JPMorgan looks to buy ships in distressed market

JPMorgan looks to buy ships in distressed market    JPMorgan Asset Management plans to capitalize on the battered ship owners' market this year by buying up vessels from distressed sellers, a senior official told Reuters Thursday.
   “The shipping business is in worse shape than real estate,” Joe Azelby, chief executive officer of JPMorgan Asset Management’s $50 billion global real assets group, told the news agency. “In some cases ship values are down between 60 and 80 percent. There is also a lot of optionality in the pricing of vessels, so if the economy comes back, ship prices can move fairly quickly. If you can get in at a relatively low price and put the vessels on short term charters, there is potential for a lot of upside.”
   Azelby said the plan is to partner with ship operators and acquire undervalued ships from panic sellers. With traditional sources of ship financing drying up, potential ship owners need third-party funding at a time when prices are extremely low.
   'Azelby sees continued downward pressure on pricing over the next 12 to 24 months and an opportunity to capitalize on this gap,' the report said. 'JPMorgan is currently in fund-raising mode for the strategy, seeking some $500 million to $750 million initially.'
   The plan is to buy up dry bulk carrier, containerships and oil tankers.