Foreign equity funds enter Danish shipping

Scan-Trans, J. Lauritzen and Nordic Tankers are just a few of the examples of Danish shipping companies who have welcomed an equity fund among its shareholders in recent months. We will see more of that, Chief Analyst at Bimco, Peter Sand, says.

Photo: Axis Offshore

In future, having an equity fund among the owners will be more common in shipping companies, Chief Analyst Peter Sand from Bimco says following the development that more and more shipping companies have entered into agreements with equity funds on financing and ownership. Last week, Danish Scan-Trans merged with American Intermarine. The merger draws on capital from the private equity fund New Mountain Capital. This is a constellation we will see more of in the future.

"Equity fund ownership has been a reality in the industry almost since the crisis broke out. It is a financing alternative to the banks that have made it more difficult for shipping companies to borrow money; a development which we most recently witnessed in the Commerzbank announcement to stop lending to shipping. Last year and the year before, we witnessed a growing amount of purchases by equity funds and in the coming years we will see even more of that. We are not talking about 100 shipping companies who will do this but we will definitely see some companies who are short of cash and some funds who are seeing an opportunity to enter the market”, Peter Sand tells ShippingWatch.

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