In the aftermath of our 40th-anniversary celebration, it’s the perfect time to reflect on four decades of challenges, struggles, and successes; careful steps and timely leaps; insightful moves and informed step-backs; personal growth and fruitful collaborations. But most importantly, half a lifetime of cherished memories, stories, experiences, and relationships. Plus, lots of hard work against a fluctuating backdrop of financial turmoil, untapped potential, rising markets, and historical turning points.
It all began the day after New Year’s in 1984…
THE EARLY YEARS 1984 – 1988
To paraphrase a common say ascribed to Laozi “A journey of a 40 years begins with a single step.”
This first step was taken on 2nd January 1984 in London when I found myself with no job to go to, having stupidly resigned from a well-paid job at a bank, a job which, however, I did not enjoy. So, on January 2nd 1984 I walked in the office of my cousin Michael Tziras in the Spitalfields area of London and set up shop.
Some of you will remember that most of the 1980s where pretty tough times for shipping. From 1981 to 1987 the bay of Salamina was peppered with so many laid up ships that one would have thought they were planning a modern day reenactment of the battle of Salamis with tankers and bulkers replacing the triremes and the Persian ships.
But joking apart these were very difficult times for shipping (certainly the worst market across all sectors since WWII). Funding was scarce, many loans became non-performing, banks panicked, ships were being arrested and sold at auction for ridiculous prices crystallising, in the process, heavy losses.
The shipping crisis of the 80s was responsible for many shipping companies going permanently out of business and for many lenders to shipping (predominantly American) exiting ship financing for good.
It was in such an appalling market that I opted to ply my trade, which “theoretically” consisted of (a) helping shipowners find loans to finance or refinance ships or even to raise working capital to simply operate ships and (b) helping lenders (many with limited knowledge of the shipping industry), deal with heavily distressed situations. For the first couple of years, it was hard going but somehow, we managed to survive. In 1986 I was joined by Janos Koenig my longstanding business partner and close friend who retired in 2018. Together with perseverance, hard work, great moral support from family and friends and a fair share of luck we managed to create a solid platform to build upon.
By 1987 the first rays of light at the end of the tunnel started appearing and by early 1988 the market had dramatically improved. A number of shipowners who read the market correctly, bought ships at rock bottom prices to see their values skyrocketing within 2 or 3 years. Many of these shipowners are among the biggest Greek shipowners today.
By early 1989 we were ready for the next phase.
THE EUROPEAN EXPANSION YEARS 1989 -1999
The improved market gave a big boost to our business. Many of the previous lenders had disappeared and shipowners were not as yet familiar with many of the new faces around. The need to be closer to where many of the owners were located prompted us to open our first office “abroad” in Athens in 1989.
It was a slow start but little by little we started making inroads particularly into non-shipping related business.
In 1992 we opened an office in Oslo to take advantage of the Norwegian banking crisis that had created a major upheaval in the local shipping market. We closed that office in 1996 when the local banks had recovered frοm the crisis and became again more active and our local manager decided to move on.
Also in 1992, during a family trip to Italy I was introduced to the Italian shipping market. The Italian market had recently opened its doors to funding from non-Italian banks and we were among the first to exploit that opportunity. During that period, we managed to conclude business with numerous shipping companies in no less than 10 different cities all over the country.
Our love affair with Italy and Italian shipping lasted for close to 15 years until the global financial crisis of 2008 which had a huge impact on that market. During that period we employed a number of young Italians initially in our London office, and later in our own Genova office.
Finally, in 1999, we established Medfin in Istanbul jointly with Ilhan Yirmibeşoğlu, my good friend and business partner, whose knowledge of the Turkish marker is second to none. We concluded our first deal in Turkey at the end of that year and never looked back.
So, for us the period 1989 to 2000 was a period of consolidation and expansion in Europe. It was also a period that helped us realise that it pays to explore uncharted markets particularly in international shipping where the players and their culture and mentality may change but the fundamental business is the same wherever you may be based.
CONSOLIDATION AND EXPANSION INTO ASIA YEARS 2000 – 2010
The early 2000s marked a significant almost unprecedented boom in shipping which coincided with a big bust of the Greek economy.
We therefore stopped doing corporate finance business in Greece and our Athens office gradually became the centre of our ship financing activity. Among other things it was easier to find suitable personnel in Greece to man a shipping related office than anywhere else on the planet. In December 2002 Yiannis Alexopoulos joined the Athens team.
Our business expanded in Greece, Italy and Turkey notwithstanding the fact that banks kept expanding their portfolios as if there was no tomorrow.
In 2006, following a trip to Japan, we were approached by a Japanese company that proposed to us to create a JV company in Singapore to emulate the Eurofin model there. So, in April 2007, Seafin was established in Singapore as a JV between Eurofin and our Japanese partners.
2008 was marked by the start of our relationship with KfW IPEX-Bank in Germany. For Greek Shipping. Now in its 17th year, our relationship continues to flourish.
