KG crisis may break up German shipping

The German KG funds’ unstable conditions are most likely to lead to a total collapse of private funds’ financing of German shipping. At the moment, as much as 400 companies are considered insolvent. The situation is unclear, sources tell ShippingWatch.

Photo: Hanjin

Unusual misery may be succeeded by a perfect inferno in the German shipping market which is the only shipping market in the world still based on small KG funds in which private investors are able to invest in the operations of a small number of ships. So the industry seems to judge the situation following weeks of pleas from shipowners, reluctance from the banks and incertainty about the future for the KG fund structure.

More than 100 KG funds are estimated to have gone bankrupt this year and according to ShippingWatch sources close to the German companies up to 400 KG funds are insolvent today. The German Shipowners’ Association – VDR – does not know the exact number of KG funds and how many of these are suffering. However, it is estimated that Germany has a total of 1,800 KG funds meaning that between a fifth and a fourth of all funds are suffering.

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