want a lot of ships off their books or
under better commercial and technical management and with GMI alongside us we
can deliver that. We know there is a queue of ship managers outside every
banker’s door offering technical ship management, and there is private equity
in the market place looking to pick up opportunities. This link up with GMI
brings the two together in a powerful combination which can apply technical
knowhow and commercial presence to help banks clean up their portfolios.”
Steve Rodley, Managing Partner of GMI says, “Our large
physical portfolio and robust freight management systems provide a low-risk
pool for tonnage, which is why we are the charterer of choice for risk-savvy
counterparties. Extending this expertise
into managed services is straightforward and offers an optimal solution to
current market challenges. We chose to
work with Graig due to their recognised excellence in technical management, in
order to offer the best available product to the market.”
Graig has active ship management divisions in Cardiff
and Shanghai and has close links with significant shipping banks. It provides
regular inspection services and technical support to two major shipping banks.
GMI is one of the largest freight trading groups in the world and consistently
provides an outstanding risk-adjusted return to its institutional shareholders.
·
The Graig Group is a
broad-based international shipping services, ship owning, and offshore group
delivering technical ship management and commercial ship management,
newbuilding supervision, offshore support services, expert consultancy,
dry-dock management, ship inspections, lay-up services, ship design, ship
owning joint ventures and ship finance to global clients who appreciate
personal service.
Graig has been building, managing and owning ships
since 1919. Today it provides technical and commercial management and crewing
for a mixed fleet of vessels on behalf of a number of owners and banks and has
supervised over 100 newbuildings for itself and major shipowners. Graig provides technical consultancy and
management support services to two major banks with a financed fleet of over
100 vessels and also to a number of flag states. It develops innovative designs such as the
Diamond bulk carriers and the Marlin fuel efficient container ships. It can source yards and finance for all
vessel types and provide newbuilding supervision and follow up with in service
management.
Graig employs a global maritime workforce drawn from
the UK, China, the Philippines, Vietnam, India and Russia and has offices in
Cardiff, London, Oslo Shanghai and Hong Kong.
Graig Group staff bridge the gap between sea and shore, between east and
west to bring the best in innovation, service and partnership to the global
shipping industry.
· The Global
Maritime Investments Group is one of the largest privately-owned freight
trading groups in the world in terms of both size of fleet operated and
turnover, typically operating 60 to 80 dry bulk vessels. GMI is financed by
major institutional shareholders.
GMI employs around 30
professionals based in Athens, Cayman Islands, Cyprus, London, Monaco and Singapore with expertise in
physical freight trading and chartering, freight futures hedging and trading,
fund management and commodity and shipping finance. www.gmilimited.com
For
further information contact:
Chris
Williams
Graig
+44
2920 440 200
chris.williams@graig.com
Steve
Rodley
GMI
+44
207 842 4990
steverodley@gmilimited.com
Moore Stephens warns on internal model validation deadline
LEADING accountant and insurance consultant Moore Stephens has warned that time is of the essence for those firms in the insurance industry needing to obtain independent verification of their internal models ahead of Solvency II implementation.
David Edison, head of Moore Stephens’ actuarial team, says, “Building and implementing a robust internal model is just one part of the challenge facing the insurance industry under the FSA’s Internal Model Approval Process (IMAP). Obtaining independent validation of the model is quite another. With Solvency II due to enter into force on 1 January, 2014, time is of the essence.
“Independent validation sits at the heart of the model approval process. Validation applies to all aspects of the model, including the modelling process, statistical and data issues and the governance process around it. It is a broad concept not just focusing on the calculation kernel but encompassing both the quantitative and qualitative aspects. Moreover, it is not a one-off requirement. The FSA, together with other regulators, requires that internal models be reviewed on an ongoing basis, to take account of changes after initial validation.
“Validation is a bespoke undertaking. Requirements will vary from firm to firm, depending on volume and complexity of business, among other things. Validation cannot be carried out overnight. Nor can it be undertaken by those who have been involved in building and developing a firm’s model. Many firms lack personnel with the technical expertise to carry out validation and who fall within acceptable independence parameters, especially the scarce actuarial resource facing today’s insurance industry.
