June survey shows shipping executives see prolonged downturn

A JUNE-JULY survey by London law firm Norton Rose of 961 transport executives showed they felt the downturn would be prolonged, and venture capital and export credit agencies would play a larger role in ship finance as banks withdrew.

"Sixty-three per cent of shipping respondents anticipate widespread bank enforcement of troubled shipping loans. Sixty six per cent of shipping respondents expect these enforcements to peak in three to nine months, suggesting the worst is yet to come," said Norton Rose.

"Fifty eight per cent think it likely or highly likely there will be a significant role for private equity or hedge funds. A further 61 per cent see the role of export credit agencies increasing," said the Norton Rose statement.

The law firm surveyed executives from the aviation, rail and shipping sectors from June 17 to July 3. There were 153 respondents from shipping, 154 from aviation and 654 from railways.

"We are only beginning to see the real fallout of the crisis, as evidenced by recent foreclosures and enforcements. It comes as no surprise that most respondents are of the view that the crisis will not be short and sharp," said Harry Theochari, head of Norton Rose's transport practice.

A major issue is a funding gap with 81 per cent of shipping respondents predicting it will be at least 12 months before the number of banks actively lending to the shipping sector increases, while 79 per cent of shipping respondents see no return to pre-crisis levels of available bank credit within three years.

(Source: www.schednet.com)