Alixpartners News

The shipping industry's pledge to limit its carbon footprint may suffer a setback as the current Red Sea crisis prompts it to use more vessels and take longer routes to ensure the smooth sailing of global maritime trade.Iranian-backed Houthi militants' attacks on vessels passing through the southern Red Sea have choked trade through the Suez Canal, driving many container shipping companies to add 10-14 days to the voyages between Asia and Europe and add more vessels.The disruption…

The supervisor of Singaporean shipping group Xihe Holdings Pte Ltd has put seven oil tankers controlled by the company up for sale as part of efforts to recoup funds owed to creditors, three sources said on Wednesday. Xihe Holdings is part of the Lim family business empire, which also includes oil trader Hin Leong Trading and fleet manager Ocean Tankers (Pte) Ltd, both of which were placed under court-appointed supervisors earlier this year.The sale includes three crude oil supertankers and is expected to get fully underway in the coming days, the sources said.The ships were valued at a total of just over $196 million, according to vessel…

The offshore supply vessel (OSV) industry has emerged from its 2017 trough, thanks in large part to a slight shrinkage of the active fleet, a string of debt restructurings, improved cost management, and an uptick in drilling activity in a few regions. The industry is far from healthy, though, and the climb back to financial well-being will likely be long and unsteady. Not every operator will survive. And even though we’ve seen some improvement from 2017 levels, leverage ratios remain sky-high, the supply of vessels far outstrips demand, and—most crucially—the price of oil remains volatile.

A ‘work in progress,’ the North American brown water, shallow draft sectors have experienced a tumultuous year of evolution, changing market conditions, a rapidly shifting regulatory environment and new opportunities. Anything but boring; and within the pages of Maritime Reporter’ & Engineering News’ Annual Yearbook, Joseph Keefe, editor of sister-publication MarineNews, takes a deep dive into the issues driving the domestic waterfront.Workboat EmissionsMore than one year ago, Volkswagon learned the ultimate (and painful) meaning of the iconic U.S. adage of “Don’t do the crime if you can’t do the time – or at least pay the staggering fine.” And pay it forward, Volkswagen did.

The new 0.5% sulfur cap on fuel content for the global maritime industry means the container-shipping industry will need to offset up to $10 billion in incremental costs, starting Jan. 1, 2020, when the cap is slated to take effect, said a study.IMO 2020 regulations is promulgated by the United Nations’ International Maritime Organization (IMO).The new report by the global consulting firm AlixPartners also finds that the new fuel rule could expose carriers on just eastbound Asia-Americas routes plus Asia-Europe routes—which together account for about 20% of container-shipping volume globally—to up to $3 billion in additional costs alone.By way of comparison…

Global consulting firm AlixPartners, in a new paper entitled, “Too many ships, too few rigs: why recovery is still a distant dream for the OSV sector,” warns that companies counting on a quick return to stability in the OSV sector are in for a rude awakening.The September report goes on to say that OSV companies continue to face pressure due to a radically changed oil industry and must take quick and decisive action in order to survive in what should be considered the ‘new normal.’Separately, VesselsValue.com’s Head of Offshore, Charlie Hockless told MarineNews, “I would agree that there are murmurs of a potential market recovery brewing…

Following the path of oil prices, consolidation also follows myriad financial crises. What happens next isn’t altogether clear, but the long, deep trough for offshore energy may finally be in our choppy wake.In mid 2017, financial turnaround and financial repairs specialist Alix Partners made a bold statement regarding the beleaguered Offshore Service Vessel (OSV) marketplace. In a July 2017 report, following an analysis of 44 participants in the business, the restructuring team wrote: “The industry faces grave financial pressure…

Ocean Rig UDW Inc., an international contractor of offshore deepwater drilling services, has announced that pursuant to an order of the Grand Court of the Cayman Islands Simon Appell of AlixPartners Services UK LLP and Eleanor Fisher of Kalo (Cayman) (formerly AlixPartners) have been discharged as joint provisional liquidators of the Company and its subsidiaries. The subsidiariesare Drill Rigs Holdings Inc. (DRH), Drillships Financing Holding Inc. (DFH), and Drillships Ocean Ventures Inc., (DOV) and together with UDW, DRH and DFH, the Scheme Companies. Accordingly, the petitions to wind up the Scheme Companies have been withdrawn. As previously announced by the Company, the schemes of arrangement proposed by the Scheme Companies became fully effective on September 22, 2017.

