Taking the long view on finance

As bankers continue to look inward, Mr Hamers believes there are reasons for Europe’s marine sector to engineer a means through which it can begin to take the initiative itself.

“The marine industry at large should look to share the financial risks in order to be in a position to share the rewards of investment,” says Mr Hamers. He adds: “If we look at some of the huge projects underway in both the wind and offshore markets, these developments are for the long term and require massive investment in terms of installation technology.”

This, according to Mr Hamers, could mean suppliers getting involved in pre-delivery finance, taking on the financial risk on a project-by-project basis, performing a task that would previously have fallen to bankers and also reaping the rewards.

”You still have to pay suppliers and shipyards while the vessel isn’t actually earning but costing quite a bit. Shipyards often can offer pre-delivery finance but there’s room for further help in the same form from the big suppliers and very often there’s government support for this kind of arrangement,” he says. “If the vessel and its equipment are custom-built, then customers and suppliers should be working together to share the risks as well as the rewards. After all, if there’s no project, there’s no work,” he concludes.

There is also a new strain of thought around post-delivery finance. So far there has been a disconnect between the sophistication of the vessels and the responses from the bank says Mr Hamers. ”The more advanced vessels for example have much higher projected returns, including better maintenance rounds across the lifecycle and more chartering opportunities,” he says.

“However the real value of these vessels isn’t so easy to explain to a layman in the bank. For them its difficult to assess something very new, unlike, for example, just another bulker build. You have to explain why the price is right,” he explains.

This is where customers, suppliers and yards could get together more than they are doing at present says Mr Hamers. ”Its not something that’s happened much till recently, post-delivery finance used to be a case of ‘the customer takes care of it, end of story’,” he says.

Despite this, he points out that there’s a much better chance of getting a project properly financed by drawing on the complete network underpinning the design: ”If you can go to the bank, or even to another source, and make a complete case right across the operational profile and lifetime of the vessel, you can argue for a much better financial package.”