A change of US president could allow UK financial advisor Braemar Naves to collect some overdue fees relating to an LNG export project put on hold earlier this year.
The finance arm of shipbroking group Braemar Shipping Services made provisions for bad debts in the six months to 31 August, due to money owed by its unnamed client.
Braemar finance head and chief operating officer Nick Stone told TradeWinds that the "quite significant" project involved the long-term goal of Braemar Naves raising money for the customer, for which it was being paid a retainer.
Shifting politics
"Unfortunately the whole thing ground to a halt in March, partly due to Covid-19 lockdowns, but also because it involves exports of US LNG to China, and obviously China-US relations have been pretty poor over the last six to eight months," Stone said.
"Clearly with a change of politics in the US, that whole sector may take a bit of a lift at the same time as coming out of Covid," he added.
Stone said if that happens, some of the fees could be collected.
"It's unfortunate that something that looked promising 15 months ago has really ground to a halt," he added.
Braemar Naves reported profit of £700,000 ($900,000) in the six months to 31 August, down from £900,000 in 2019.
The operation made more money from fees for restructurings and working with owners to help them buy back their own debt at discounted level.
Debt being worked on
Regarding Braemar's own net debt, executive chairman Ron Series said this was "too high, and that's something we're working on".
Series also explained more about the tie-up announced this week between Braemar Naves and UK ship manager V.Ships to advise struggling cruiseship companies on finance, lay ups and restructuring.
"Some of the team at Braemar Naves had previously worked with V.Ships on restructuring certain debts, whether that was out of the US, or the UK bond market," he said.
"There is a depth of experience there."
He added that, with the news of a working vaccine for Covid-19, "we saw this week that 10 minutes can change the whole world", in terms of rapid rises for the stock prices of cruiseship owners.
"It's quite an exciting place for us to be working," Series added. He said the two companies have offices across the street from each other in Hamburg.
Due to a second lockdown in the UK, Braemar has just a "skeleton staff" in the London office, according to newly appointed group chief executive James Gundy.
"It's business as normal for us. We all got used to it from the previous lockdown," he added.
"There are a few disgruntled people who want to be in. People are missing a team environment, but it worked well last time," Gundy said.
The shipbroking executive said markets, particularly tankers, were "pretty out of control" earlier in the year, and the company was able to grab a lot of that business.
"It was a pretty fun time to be a broker. Some 18-hour days, but it was fun and we did well there," Gundy added. "It's going to be a year of two halves for sure."
