Marine-Marketing

His second-in-command, who said bad weather prevented him from steering away from the rocks, will also stand trial along with three other crew members, all accused of dereliction of duty and putting passengers at risk.

Two then-representatives of the vessel's owner, Minoan Flying Dolphins, part-owned by Minoan Lines, face charges of insufficient care regarding the 35-year-old ship's rescue equipment and the crew's training.

Two Coast Guard inspectors are accused of falsely certificating ship rescue equipment as being in good order.

No date has yet been set for the trial.

Survivors, including many foreign tourists, described a night of terror as they were hurled into the dark waters, clutching only a few life vests and floating debris.

Dozens of Paros fishermen braved choppy seas to rush to the scene and pull at least 400 people out of the water.

---The Israel Shipyards have unveiled the first coastal guard vessel built for the Greek government to be used to boost security during the upcoming Olympic Games in Athens. This is one of three vessels ordered by Greece from the shipyards as part of an $80 million deal.

Sammy Katsav, chair of the board of directors, said that the shipyards had competed for the tender against many of the leading shipyards in Europe. The vessels are being paid for by the European Common Market. One of the conditions of the tender was that one of the vessels had to be manufactured in Greece in order to provide work for their local shipyards.

The coastal guard vessels are identical to the Israeli Navy's Sa'ar 4 missile boats and will be used to patrol the long southern sea border of Europe, where smuggling and illegal immigration are frequent. A shipyards spokesman said the vessels can also be equipped as regular missile boats.

Rafael, the armament development authority, will provide the sophisticated electronic warfare systems that make it possible to identify targets by day and night and facilitate control of the heavy machine guns and 30 mm. cannons stabilized by gyroscopes and adapted to marine conditions.

The vessels also carry light speedboats used in rescue operations and chases. They can travel a distance of 4,000 nautical miles without re-fueling and have a maximum speed of 33 knots.

Since work was held up by court proceedings on the part of the Italians, who lost the tender, the Israel Shipyards were forced to complete the vessels' construction in about one year. For this purpose, they conscripted 100 workers - in addition to the 350 regular employees - who worked double shifts.

---With booming Russian exports through the Baltic sea, ice class tankers are having their day in the sun, demonstrated by Thenamaris' ice class suezmax tanker "Seamagic" being fixed and confirmed to Sibneft, the Siberian oil major recently calling off its merger with Yukos, at a rate of nearly US$165,000 per day. The fixture which was reported yesterday sets the scene for Baltic to UK Continent rates in the mid W400s.

Sibneft has booked the 1999 built vessel, which has a 1C ice class, the lowest ice class available for this type of tanker, to sail with 140,000 tonnes of Russian crude from Primorsk on the 7 January, with an unspecified discharge point in North West Europe in the middle of January. The reason for the higher than usual winter rates in the Baltic Sea is that Russian authorities have decided to follow the strict guidelines set by the EU as well as protests and pressure from Sweden and Finland, which are concerned at the impact of a tanker accident in the sensitive environment of the Baltic Sea.

Dimitris Tsahalis, Chartering Manager at Thenamaris says: "The Russians have no choice. They have to go with ice-class tankers now. There are not that many of these ships around, so owners can command a premium."

Previously the decision to charter ice class tankers remained largely at the discretion of the charterers and the actual ice conditions in the Baltic when transport was required. Traders and Russian charterers would evaluate each cargo on a case by case basis. Now, the decision to use ice-class tankers mans higher freight rates for cargo shippers. The critical period for Baltic Shipping is between the middle of January and the end of February, when Russian authorities may require the mandatory use of vessels with ice class B, commanding even higher rates through the winter.

Unconfirmed reports indicate that the Knutsen OAS controlled "Hanne Knutsen" which is on let on time charter and last fixed to Sibneft on the 15 December at W400 on the same route, has been taken again at a rate as high as W520, giving the time charterers a day rate equivalent to US$180,000 per day.

According to Mr Tsahalis, owners are expecting rates for low ice class tankers to stay at premium rates around W200 above non-ice class rates, unless the weather worsens substantially and vessels with higher ice classes are required.