The boom in the shipping market continued unabated until the middle of 2008. In April 2008, we concluded the biggest ever single ship financing transaction in Turkey involving 5 shipping banks, all with a long history in ship financing. Then the Global Financial Crisis happened and 2 years later 4 of the 5 lenders were effectively out of shipping. The exodus of, primarily European, banks from shipping which started in 2008 continued throughout the next decade and even the 2020s. In most cases, their decision to quit shipping was not because of the shipping market per se but was prompted by problems elsewhere in the bank.
In the aftermath of Lehman Brothers’ collapse the shipping market took a nosedive. Dimitris Belbas had joined Seafin 2 weeks earlier.
Gerry Zolotas joined the Group in 2009.
Two important events marked 2010 both prompted by the slump in the shipping market. Firstly, we decided jointly with our partner Ilhan Yirmibesoglu to close our office in Istanbul. Then, our Japanese partners in Seafin decided to concentrate their activities in Japan and we bought their share in the JV.
THE ASIAN EXPANSION 2010 – 2020
The change in the ship financing landscape in the wake of the Global Financial Crisis prompted us to look for new sources of funding for our shipping clients.
Starting in 2011, Dimitris Belbas and I started travelling to China, Taiwan, Japan and Korea trying to convince local lenders to consider lending to European shipowners. It was hard work. Chinese Banks had little experience with lending outside their comfort zone which invariably involved a strong Chinese connection. The same applied to Taiwanese banks which were kept busy by a healthy local market and were not familiar with many European owners. The big Japanese Banks had a longstanding presence in Europe, but when it came to shipping they were very selective, preferring bigger companies (preferably listed) with good employment coverage. Long term employment in the prevailing rates did not make sense for most of our customers so we made little progress. Finally Korean Banks were financing only shipowners ordering newbuildings in Korea invariably with local ECA backing.
It took a while for these markets to heat up. The first Asian market to change attitude towards European shipping was the Chinese market. To facilitate the process, the role of international lender to shipping was transferred from the Chinese banks to their leasing subsidiaries so still today with the exception of China EXIM Bank all other international lending from China comes from Leasing Companies.
The decision for Taiwanese banks to venture further afield took a major setback when TMT field under Chapter 11. Some 35 banks were involved as lenders to the TMT Group and the ensuing bankruptcy created many losses. For a long period after that Taiwanese banks were not open to new clients.
Japanese Banks continued to insist on long term employment and Korean banks maintained the same policy.
The collapse of the offshore market created a lot of losses to Asian lenders did not help.
The shipping market continued in its downward trend and in 2016 the freight rates and prices reached their lowest level for 30 years.
During that period, Eurofin was helping KfW IPEX Bank build its Greek shipping portfolio. We also secured a number of restructurings mandates, as well as other advisory work.
After 2016, the market started showing signs of improvement, but it took 2 more years until we closed our first deal with a Taiwanese lender, the first of many. Our 8-year efforts started paying off.
Spiros Vellas joined Eurofin Athens In 2015 and Michael Zolotas at the end of November 2018.
2019 was a very good year for our Group.
THE ROARING TWENTIES 2020 -2024
2020 started with a Bang. A big Bang that nobody saw coming. It was called COVID-19, a virus that killed many people round the world, brought many business sectors to their knees and brought about dramatic changes in working habits worldwide.
Many businesses closed, most people (those who had not been laid off) started working from home. Air travel virtually came to a halt, creating a major crisis to the airline industry and its financiers. Shipping initially suffered a major decline in demand for many goods, as economies slowed down: ship financing took a nosedive. All in all, 2020 proved to be a difficult year for business all around and credit for new projects was scarce.
Shipping usually benefits from crises. So, aside from the initial shock, by mid-2020 the shipping markets lead by containers started improving dramatically. Tankers were also quick to follow.
By 2021 people had more or less reconciled themselves to the new reality, It was time to earn some money, notwithstanding the movement restrictions still imposed by various governments.
Shipowners tired of the inactivity of over a full year started getting busy. Financing was in high demand and banks and other lenders woke up from their torpor and started lending.
A period of great activity started and we were caught in the middle of it. Our business expanded both in volume and range of products. In December 2021, Gonzague Archambeaud joined us and opened our Swiss office, giving us better access to the Central European business. Michael Zolotas pushed forward with the advisory activity in 2022 and 2023 and landed significant mandates whilst Dimitris Belbas expanded further our Asian footprint. Spiros Vellas managed to conclude our very first JOLCO.
2021 was record year for our Group. 2022 topped that and 2023 was even better. The forecast for 2024 is that it will be better still.
On 2nd January 2024 Eurofin celebrated its 40th year.
A month ago, we celebrated these 40 years alongside family, friends, colleagues, and partners in a dinner party by the sea that we hope everyone will remember dearly. So, here’s to repeating this joyful get-together when we reach our next milestone!
