Coursecode: mt724

Coursename: Ship Finance

ECTS creditpoints: 3

Subfaculty of Mechanical Engineering and Marine Technology

Lecturer(s): Prof. Dr. Ir. U. Nienhuis MBA

Tel.:  015-27 8 5306

Catalog data:

Ship finance, mortgages, balance sheet fundamentals, yard financing, ship financing, cost price & exploitation calculations, cost calculation systems, exchange rates, ship finance evaluation criteria, second hand ship markets, freight rates and day rates, types of freight contracts, liabilities and insurance, banks & insurers, investment evaluation, discounted cash flow, net present value, risk appraisal, internal and external factors for owners and yards.

Course year:

MSc 1^st year

Period:

2A

Class hours per week:

3 to 4 hrs per week

Other hours:

Individual assignment & presentation

Assessment:

Report + exam + presentation

Assessm.period:

(see academic calendar)

Prerequisites:

For academic students: 3rd year Shipbuilding courses : mtp302, mtp305; For INHolland-students: completed 3rd year of studies.

Follow up:

mt726

Detailed description of topics:

The course consists of the following elements:

1)       Classes by (mostly) guest lecturers;

2)       Writing of summaries of the guest lectures by each individual student;

3)       An individual assignment on a predefined topic which the student is expected to study and write a report on;

4)       An individual presentation by each student on the assigned subject;

5)       A written exam.

Class subjects

1. Targets of the course, distribution of the individual assignments, fixing the presentation dates. Presentation by last year’s winner. Introduction to ship finance. Cost calculation.
2. Continuation of ship finance basics. Cash flow prognosis. Discussion of possible exam cases.
3. Balance sheet structure. Balance sheet interpretation. Financial analysis of projects by means of DCF, NPV and IRR.
4. The role of banks in ship finance. The view of banks to ship finance proposals. The impact of shipping market behaviour on ship finance.
5. Ship insurance market. Finance issues for shipyards.

The order of the classes and the lecturers vary each year. The lecturers are predominantly from industry and financial service companies.

Assignments

Ø       Make summaries of the guest lectures in no more than 2 A4. These summaries to be handed in no later than during the next class;

Ø       Find literature relevant for the individual assignment and prepare a list;

Ø       Formulate the goal of the own assignment, write a plan for the approach and describe the method of research.

Ø       Make a planning for the own activities in this course together with the moments of start and completion and the effort required in hours.

Ø       Make a midway progress report for the written assignment.

Ø       Finish the written assignment in the form of a report.

Ø       Present the assignment orally to the lecturer and the fellow students in approximately 20 minutes.

Each student will receive a particular subject for his/her assignment. This will be distributed during the first class. The student is expected to work independently on his/her assignment. He/she is expected to search for and study suitable literature.  Through this he/she will gain knowledge of the theoretical background to ship finance, the methods used, practical cases and the corresponding terminology. The student is free to take the initiative to talk to companies to gather information, e.g. by contacting owners, yards and banks.

The written report of the assignment is to be handed in not later than the moment that the oral presentation is held. Oral presentation to be supported by PowerPoint. Written presentation in MS-Word. Digital files with Word-files and PowerPoint-files to be supplied to the lecturer.

Each student is expected to participate in all classes and attend all presentations by fellow students. Each student must take the written exam.

Course material:

To be supplied during the course.

References from literature:

·         General literature on finance (terminology, definitions, main concepts) and methods for evaluating investments.

·         Specific publications on ship finance. Books by Peter Stokes, Sloggett, Stopford and others. Report on UNAS (UNiforme Administratie in de Scheepsbouw), etc.

·         Sources such as accountants and banks, e.g. KPMG, PriceWaterhouse, ArthurAndersen, ING, NIB Capital, etc;

·         Shipping consultants such as Drewry, Ocean Shipping Consultants, etc;

·         Sector representatives such as KVNR and VNSI;

·         Internet;

·         Material of Cambridge course on Ship Finance.

Remarks assessment, entry requirements, etc.:

Students must register at least two weeks before start of the course. Registration only by means of BlackBoard. INHolland students may register with the secretary of the Ship Production Department, Mrs A. Nieuwland-Jobse, secretariaat.scheepsbouw@wbmt.tudelft.nl. A limit on the maximum number of students may be applied in connection with the fact that each student is to make a presentation. In view of the guest lecturers a minimum number of participants may als apply. If the number of registered participants is below this number the course may be canceled.

Since the course is organised in co-operation woth the NESEC and Dutch industry and banks, the preferred language is Dutch. For foreign students the lecturer may decide to hand out a specific assignment in fulfillment of this course.

Grading

Grading is a weighted average of the following:

-          Presence and participation of each student in class;

-          Quality of the summaries of the guest lectures;

-          Quality, quantity and  depth of the written assigment as presented by the report;

-          Quality of the oral presentation;

-          Written exam, partly multiple choice and partly ship finance cases.

Report

The report must contain:

-          An elaboration of the assigned subject in terms of:

• Formulation and interpretation of the assignment in terms of objectives;
• Concise description of the method followed to do the research and the corresponding approach to the assignment;
• Structured presentation and analysis of the gathered material: theory, data, information, etc;
• Discussion and evaluation of the obtained results on the basis of the theory and the relevant criteria;
• A critical review of the findings as well as conclusion;

-          Short summaries of the (relevant parts of) studied literature, in appendices.

The presentation must satisfy:

-          Covering goal, analysis, evaluation and conclusions

-          Not more than 15 minutes;

-          Additional 10 minutes of discussion.

For the student with the highest mark, an award is presented by the NESEC. This consists of a fully paid international course in ship finance at Cambridge, England.

Learning goals:

The following learning goals are pursued. Upon completion of the course the student must be able to:

1.       Explain and interpret the importance of and processes involved in ship finance;

2.       Understand and explain the role of finance in the acquisition of shipbuilding orders by shipyards

3.       Apply the insights in ship finance to evaluating the exploitation of ships;

4.       Explain and interpret the role of the various actors in ship finance;

5.       Determine and interpret the influence of finance on the pricing of ships and the capital costs during exploitation;

6.       Explain and interpret the risks of each party involved in ship finance and the resulting problems and constraints;

7.       Evaluate an investment into mobile capital goods by means of discounted cash flow calculations and related methods.

Computer use:

None

Laboratory project(s):

None

Design content:

None

Percentage of design:  0%