Shipping

The international nature of the shipping business and of the rules regulating it, has a profound impact on the shaping of the relevant national regulatory framework. This legal extrovert character and the need to face successfully international competition underline and explain the main choices of Greek legislator, which will be briefly addressed below at a three-level approach: the first will focus on the regulatory framework of the Greek Shipping, the second on the main instruments governing private law relationships relating to the commercial exploitation of the vessel, the third on the consequences of the recently adopted Code of Civil Procedure (GCCP).

The regulatory framework of Greek shipping

Promotion and legal stability of shipping activity, in order mainly to render attractive the Greek Flag, are ensured by a package of three crucial sets of provisions: art. 107 of the Constitution, art. 13 of the legislative decree 2687/53 and Law 27/75 as in force1. More precisely:

The importance of finance in the shipping industry

The dependence of shipping on finance is directly proportional to the capital intensity and the cyclical nature which characterize the industry. The shipbuilding, second hand acquisitions, upgrading and retrofitting costs or conversions of the ships, especially taking into account the ships’ sizes nowadays, have increased dramatically the last decades and they have increased the industry’s requirements for finance. The need for finance is much more apparent when it is analyzed in combination with the risks entailed by the cyclical nature of the market. The international trade situation (volatility, growth or recession), the geographical / geopolitical and qualitative orientation of global trade, inflation, sudden changes in the prices of commodities, basic products and materials, wars and political changes are some of the external factors which can affect the liquidity of shipping companies and bring up its financing needs.

The main sources of funding for a shipping company

The most widespread sources of funding of the shipping industry are mainly two, equity finance (mostly in way of private equity / through private placements or private equity funds and through Initial Public Offerings) and bank loans.

Raising equity in public markets (through IPOs) by newly entered corporations into the various Stock Exchanges (such as NYSE, NASDAQ, Oslo Stock Exchange, London Stock Exchange, Stockholm Stock Exchange/Nasdaq Stockholm, Singapore and Hong Kong)