Columbia Shipmanagement rolls out finance arm in fresh bid to crack Italian market

CEO Mark O’Neil argues move helps ‘proud’ Italian shipowning families, but others express doubts

A new finance company established by Columbia Shipmanagement (CSM) is being used to spearhead a fresh drive into the Italian market and develop a new model for Italian shipowners seeking to re-enter the sector.

Chief executive Mark O’Neil said CSM Finance will offer a range financial products including debt finance, equity contributions and use of family offices.

He believes that will enable traditional Italian shipping families to partner with the leading international ship manager.

He said that even where owners are currently able to secure employment of assets, they may lack “the means, desire or confidence to invest in the assets themselves”.

But CSM’s financing venture would “make it affordable and attractive for these families to come back”, he argued.

The ship manager would seek to do the technical management for participating owners and could also assist with commercial management, he added.

Bolster partnership

The move bolsters efforts to lure shipowners as shareholders in its Genoa-based ship management vehicle CSM Italy.

O’Neil argued that the model provides a means for shipping names that exited the sector after the financial crisis of 2008 to return.

“It’s hard to see a market that’s been worse hit than Italy, but there [is] still a wealth of experience and knowledge,” he said.

“The international shipping sector is the poorer for not having a strong Italian contingent at the table”.

Stakeholders in CSM Italy are offered shares on a pro-rata basis according to the number of ships deployed, as well as a position on its supervisory board.

To date, the only company to have subscribed is Italian tanker and bulker owner Premuda, which joined as a founding member and minority shareholder in CSM Italy in October 2020.

O’Neil is confident that the launch of the finance operation will make a difference.

“What we lacked was a means to enable these families who have exited shipping to come back,” he said.

Another hope is that the new generation are taking over in Italy and looking for third-party technical management, said CSM Italy managing director Xanthos Kyriacou.

“In the years since 2008, people have learned that the old models don’t necessarily work,” O’Neil said.

They recognise the need for “a more modern, realistic approach to achieve scalability in ship management”, he said.

He argues that the improved RightShip ratings for Premuda’s bulkers and reduction of tanker costs is a clear justification of third-party management.

An alternative view

Some including Italian financier Fabrizio Vettosi take a different view over the suitability of the CSM model to the Italian market.

“The interests are not aligned” – Italian families want to do the management themselves, argues VSL Club managing director Fabrizio Vettosi. Photo: VSL Club

Vettosi concedes that 80% of Italian shipping families were forced out of the market following the financial crisis or have been left managing the residual assets on behalf of banks and investment funds.

He added that several families retain the technical and skill and knowledge to restart in shipping, such as the branch of the D’Amato family run by brothers Angelo and Umberto.

But the interests of such families are not aligned to those of the large ship management groups, he said.

The principal reason is that families want to manage the ships themselves, Vettosi added.

Vettosi’s investment company, Milan-based VSL Club, is looking at alternative ways of helping such families return to shipping.

He argued that established Italian companies have a competitive advantage over newcomers given their long history and personal friendship with the families.

And his company is looking finding opportunities in the niche sectors such as the chemical and gas tankers or support industries.

“We would like to find a way to combine a competitive offering using our financial resources to such players that have the technical skill and management ability to manage the ships and fleet,” he said.

But in what he describes as “a sign of the times”, most of VSL Club’s recent investments have been in port infrastructure rather than shipowning.

VSL Club reached a deal this month with Italian port company Saar Depositi Portuali whereby the two companies will take reciprocal stake of 10% in one another operations. Other investments include a joint venture with Royal Caribbean Group to invest in new cruise terminal in Ravenna and the acquisition of a stake in the Zephyr Group, a marine spare parts business.