Managing Liquidity & Financial Challenges in a Downturn

By Socrates Leptos-Bourgi, Partner, PricewaterhouseCoopers

There is little doubt that over the last few months our world has changed. As the US credit crisis has spread through the global banking system to the rest of the world, many years of relatively strong economic growth and booming world trade driven by the emerging economies have, rather abruptly, been replaced by an environment of poor liquidity, stagnant trading conditions and damaged consumer and investor confidence.

The impact on the shipping industry has been dramatic. While many anticipated that the buoyant shipping markets would not last forever, few expected the downturn to be as dramatic as it has been. Within weeks, daily hire rates barely meet daily operating costs, market values have dropped sharply, some charterers fail to meet their obligations

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