As oil continues to sell below $50 per barrel, 2017 could be one of the toughest years in decades for Offshore Supply Vessel (OSV) companies, according to a study of 44 companies in the industry by AlixPartners. The firm’s analysis highlights these companies’ rising debt burdens, making it increasingly unlikely that most of them can maintain solvency. The industry faces grave financial pressure, which is clear from recent bankruptcy filings and distressed mergers. Exploration and production (E&P) companies have drastically reduced their rig counts, causing demand for OSV services to plunge.

The outlook for global container carriers remains rocky at the outset of 2017, according to a new study by AlixPartners. Hanjin Shipping Co.’s bankruptcy in 2016 sent shock waves through the industry, while Brexit and the new U.S. administration’s policies threaten to inject further uncertainty into the future of global trade. These stances could reverse policies that have supported the growth of containerization since the 1950s. Going into the important pricing season, companies need to do everything they can to retain the higher rates recently seen.

According to AlixPartners’ inaugural study of industry performance based on an analysis of the major dry bulk shipping companies, industry revenues for the global group fell 18% from 2014 to 2015. Even more troubling was the collapse in earnings before interest, taxes, depreciation, and amortization (EBITDA) within this group, dropping from $169 million to minus $115 million: a staggering, 168% decline. Conditions are likely to worsen in 2016. China’s economic slowdown continues to depress demand for basic materials; coal imports alone declined 30% from 2014 to 2015. Industry consolidation and vessel scrapping—the supply side of the equation—remain well below the levels needed to generate a meaningful rebound in pricing…

The need of the hour is consolidation of container ship lines order to regain profitability and to overcome financial struggles, consulting firm AlixPartners says in a new report. The report says that an increased supply of vessels, coupled with the introduction of giant ships, had met with a dwindling demand in the second half of last year resulting to overcapacity, low profitability and reduced cash flow. The shippers with “M&A on their minds need to be proactive” if they hope to reap the kind of rewards winners in consolidated industries enjoy—or to prevent becoming acquisition targets themselves, the consultants suggested, pointing to the successful consolidation of the US airline industry as a possible template to follow.

All signs point to a continuation of struggling theme for containerized-ocean-freight industry  into 2016 and beyond, warns a study by AlixPartners. The containerized-ocean-freight industry suffered in 2015. Its continuing financial woes accelerated because nearly all key financial indicators declined from 2014. At the heart of the industry’s problems, a persistent global supply-and-demand imbalance is to blame. All signs point to a continuation of that theme into 2016 and beyond. The most-recent forecasts expect global container fleet capacity to grow by 4.6% in 2016, and another 4.7% in 2017, though spot prices for major routes have dropped 21 to 44% from a year ago because of plunging demand, now about half the current growth forecast.

More than half of the public companies in the offshore supply-vessel industry face a high probability of restructuring or bankruptcy, Bloomberg reported quoting a research released from the consulting firm AlixPartners. Even before crude prices collapsed and triggered a retreat from expensive deepwater projects, the offshore supply vessel industry was struggling with rising debt and too much competition jockeying for the same work. In the past seven years, the service vessel fleet expanded by 38 percent, fueled by Chinese shipyards and access to easy credit that helped drive up vessel counts. At the same time, offshore rig counts grew just 5 percent.

South Korea is getting serious about tackling its "zombie company" problem and will set up its first restructuring firm backed by the government and banks in November, spooked by some huge corporate losses and a darkening economic outlook. Korea Development Bank (KDB) will also seek to sell some of the 118 non-financial firms it controls, the government said last week - a move seen as part of its new resolve to deal with the issue. About 20 companies controlled by the state-run bank are seen as struggling.