“Internal model verification must be seen as an asset, not an imposition. It is not simply a question of meeting regulatory requirements. It is also about maximising commercial efficiency and maintaining a competitive edge.”
l Moore Stephens LLP is noted for a number of industry specialisations and is widely acknowledged as a leading shipping and insurance adviser. Moore Stephens LLP is a member firm of Moore Stephens International Limited, one of the world's leading accounting and consulting networks, with 636 offices of independent member firms in 100 countries, employing 21,197 people and generating revenues in 2011 of $2.3 billion. http://www.moorestephens.co.uk/
For more information:
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David Edison, Moore Stephens LLP
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Tel: +44 (0)20 7334 9191
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Labels: FSA, Insurance, internal model validation, Moore Stephens, Solvency II
OSD secures new PSV contracts in China and Japan
Offshore Ship Designers UK division OSD-IMT has been awarded a contract to supply the design for a modified version of its IMT 982 Platform Supply Vessel to be built at the new shipyard facility of Honghua Offshore Oil & Gas Equipment in Jiangsu, China.
The contract is the result of increased marketing and technical collaboration between OSD group companies. It is contracted through OSD-Shanghai, with OSD-Singapore providing design engineering technical support to OSD Shanghai for design modification. The basic class-approved design documentation and design licence is provided by OSD-IMT Ltd, Montrose, UK.
The 83.2-metre long PSV has a deck area of 900 m² and can carry 1330 m³ of fuel oil, 800 m³ of potable fresh water, 980 m³ of liquid mud/brine, 1350 m³ of drill water/water ballast, 265 m³ of dry bulk and 170 m³ of base oil. It has a maximum load deadweight of about 4,000 tonnes at 6.0 m draught.
A diesel electric propulsion system is fitted comprising four main diesel generators, 2 x 1900 kW frequency controlled electric motor-driven azimuth thrusters for main propulsion and 2 x 800 kW frequency controlled electric motor driven tunnel thrusters fitted forward. The vessel is classed with Lloyds Register of Shipping and is fitted with a DP2 system. It has accommodation for a crew of 28 persons and has a trial speed of 14.0 knots.
Meanwhile, Swire Pacific Offshore (SPO) has confirmed an order with Universal Shipbuilding Corporation (USC) in Japan for 6 high-specification IMT 984 3700 DWT PSVs designed by OSD-IMT, with options for a further 4 vessels. The vessels will be built in USC's Keihin Shipyard and delivered progressively from third-quarter 2014. These orders follow on from the one placed in late 2011 for four OSD-IMT-designed IMT 997 5000 DWT PSVs at USC’s Maizuru Shipyard and 4 IMT 997 PSVs at the EISA Shipyard, Rio de Janeiro, Brasil.
For a graphic of the IMT-982 click on http://bit.ly/qIKsBf
Offshore Ship Designers Group (OSD) is a global one-stop resource delivering naval architecture and marine engineering skills to the shipping and offshore energy industries. It draws on an experienced global workforce to provide high quality feasibility studies, conceptual and detailed designs for tugs and offshore support vessels of all types. OSD is based in IJmuiden, The Netherlands, and has offices in Montrose, York, Appledore, Shanghai and Singapore. www.offshoreshipdesigners.com
For more information:
Merijn Brusselers
Offshore Ship Designers
+31 (0)255 54 50 70
Labels: Honghua Offshore China, Offshore Ship Designers, Platform Supply Vessels, Swire Pacific Offshore Japan
Bureau Veritas simplifies ship certification system
Leading international
classification society Bureau Veritas has put in place a completely new
IT-based certification and ship status system. It is aimed at reducing the
workload of shipowners and operators and simplifying access to ship information
and status.
“In a world where so
much is now done online ships’ certificates are the last great area of outdated
paperwork,” explains Claude Maillot, Ships in Service Director, Bureau Veritas.
“We have seen the ship’s classification certificate grow from one simple page
into a document with many pages and annexes which are built up of both printed
and handwritten entries. It has become unwieldy, error-prone, open to confusion
and difficult to maintain. Bureau Veritas’ new certification system once more
makes the ship’s Certificate of Classification a simple one page document.
Everything else is online in a standardised and easy to access format. That
cuts down the chances of error, confusion and fraud and enables us to add new
services to make life more efficient for ship owners and operators.”
The new Bureau Veritas
Certificate of Classification contains only the key identity of the ship and
notation information. It is printed on recycled paper embossed with a logo to
prevent fraudulent copies. All the other information which used to be attached
as annexes is now updated electronically and can be accessed by owners and by
charterers and port authorities if given access by the owner.