---The North of England Protection-and-Indemnity (P&I) Club (NoE) is not budging from its refusal to get publicly involved in a controversy over large discretionary claims paid to Greek shipping company Dynacom.

At a P&I conference held in Piraeus this week, Mike Salthouse of NoE responding to heavy criticism of the club's stance said: "We do not and will not discuss individual members' claims in a public forum."

His reply came after shipowner Vassilios Bacolitsas of Pioneeer Tankers, without specifically naming NoE, referred to the case in an inflammatory speech.

He accused the club of giving "a very uninformative and simplistic answer" to the press when asked about the case, "merely saying that everything had been done according to the rules".

That may have been correct, Bacolitsas commented, but in the circumstances of the particular case he said he felt "that the club involved made a monumental public-relations blunder by not explaining itself once the case was in the public arena".

The payout of up to $18m to Dynacom, controlled by current NoE chairman George Procopiou, arose from losses that four Dynacom tankers incurred in the failure of the Metro bunkering operation in the Middle East in 1998.

Salthouse said: "Contrary to current speculation, the claim in question was not founded on delivery of cargo without production of bills of lading." He also pointed out that Procopiou was not chairman at the time of the discretionary award and added: "As a director, he was automatically excluded from any discussion in the shipowner board's decision-making process."

Salthouse said that for a considerable time the club has had guidelines in place which were drawn up by legal counsel and which are given to directors on what they can consider on discretionary terms. "As far as I know these have not been transgressed," he said.

Conference chairman Lou Kollakis of Chartworld also chipped in on the heated discussion, saying he believes it is a very dangerous precedent to put chains on a P&I club board about discretionary claims.

Bacolitsas slated P&I clubs for being "secretive cartels" that have not realised the days of meetings and decisions being taken behind closed doors is coming to an end.

He reserved a few harsh words for his colleague shipowners, saying he had come to the conclusion "that the only aspects of P&I that matter to them are claims being paid promptly and paying as low a premium as possible."

---Always ones with an eye for a bargain, Greek tanker owners are presently engaged in an s&p spree of staggering proportions. Indeed, 22 different owners have had dealings in the secondhand tanker market in the past seven weeks while another seven have ordered tankers in the Far East.

Many of the ships involved can hardly be termed secondhand, having been delivered since 2000, while some of them are still under construction. Further, the oft repeated adage ... 'never buy at the top of the freight market' hardly stands-up.

We all know the freights are high and holding strong levels as ships of all ages are turning a nice profit. But most of the dealing in the run-down to Christmas has involved modern tonnage and buyers have been forced to pay top prices to secure the ships they want, while those selling have been making impressive profits. Much of the activity has in fact been between colleagues.

Indeed, the list of those dealing secondhand tanker tonnage reads like a who's who of Greek shipping: Alafouzos, Angelopoulos, Chandris, Diamantidis, Embiricos, Georgiopoulos, Hadjieleftheriadis, Stelios Haji Ioannou, Karnessis, Livanos, Lykiardopulos, Maranakis, Martinos, Niarchos, Peraticos, Prokopiou, Restis, Terzis, Topouzoglou, Tsakiris, Tsakos and Vafias.

Newbuilding contracts have been inked by Angelicoussis, Economou, Diamantidis, Goulandris, Polys Haji Ioannou, Paraschos and Tsakos, often at levels below what is being paid for existing ships but of course, with trading days some way off.

In the past seven weeks just over $1bn has been invested on 24 tankers of 3.935m dwt.

Another $775m has been committed to tanker newbuildings. While this is an impressive

investment, Greek owners have in fact also been sellers. Over $1.1bn has been raised selling 28 tankers of a total 3.66m dwt since the beginning of November. Another eight ships of 500,000dwt have been scrapped raising just on $25m as owners take advantage of record scrap levels.

"These are strange times," comments Tom Jackson, director of Paralos Finance Corp. "Timing is the most important factor in any vessel's period of ownership and operation. This means, knowing when to buy and when it's best to sell," said Jackson. But he can't fully explain what is happening just now. "Looking at what's happening at present, this is not as clear as it should be.

Undoubtedly there is an element of asset play and big profits are being made on the sale of modern ships and deals are being linked to charter backs. The German KGs are an important factor and are buying tonnage, not only from Greek interests and certainly not just tanker ships."

