Friday, January 15, 2010

Diana Shipping Looks To Operate Container Services

Bulk Shipper Set to Reverse the Trend
Shipping News Feature

GREECE – Bulk cargo operator Diana Shipping has announced their intention to form a new company in the next twelve-to-eighteen months that shall operate in the freight container markets. The move is contrary to the recent trend that has seen container operators investing more heavily in the bulk shipping sectors, whose rates have proven far more resilient throughout the recession.

Diana Shipping states that they intend to invest $50 million for a minority stake in the new business with additional funds to be raised by other interested parties. The creation of the new company is entirely dependant on enough outside capital being raised.

The new operation would have a number of executives transferred from Diana to management positions and would be expected to enter into vessel management and administrative agreements with Diana Shipping. As long as these are in place, and as long as the new entity does not invest in any other bulk vessel operator, Diana would agree not to invest in other container shippers.

The move is a bold one by Diana. With a number of charter agreements recently agreed for their bulk carrier fleet and many container liners still reeling from heavy losses last year, coupled with uncertainty over the strength of economic recovery, an investment in the container shipping could prove a miscalculation. No doubt the management at Diana is anticipating moving into this market in time for recovery.