Newport introduces shiprepair financing scheme

May 11 2018

UK-headquartered Newport Shipping Group has appointed a new executive team and refocused its business to provide drydocking, repair and financing services to the shipping industry.

A key element of the company’s new service portfolio is a shiprepair financing agreement, whereby shipowners opting to repair ships at one of Newport Shipping’s 13 drydocks can stagger 60% of their drydocking payments into 12 or more equal monthly instalments.


With only 40% of total maintenance costs due when the vessel returns to service, the company’s financing solution is claimed to be an attractive proposition for shipowners and shipyards.


Newly appointed CEO, Erol Sarikaya, explained. “We offer a comprehensive shiprepair service enabling shipowners to minimise working capital outlays and take advantage of our global network across the Pacific and Atlantic trading zones. The benefits are clear, as 60% of total drydocking and associated maintenance costs are paid through subsequent vessel operations.


“Traditionally, when a vessel drydocks, up to 50% of drydocking costs are paid over a two or three-month period. Sometimes, shipyards may require all drydocking costs be paid before the vessel returns to service, while spare parts suppliers and equipment manufacturers are usually unable to extend such credit terms,”he said.


Roy Yap, Newport Shipping’s COO, said: “Our credit payment system covers all maintenance costs in addition to drydocking costs, such as 1) spare parts, 2) paint, 3) specialist works, and 4) equipment retrofits, such as a ballast water treatment systems (BWTS) or scrubbers, which can in some cases comprise the majority of a vessel’s total maintenance budget. Newport has a unique offering in the repair market.


“It is important to highlight here that we also arrange for the timely delivery of equipment and spares to the yard. Since any delays in the supply chain increases drydocking time, resulting in increased costs for the owner, we provide shipowners with an effective, cost-efficient and reliable approach. By procuring the delivery of spare parts prior to vessel arrival, we help shipowners eliminate unnecessary off-hire or unbudgeted cost variations,” he said.


Newport Shipping’s chief risk officer, Colin Manchester, said: “I see our product having excellent value for our customers across all shipping segments. By deferring the majority of shiprepair costs, we reduce cost pressures that often limit otherwise needed repair works during weak freight rate environments, preserving liquidity for other needs.


“Unlike other yards that typically provide 90-day credit on just their drydock works, we provide credit terms beginning at 12 months, and based on a shipowner’s underlying drydocking and ship maintenance requirements. This allows for the shipowner’s operational expenditure to be spread out over a given period, which can then be better covered by charter hire earnings,” he said.


Sarikaya added: “Yes, there is an element of industry disruption in all of this, but a change to the way in which shiprepair and retrofit projects are executed is long overdue. It is Newport Shipping’s mission to provide shipowners and ship repair yards with a comprehensive service that allows them to benefit in what remains a difficult and competitive market.”


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