Of the 18 tankers delivered since 2000 that have been sold, seven have gone to German KGs and two to a new Norwegian investment fund which seems to have the backing of Den Norske Bank.

Just how rewarding a sale can be is seen in the deal struck by Stelmar Shipping, founded by members, Stelios HajiIoannou. The US-listed company's bottom line was boosted by a net $25m in cash when it sold and chartered back its two largest tankers, the aframaxes Takamar and Jacamar, for $71m. Embiricos interests are set to reap a neat $14m on the sale to Theodore Angelopoulos/ Metrostar of the 2002-commissioned Poros, 310,000dwt for $84/85m.

The 'headline grabbing' deal in the period was the sale of the Niarchos group's three VLs to Metrostar for some $216m and two, just delivered 110,000dwt tankers, to Peter G Livanos/Ceres Hellenic for a reported $90m total. Livanos, has reportedly just negotiated the sale of the Fantasy and the Fidelity, a pair of 2002-built 106,000-tonners to Norwegian-based fund Tailwind for $90m.

These ships were recently purchased from Andreas Ove Ugland for $43m each.

Angelopoulos has been spending the $525m raised when he sold the Metrostar fleet to Peter Georgiopoulos (who has just sold three of the ships) at the turn of the year. Since then Angelopoulos has purchased five modern VLs and a couple of product tankers, usually paying top dollar after beating off the interests of other Greek owners. The average $84m per VL that Angelopoulos has paid compares with the $75.5m and $76m said to have been shelled out by Chandris and Lykiardopulos respectively to John Fredriksen interests for just delivered VLs.

George Prokopiou/Dynacom is another to see a tidy profit from the sale of a pair of 149,000dwt, 2002-built tankers to German KG Salamon AG for a reported $54.25m each, with a five year t/c back, some $2m a ship more than contact price. This deal followed the Prokopiou purchase of a pair of 2003-commissioned 160,000-tonners for a reported $53.2m each.

At the smaller end of the market, Peraticos/Pleiades has sold a pair of three-year-old 63,000- tonners to German KG investors for a reported $66m total, about $10m more than newbuilding price.

Tsakos Shipping & Trading has been buying early 1990-built VLs, most recently spending just under $150m on three 299,000dwt AP Moller ships. Just previously, listed Tsakos Energy Navigation sold two capesize tankers to German KG Dr Peters for a bullish $55m each with a five year t/c back.

Record scrap sales have also featured, with Karnessis/European Navigation interests

negotiating the sale to China of the 1976-built aframax Devon on a ceiling-busting rate of

$307/lwt, reaping $4.7m on the 15,273lwt unit.

---Royal Olympic Cruise Lines filed for bankruptcy protection in the Federal District Court in Hawaii for the subsidiaries owning its two new German built luxury high speed cruise ships - the Olympia Voyager and Olympia Explorer. The move comes after almost continual financial discussions with the company's mix of banks, guarantors, yard and financial advisors since the vessels were delivered. The continual restructuring efforts were brought about primarily by the equally continuous political turmoil roiling the Eastern Med since the vessels delivery. Built to provide luxury cruises throughout the Holy Land - Egypt, Israel, Lebanon and Turkey - in a seven to ten day window, the high speed vessels have never been able to make the voyages Royal Olympic and its Chairman Andreas Potamianos invented. The Holy land tour might have better been billed as an opportunity to visit the world's terrorist hot spots.

The filed subsidiaries are just two of the company's eight. The company filed on Wednesday in what has been rumored to be a preemptive action a step ahead of KFW's arresting the vessels as part of an acceleration of a current $6 million obligation into a $230 million call. A further effort by Creditors to have the bankruptcy judge hold the vessels in port was modified to enable the vessels to continue trading

The company at the suggestion of the bankruptcy judge has set up a Letter of Credit (LC) to enable the vessels to continue to trade on their scheduled routes. The LC plus the US bankruptcy long arm statute which basically states that if you have any dealings whatsoever in the US don't even think about messing with interrupting the vessels trading and will enable the company to assure passengers and the travel trade that it is business as normal while the financial issues are worked out.

