I see a couple shipping companies that are losing money faster than seems sustainable. By the end of 2013 GNK is expected to suffer an earnings loss of 1.25 times its current share price. EGLE will lose more than three times its current share price. These are dry bulkers and I don't believe many people are predicting a turnaround in that sector by 2013. So is 2013 to be the year of the big dry-bulk shakeout?
Don't mistake me. I'm not suggesting there is going to be a flood of bank-owned ships spilling onto the market for pennies on the dollar and no money down. I'm coming to believe that mythical creature is a mere invention of shipping management to keep investors in the fold. When shippers go bust they will be reorganized and move forward. I have heard no scenario for when banks would repossess ships. But we have seen shippers reorganized. Anyone know of a shipper that is in such a state that the banks will not leave ships in their hands any longer?
There have been numerous scenarios where banks effectively demand that ships be sold even if they don't take direct ownership. Too many to name. Furthermore, banks effectively own OSG, Torm and others. They are holding on to the equity because many feel that a bottom has been reached or a sale into this oversupplied market is too dangerous. Nonetheless banks own a helluva lot more ships than they'd like.