November 6, 2002

Hard times the right time for shipowners to shape up
Shipowners should view the current downturn in the financial and freight markets as an opportunity to get their finances in order, according to Chris Chasty, head of the shipping group at shipping accountant and business consultant Moore Stephens. London.

Writing in the latest issue of the Moore Stephens shipping newsletter, The Bottom Line, Chasty says shipowners should "use external cost pressures to impose some healthy discipline on their outgoings, and to engage in some hard financial pruning so that the company is in strong shape to grow when the opportunity arises."

Chasty says that, despite the bleak economic picture, funds may still be available for shipping. "In fact," he says, "the effect of a depressed stock market is to increase the amount of private funds seeking placement. Against this background, a direct investment in shipping can suddenly seem a better bet."

Chasty looks at the respective merits of public, private and debt finance, and concludes that none of them has all the answers for shipping. "But," he adds, "they all share in common the need to present the business case as favorably as possibly, and to ensure that the company has tidied up its balance sheet, is transparent, and can show clear and justifiable projections to support any proposed investment. The important thing is to be properly prepared."

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