A goal of Chapter XI is to enable a viable enterprise an opportunity to restructure. That means keeping the vessels trading. That means a certain level of communications and cooperation between angry creditors, especially so in the case of a cruise line with travel trade. At press time Milbank Tweed, which is representing KFW, is at least interested in speaking to ROCs lawyers. But Milbank's lawyer NY based Luc Despins has a reputation as one of bankruptcy's most ornery lawyers (which says a lot as the practice attracts the nail chewing sort). ROC's attorney in Hawaii Jerold Guben, with the firm of Reinwald, O'Connor and Playden, has a similar personality. (Tickets should be sold for their conference calls - but on a serious note they will be central figures to any resolution).

Further, a former Board Member John Rogers is also in the fray on behalf of the company. Historically, the company's legal work has been handled by the New York firm Morgan Lewis but they are precluded from representing the Bankrupts because of their larger role with the Corporate entity.

The creditors include KFW on both vessels, Fortis Bank on one with an exposure reported to be north of $75 million though some is syndicated out, A broad syndicate of German banks on the second vessel, a guarantee by the City of Hamburg and a recent position by Blohm and Voss the vessels builder. Of the lenders, Fortis has been the most creative and helpful throughout the painful process, but that may be because they feel as senior lenders their position is somewhat protected by the City of Hamburg's guarantee.

The lenders are appreciative of the macro market forces but have also been critical of the company's management, and the shareholding shenanigans between Louis Cruise and ROC Holdings. Interestingly today over 4 million shares traded between $.60 and $.23 and it would not be surprising if current equity may have had an eye on the market. Quite a bargain for a company which once traded as high as $18.87.

In the end the vessels creditors are secured lenders and whatever plan the company puts forth will have to be accepted by the lenders and it is unlikely they will be split. Given the company's mantra for several years has been wait until the Olympics in Greece, today's lenders may well join today's equity rooting for a peaceful spring and a fantastic celebration of the Olympics next summer.

BIMCO MASTERCLASS WORKSHOP - BILLS OF LADING

Date: 18-20 February 2004, Athens

Delivered in co-operation with the Institute of International Shipping and Trade Law University of Wales Swansea, UK

This is the sixth of a series of innovative BIMCO Courses focusing on key aspects of maritime commerce. The workshops are designed for participants who already have some shipping experience and who wish to broaden their knowledge of the industry.

Each workshop in the series consists of two or three full days of presentations by industry experts, combined with group discussions and case studies. Participants are expected and will be encouraged to contribute actively to the group discussions. At the end of each workshop, participants may take a short "open book" exam to assess their level of understanding of the subject matter. This assessment leading to the award of a BIMCO diploma will be of value to employers and employees alike in demonstrating the effectiveness of the training and knowledge attained.

* The Importance of the Bill of Lading as a Receipt for the Goods

* The Importance of the Bill of Lading as a Contract of Carriage

* The Importance of the Bill of Lading as a Document of Title

* Liens on Cargo and Sub-Freight

* Claims in Tort and Bailment

* Switched Bills of Lading

* Optional Assessment

At www.bimco.dk, you can also find the registration form, which may be downloaded and returned to BIMCO Courses as soon as possible. Please note that the number of participants will be limited for educational purposes, thus registrations will be handled on a strictly "first come, first serve" basis.

Posidonia Cup - Friday 4 June 2004

Venue: Faliron Bay, Athens - Piraeus

Posidonia Congress - Monday, June 7 2004 (morning)

Venue: Piraeus Port Authority, Conference Centre

Exhibition - Opening Ceremony - Monday, June 7 2004 (evening)

Venue: Piraeus Port Authority Exhibition Center

Exhibition - Tuesday, June 8 2004 to Friday, June 11 2004

Venue: Piraeus Port Authority Exhibition Center

Information: Posidonia Exhibitions SA, posidonia@posidonia-events.com

6th Ann MARINE MONEY GREEK SHIP FINANCE FORUM

Date: 14 October 2004, at Athens Ledra Marriott Hotel

The 2003 forum attracted a total of 162 individuals during the day including presenters. From our records this includes 48 shipowners and shipowers representatives, 54 bankers and financiers, 13 lawyers and many others besides. That is substantially better in numbers and in quality than any other comparable conference in Greece.