[EN-SEA] Berlin Rejects Claus-Peter Offen Aid Request

GERMAN tramp owner Claus-Peter Offen has had its application for state aid rejected, German shipping sources have told Lloyd’s List.

The company’s managing director Jan Hendrik Offen was not available for comment. However, the shipowner said in a statement that it had applied for government aid, but will now not make use of this avenue to fund its huge newbuilding programme.

“The realisation of government funding seemed unlikely right from the outset, due to the large volume of the application", the company said.

It did not reveal how much it had sought, but ship finance sources say that it would have been in excess of €150m ($222.7m), the amount above which Berlin had to give its approval.

Below this level, the government’s reconstruction bank KfW could have decided on its own whether to grant funding.

Claus-Peter Offen is in urgent need of capital to finance its huge newbuilding orderbook. The company said that vessels ordered include 19 ultra-large containerships, seven product tankers of 50,000 dwt and four bulkers of 180,000 dwt.

The total value is €2.5bn. All vessels have long-term charter contracts. Initially, Offen planned to finance a large part of these ships via KG funds. But Germany’s small investors have stopped investing money in shipping funds, and the KG companies are unable to provide the equity needed.

Claus-Peter Offen has close ties with KG houses MPC and CommerzReal, an affiliate of German bank Commerzbank, which is also the owner of shipping lender Deutsche Schiffsbank.

“It is not possible at the moment for the two companies to raise funding due to the current conditions of the capital market,” Claus-Peter Offen said.

Under the KG financing scheme, small investors pay about 30%-40% of the total costs of a newbuilding, the equity part of the financing. The remainder comes from a bank loan, backed by a ship mortgage.

The KG houses have only been able to collect about half of the equity needed for Claus-Peter Offen's fleet. The amount remaining will now be shouldered by shipowner and its partners, the company said.

According to sources, German lender Commerzbank will bear the brunt.

Source : Lloyd’s List, 30.10.09.