“Authorised users can
go to www.veristar.com and print off what
they need on Ship Status. It can be tailored to be as detailed or a simple as
they require. The new Ship Status is made up of a number of sections (ship
particulars, owner/manager information, cargo and ballast capacities, class and
statutory status, planned inspection items, 1-year survey planner, continuous
and/or PMS lists, regulatory information, BV contacts) and the shipowner may
decide to print each of these sections separately according to the information
needed. The section Class and Statutory Status contains all certificates, which
is what most authorities and charterers need, surveys, audits, recommendations,
non-conformities and memoranda. The owner can print this section completely or
only the to-do list, and in that case the owner may choose items due in 1, 2 or
3 months. This system avoids confusion as there are no more hand-written
updates or recommendations on certificates,” says Maillot. “At the same time we
have enhanced the way owners and operators can see the ship status, which will
help with planning maintenance and surveys. There is a graphical presentation
of all surveys, audits, recommendations, non-conformities and planned
maintenance and continuous survey items due in the next 12 months. Owners tell
us this will help a lot to keep abreast of all requirements.”
The new system also
allows the ship’s staff to update the central record via VeriSTAR Info when
planned maintenance items have to be done by a specific date. The item is then
verified by a BV surveyor on the next ship visit. “Masters will love the new
system and the Ship Documents folder and USB-key version we will supply to all
ships because it makes organisation of all the paperwork needed for PSC and
charters’ inspections much simpler to maintain and present,” says Maillot. “It
sounds simple, and simplicity is what we want to deliver, but we can only do
that now IT has caught up with the requirements of shipping.”
Bureau
Veritas is a world leader in conformity assessment and certification services.
Created in 1828, the Group has close to 52,000 employees in 940 offices and 340
laboratories located in 140 countries. Bureau Veritas helps its clients to
improve their performance by offering services and innovative solutions in
order to ensure that their assets, products, infrastructure and processes meet
standards and regulations in terms of quality, health and safety, environmental
protection and social responsibility.
www.bureauveritas.com for corporate
information, www.veristar.com for marine
information
For more
information:
Octavio
Rinaldi
Bureau
Veritas
+33
1 55
24 7472 16
octavio.rinaldi@bureauveritas.com
Moore Stephens says internal audit should have wider role in governance reviews
LEADING accountant and insurance consultant Moore Stephens says that properly qualified, independent internal audit teams could have a big role to play in carrying out governance reviews for the FSA and other regulators in the post-Solvency II environment - provided certain challenges can be met.
Moore Stephens insurance internal audit partner, Gary Oliver says, “Internal audit has a vital role to play in providing independent assurance that an organisation’s risk management, governance and internal control processes are operating effectively. Internal auditors deal with issues that are of fundamental importance to the survival and prosperity of any business. For example, at present, many internal audit functions are playing a key role in validating the progress of insurance firms towards Solvency II compliance. And they could have an even bigger role to play in the post-Solvency II environment, if certain challenges can be overcome.”
The FSA has been using skilled persons reports with much greater frequency in recent years. Such reports can be commissioned in those cases where the FSA identifies a problem, or a potential problem, within a particular firm, and commissions an experienced professional to conduct a ground-up review. Gary Oliver says, “There is no reason why suitably resourced, independent, qualified and robust internal audit functions cannot perform such reviews. There are some provisos, however.
“At present, many internal audit functions lack the full range of required skills, not least the actuarial expertise, necessary to undertake such reviews. There is also a resource issue, with recruitment in the marketplace made difficult by a lack of available skilled practitioners. The talent pool becomes smaller still when firms are looking for people who can combine knowledge and experience of both internal audit and the insurance industry. In addition, independence of the function needs to be strong. But these are problems which can be overcome by using, for example, appropriate outsourced internal audit providers to either perform selected tasks or to undertake the internal audit function in its entirety.
“Internal audit will need access to a wide range of skills in order to carry out audit work in the post-Solvency II environment. It will also need to be able to demonstrate a robust, risk-based approach if the regulators are to place reliance on its work.”
Moore Stephens LLP is noted for a number of industry specialisations and is widely acknowledged as a leading shipping and insurance adviser. Moore Stephens LLP is a member firm of Moore Stephens International Limited, one of the world's leading accounting and consulting networks, with 636 offices of independent member firms in 100 countries, employing 21,197 people and generating revenues in 2011 of $2.3 billion. www.moorestephens.co.uk
For more information:
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Gary Oliver, Moore Stephens LLP
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Tel: +44 (0)20 7334 9191
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email: gary.oliver@moorestephens.com
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Labels: Insurance, internal audit, internal modesl, Moore Stephens, Solvency II
Bureau Veritas launches Wind Farm Service Ships guidance
Leading international classification society Bureau
Veritas has published guidance for designers and builders of Wind Farm Service
Ships.
