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Nepa Projects aiming for dry bulk pool with 15 ships

Nepa Projects aiming for dry bulk pool with 15 ships
While the dry bulk market is generally accepted as being in a dire state, some market players still believe there are pockets of optimism and are ready to take advantage of opportunities thrown up by the adverse market conditions.

For Nepa Projects and Investments md Pappu Sastry, the market is at a stage where he is looking to start a dry bulk carrier pool. Just as the tanker players typically form a pool structure when the market is weak, Sastry believes that dry bulk players will also be able to benefit from a similar arrangement.

The problem, however, is getting people to join the pool with dry bulk owners generally a very disparate bunch and also less familiar with this kind of set up than tanker owners. “Dry bulk ship owners who have been in pools previously generally go one of two ways; either they hate the idea and will never deal with a pool again or they will like it but will not want to leave the pools they are already in,” Sastry explained.

Qualifying that Nepa’s pool is in the early stages of operation, Sastry said that it has three ships, two supramaxes and a newbuilding ultramax, already in the pool and is looking to gain more ships. For the moment the initial fleet is meant to help benchmark the performance of the pool against the relevant freight indices and establish a track record, which he hopes will encourage more owners to join.

“We want to take over people who are taking on distressed assets and ship owners who want to reduce their operating costs of which there are quite a few in this market,” said Sastry.

This dovetails in nicely with Nepa’s project management services offering alternative investments for people who want to get into ship owning, which is being run through its Nepa Financial Services arm. Not only does this help to restructure debt and refinance ships for clients to boost their viability, but another aspect is to pool funds to acquire assets at the right valuations.

“We do have the option of either taking over a ship into the pool or into technical management or just to help them refinancing their assets; we have a solution available for every need,” he said.

Nepa Financial Services is mainly working with investors now who previously may not have been so involved in shipping or in the dry bulk segment in particular, and for whom it would be a new sector. It aims initially to amass a pot of about $50m for investments.

The ideal size for the pool would be not more than 15 ships, Sastry said. And the types of vessels would be the older supramaxes or the now outdated handysizes that are facing competition from the new batch of 37,000 dwt Green Dolphin design handysizes increasingly coming out of Chinese yards.