Ship Financing: Investment Opportunities and Strategies for New Market Segments - E-Interview with Hans-Werner Kummerow

E-Interview with Hans-Werner Kummerow about Ship
Financing


                         Titel of Interviews:       Ship Finance
                         Name:                      Hans-Werner Kummerow
                         Functional Area:           Owner-Director
                         Organisation:              HWK-Verlag




Short professional CV
Hans-Werner Kummerow was born in 1949 and set out to sea for the first time in 1968. He
gained experience aboard Greek and German merchant vessels and served in the
Federal German Navy as a commissioned officer.
After his time in the German Navy he worked in financing Seagoing Vessels, Floating
Docks and Real Estate. He continued to serve the Navy in various assignments during
Reserve Training Periods. In 2001 he was discharged as a Captain.




       Investment Opportunities and Strategies for New Market Segments
         In the context of the Conference on Ship Finance at SMM 2008, Hamburg

While international financial crisis still increases in size and reach some major national
economies face severe recession risks. The international ship financing community – being
the pacemaker of international trade and growth – now has to deal with those
issues as well.

Hence, the ship finance industry has to give some answers to how maritime markets and
players are affected by the credit crisis. Which challenges do shipowners face in the near or
even distant future, is bank money for new ships getting to expensive to obtain? Do we have
to invent new and innovative financing schemes? Will there even be new opportunities for
ship financing arising from the crisis?

The DMKN-roundtable wants to shed some light on these issues related to ship financing.
We invite experts from companies, banks and institutions to present their views on current
and future market perspectives.




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Dear Mr. Kummerow,


Question 1:
Which of the players in the ship financing sector are affected most by the credit crisis? Why
is this so, are there substantial differences by country / on the global level?

Answer:
             Anglo-American and European Banks are most affected by the credit crisis
             because they have handed out large sums to customers without adequate
             borrowing power or have invested into financial retail products based on
             inadequate borrowing power.
The Arabic and Asian markets are not very much affected with some exceptions in Japan
and Korea.




Question 2:
Is bank money for new ships getting expensive to obtain? Will the business model stay as
attractive as in the last years, especially with the German investors playing a leading role in
the sector?

Answer:
             Since Anglo-American and European banks have lost large amounts of money
             in the past they will have to focus on increased margins for future business.
             This need will make all banking products - including ship-financing - more
             expensive.
The German financial market will suffer seriously from the need to reorganize the public
banking sector in 2009 and 2010. This job will cost between 50 and 100 billion Euro in public
funds before it will be completed. Effects will be felt in all markets relying on money from the
German banking industry.




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Question 3:
Is there a need to invent completely new and innovative financing schemes? Will there even
be new opportunities for ship financing arising from the crisis?

Answer:
             Ship financing schemes will react to changes in financial markets as they have
             always done throughout the centuries. However there is little need to invent new
             schemes. A simple but close look at well-tested schemes of the past will do.
             Older ship fiancing schemes will be rediscovered. And the leading role in ship-
financing will shift Eastward. To Arabic and Asian ship-financing models.



Question4:
Please name – from your personal expertise – the most significant challenges ship owners
will have to face in the near future?

Answer:


                •   Brace yourselves for rough weather ahead and minimize your financial
                    risk-exposure.
                •   Study historical ship-financing schemes in the Anglo-American and
                    European markets of the past.
                •   Build new relationships with Arabic and Asian ship-financing experts.
                    They have several thousand years of experience in ship-financing
                    behind themselves as well.




Mr. Kummerow, thank you very much for this interview!




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