Bad ship loan investor SC Lowy eyes German banks after Italian deal
Keith Wallis, correspondent | 19 September 2018
SC Lowy, the Hong Kong-based boutique bank and distressed workout specialist, is targeting more European acquisitions after buying non-performing shipping loans with a book value of USD160 million from Italy’s Banca Monte dei Paschi di Siena (BMPS).
“We’ve spent a lot of time looking at European banks,” said Soo Cheon Lee, SC Lowy co-founder and chief investment officer.
“There is a huge opportunity with German banks,” Lee said at the Marine Money’s Ship Finance Forum in Singapore on 19 September.
While the firm is looking at European expansion, Lee said Asia would remain the company’s primary focus.
“Asia is our core business. Over the next two or three years, there will be a few opportunities in Asia,” Lee said, declining to provide further details.
Lowy has been involved in rescue operations for a raft of shipping companies in the past 10 years. Those companies have included South Korean firms Korea Line, Pan Ocean, and Hanjin Shipping, along with Taiwan’s TMT and Singapore’s Mercator Lines.
Lee admitted its efforts to save Hanjin Shipping, which was the world’s seventh-largest container line when it collapsed in 2016, and Mercator Lines in 2015 were unsuccessful.
“I expected Hanjin to be restructured,” Lee said, adding that Mercator was a casualty of the poor dry bulk market in 2015. “We tried to restructure but it didn’t work out.”
SC Lowy is digesting the acquisition of the bad shipping loan book of state-owned BMPS in what was Italy’s largest shipping debt transaction when confirmed in August.
Lee said the company is still working out its future exit strategy.
“We are trying to work with stakeholders, maybe restructure the loans. We will deploy different strategies for different vessels,” Lee said.
The portfolio covers tankers and dry bulk ships and a single offshore support vessel.
The transaction was fronted by Italian lender Credito di Romagna, in which SC Lowy acquired a 90% stake in April.