Published: 23 Nov 2009
Liner ships have taken a battering during the global financial crisis, with many container ship owners facing bankruptcy, Lloyds List reports
Year end audits could mean many containership owners go bankrupt.
"Until now, technically insolvent owners have been able to muddle through the industry collapse," Lloyds List report, "arguing that it was impossible to value their ships at a time when there was no secondhand market to provide benchmark prices.
Auditors are likely to take a tough line when they go through the balance sheets before signing off 2009 accounts.
Mark McVicar, managing director of European transport and infrastructure equity research at Nomura, and one of the industry’s most experienced analysts said last week “the banks will be duty bound to write down non-performing loans."
The year-end, he said, will be “the day of reckoning” for a large swathe of the container shipping industry.
But not everyone agrees that December 31 is a pivotal date.
“I have no idea,” the head of a shipping company told Lloyds List.
With so many stakeholders, and even political interests, caught up in the situation, “we may just stagger along”.
Even if the simmering crisis does not erupt six weeks from now, it may only be a matter of time, a leading broker told Lloyd’s List.
“We will see more defaults over the next 12 months as charter contracts run out and cash flow becomes even more depleted,” he predicted.
