INTERNATIONAL accountant and shipping adviser Moore Stephens has warned that some shipping companies are not adequately prepared to conduct successful negotiations with their banks which are likely to occur with increasing frequency.

Paul Edwards, a Moore Stephens corporate finance director, says, “Shipping is experiencing tough times. An increasing number of companies are unable to repay or, in some cases, even service their debts. That could mean an uncomfortable meeting with the bank. But too many companies are not properly prepared for such an encounter.

“Businesses must be able to produce properly documented and timely financial information for their stakeholders, which should include a view of the future. In good times, when charter rates exceeded operating expenses, little attention needed to be paid to future cash flows and debt service. But today, it is essential to be able to anticipate, to the extent that it is possible, future cash flows and pinch points.

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