Maxime Pachot, offshore service vessel manager at
Bureau Veritas, says, “Although some of the existing Offshore Service Vessel
fleet can perform the tasks necessary for developing and maintaining offshore
wind farms, we see an increasing need for specialist craft. These will include
specialised vessels for servicing offshore wind farms. These will have
particular characteristics and to be efficient they will have to be new
designs. That means they need new class rules and guidance for designers and
yards.”
BV NI 589 Wind Farms Service Ships is a service
notation which covers ships specifically
designed to operate in offshore wind farms for transfer of personnel from
shore, mother ships or accommodation units to offshore wind farms and perform
lifting operations required for wind turbine servicing. The note does not cover
vessels built for installation and assembling of wind turbines or heavy
maintenance and repair for which transportation of wind turbine main parts is
needed. Bureau Veritas has already published specific guidance for these
vessels.
Bureau Veritas’ new guidance notation for Wind Farms
Service Ships is aimed at maximising the efficiency of new offshore wind farm
service vessels. “These vessels have to move people quickly in rough offshore
sea conditions, transferring maintenance personnel from shore or mother ships
onto turbines,” explains Pachot. “That is why we have come up with a specific
notation.”
Bureau Veritas’ note and
guidance will help designers and yards use BV rules for steel ships and rules
for High Speed Craft, combined with the rules for vessels under 500 gt, to
develop new designs which will be light, fast, safe, and have good sea keeping
abilities, while able to work close to turbines, yet will also be
cost-effective.
Pachot says, “Typically
they will have seating for up to 60 persons, a deck area for cargo, some form
of device for connection and access to the turbine tower, lifting devices, a
motion damping system, Dynamic Positioning system (DP) and a high service
speed.”
Bureau Veritas
is a world leader in conformity assessment and certification services. Created
in 1828, the Group has close to 52,000 employees in 940 offices and 340
laboratories located in 140 countries. Bureau Veritas helps its clients to
improve their performance by offering services and innovative solutions in
order to ensure that their assets, products, infrastructure and processes meet
standards and regulations in terms of quality, health and safety, environmental
protection and social responsibility.
www.bureauveritas.com
for corporate information, www.veristar.com for
marine information
For more information:
Maxime Pachot
Bureau
Veritas
+33 1 55 24 74 29
maxime.pachot@bureauveritas.com
Philippe
Boisson
Bureau
Veritas
+33
1 55 24 71 58
philippe.boisson@bureauveritas.com
Phil Cowan returns to Moore Stephens
Corporate finance specialist Phil Cowan has returned to leading shipping accountant and consultant Moore Stephens as Head of Corporate Finance.
Formerly Group CFO of V.Group Limited and Chairman of V.Ships Capital, Cowan has first-hand experience of ship management, marine services, shipbroking and ship finance, and represented shipowners and investors in a number of shipping asset investments, structuring equity and debt finance. He was responsible for a number of V.Ships’ acquisitions and led the V.Ships’ team that managed the sale of V.Group to Omers Private Equity.
Cowan says, “I am looking forward to using this experience to help Moore Stephens’ clients. Shipping has always been highly cyclical, but seldom have we seen such a long bottom of the cycle than we have at present. Bankruptcies, Chapter 11, and impairment are terms in almost everyday use at the moment in the maritime sector. Nevertheless, such market conditions create opportunities for the shrewd operator. Moore Stephens has always had a wonderful reputation for its shipping experience and expertise, and I believe we can augment that still further.”
Moore Stephens Senior Partner, Richard Moore, says, “We are delighted that Phil has agreed to return to the firm and we look forward to working with him as we continue to build a significant mid-tier corporate finance presence.”
Cowan joined Moore Stephens as a trainee in 1986. He moved to the corporate finance team on qualifying in 1989 and became a partner in 1996. He was appointed Head of Corporate Finance in 2004, with a strong track record of flotations, fund-raising, mergers and acquisitions and valuations. His clients included V.Ships, a leading supplier of independent ship management and related marine services to the global shipping industry, whom he joined in 2007.
Moore Stephens LLP is a leading accounting and consulting network, providing a range of compliance and advisory solutions to the shipping and maritime sector, including lead advisory and transaction support services. The firm is a member of Moore Stephens International Limited, one of the world’s leading accounting and consulting networks, generating worldwide revenues of US$2.15 billion through 638 offices of independent member and correspondent firms in 97 countries. www.moorestephens.co.uk
For more information:
Jon Gibbs, Moore Stephens LLP
Tel: +44 (0)20 7 651 1261
Labels: corporate finance, Moore Stephens, Phil Cowan, shipping, V.Group
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