Iran, the United States and five other major powers reached an agreement to restrain the Iranian nuclear program in exchange for relief from economic sanctions. Q: Can you outline the timeline from here? "The P5+1 will now work on a UN resolution to endorse the deal; separately, domestic legislatures and other processes will review text, in the U.S, that includes a 60-day review period; 90 days from today the deal goes into implementation mode in which Iran does a number of nuke steps, and the P5+1 establish legal conditions for relief, but it doesn't get activated until the IAEA (International Atomic Energy Agency) issues a report verifying Iran did what it said it would do, which Secretary (of State John) Kerry put at about 6 months, and which I think is about right, as noted before.

The world's shipping lines risk bankruptcy and will have to shed assets in order to stay afloat. The outlook for the global container shipping industry remains challenging for the remainder of 2015, according to the new report from AlixPartners. 'It is a very difficult industry to continue to make money in,' Albert Stein, a managing director of AlixPartners. According to the report, total debt for the world’s publicly-traded carriers declined 15% through the end of the third quarter of last year versus 2013, to $91 billion from $107 billion and capital expenditures for the period declined 14%, to $18 billion from $21 billion. By the same token, the study reveals that industry operating expenses declined by 4%, or $7.6 billion, for the period.

The outlook for the global container shipping industry remains challenging for the remainder of 2015, according to a new report from AlixPartners. In its annual outlook for the industry, the global business-advisory firm predicts that operating improvements will continue to prove difficult amid flat or declining demand. The AlixPartners report warns that carriers have been too slow to make any changes to their services or networks in the face of the slump in Brent crude oil prices during 2015 and that recent falls in bunker fuel prices are welcome but will not likely offer a permanent fix.

Private equity has pumped $32 bln into shipping in past 2 years. Ships totaling 299 mln dwt to enter global fleet from May. Some private equity-backed shipping IPOs have been put off on weak sentiment. The shipping industry faces a looming capacity glut as billions of dollars pumped into it by private equity have stoked a vessel-buying spree, threatening its prospects just as the sector is emerging from its worst downturn in three decades. Backed by private equity and hedge fund financing, shipping companies have placed orders for thousands of new ships over the past two years, reminiscent of the ship-ordering binge of the mid-2000s that eventually led to overcapacity after the global financial crisis severely hit cargo demand.

Beset by continued sluggish demand, a growing mountain of debt and a radically changing marketplace, listed companies in the global container shipping industry as a whole face a greater risk of financial distress, including possible bankruptcy, than at any time since 2010, and that risk has grown in each of those past three years, finds business advisory firm AlixPartners in a new analysis. Contributing mightily to this situation, according to the study, is a so-so global economy…

Global law firm White & Case LLP announced the availability of a new report, "Restructuring & Beyond: The marine industry's routes to safety." The report focuses on survival strategies for those affected by the industry's downturn as well as emerging opportunities for companies, banks and investors. "Market equilibrium remains out of balance, and risks remain for the maritime sector," said Christopher Frampton, Partner and Global Head of the Asset Finance Practice of White & Case. "We have seen some contraction in the bank market. This, together with continued demand for capital, presents opportunities for alternate sources of finance.

Registration is open for the 10th Annual Marine Money Istanbul Ship Forum on May 22, 2013 at the Swissotel - The Bosphorus. Meet with shipping professionals to hear about how to position your business in these challenging times. The latest issues in Turkish shipping and ship finance will be discussed by industry experts in Istanbul. Confirmed to-date speakers and sponsors include, among others, AlixPartners UK LLP, AKT Law Firm, Besiktas Shipyard, Geden Line, Desan Shipyard-Kaptanoglu Holding…

Business advisory specialists, AlixPartners, honored by TMA for 'International Turnaround of the Year' for their work at DeepOcean Group. AlixPartners, the global business-advisory firm, has been honored by the Turnaround Management Association for its work, in concert with other advisors, at the company now known as DeepOcean Group Holding AS, previously the Trico Marine Group. The AlixPartners team, led by John Castellano, managing director, was cited for its contributions in the highly successful effort, which is the winner of the TMA's "Turnaround of the Year: International Company" award for 2012. The Norwegian-registered DeepOcean Group is an integrated provider of subsea…