Niki Shipping: Adding Value Through Financial Engineering

By Kevin Oates

One of the complaints often lodged against traditional shipowners is that their lack creativity and imagination results in a commoditized business where like assets compete with each other based solely on price. In other words, owners do not add enough value to the process. While it is true that two vessels of the same size and age are not radically different, an area where shipowners can add value is through creative vessel financing structures that serve to maximize efficiency and effectively spread and price asset risk.

In our view, one of the companies leading the charge ahead in this area is Niki Shipping of Greece. Named for the Greek word for victory, Niki controls assets worth more than $500 million yet operates from a small office in northern Athens which houses a lean team consisting of the principal, an accountant, a technical advisor, a legal adviser and a strategic adviser.

Niki currently has an interest in a series of 10 container feeder vessels built between 1979 and 1985, and wholly controls a further five container vessels, two built 1998 with capacity of 2,900 TEU and three built 2000 with a capacity of 5,500 TEU. A further two 5,500 TEU vessels are under construction and due to be delivered during summer 2000. When all the newbuildings are delivered, Niki will control vessels with a capacity of 38,300 TEU and have an interest in other vessels with a capacity of 12,164 TEU. This puts Niki up amongst the big boys, at least in Greece.

This is only an excerpt of Niki Shipping: Adding Value Through Financial Engineering

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