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Chinese financial leasing firms attracting greater interest from shipowners

Chinese financial leasing firms attracting greater interest from shipowners
Chinese financial institutions are seeing increased interest from shipowners over the past few years during the time when traditional lending sources from banks have shrunk due to the shipping crisis.

Wu Haoxin, senior project manager, shipping finance division at The Export-Import Bank of China, said more transactions have taken place over the last two years, and especially over the course of this year as well, due to the market slump.

“Many owners have come to us asking us to provide high financial leverage but we are unable to do that, so we have proposed to them to consider either financial leasing structure or debt finance,” Wu told delegates at the Marine Money conference held in Singapore on Wednesday.

Wu also told Seatrade Maritime News that China Exim is still seeing opportunities despite the severe industry downturn, but the dry bulk segment in particular has been quiet at best.

Ang Toon Beng, senior vice president, DVB Bank Singapore branch, noted that there has been a step up in activities by Chinese financial leasing firms in the shipping arena. “I am very happy to see this given the situation of the shipping market and at a time when many banks are not very keen in shipping. We see them [Chinese financial leasing firms] as a very good bridge to provide the funding gap to owners,” Ang said.

He shared that 3% of DVB’s shipping portfolio is with Chinese leasing firms and DVB has set up a dedicated leasing platform within the bank to promote products internally and with its network of shipping clients.

China’s Minsheng Financial Leasing Co has in fact used the market slump to its advantage as it seeks to enlarge the value of its ship financing deals by 10-15% in 2017 over this year.

Minsheng has so far this year approved around five to six deals worth a combined $1.3-1.4bn, and it is looking at a 10-15% increase in the value of its deals for next year, according to Jerry Yang, chief marketing officer of Minsheng.

“We are kind of like the new ‘animal’ in this industry, and we are here for the long run looking at long term returns,” Yang said.

DVB Ang’s observed that the Chinese leasing firms are hungry for business and have been increasing their marketing efforts including going out to market directly to the bank’s clients as well. “We see them as our partners and competitors but they are an important player to the shipping industry,” he said.

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