Nordcapital in KG exit

Nordcapital has temporarily exited the KG business in response to a collapse in investor interest in the sector.

The Hamburg finance company says it has also sacked 25 of its 90 staff effective immediately as part of the restructuring.

"For some people a new function has been found within the ER Capital Holding group, but unfortunately not for all," spokeswoman Stefanie Rother told German media.

"The remaining staff within the company will now urgently attend to the management of ongoing finance projects."

Nordcapital's hundredth shipping fund, which will be used to finance the Hyundai Heavy Industries-built, 13,100TEU 'Benedetta', looks to be its last.

Since the height of the world financial crisis in 2008, the business for closed-end funds has come to a virtual standstill.

Many ship funds have been running at a loss in recent years because most of the assets have been unable to generate the necessary revenue to pay the interest or repay the loans.

Nordcapital also blamed its exit on the impending introduction of new European Union accounting requirements for closed-end funds.

But Nordcapital's restructuring is symptomatic of the wider problems facing the Hamburg ship finance market.

Before the financial crisis, the Hanseatic city was considered a global stronghold for ship financing, especially in container shipping.

German media says the withdrawal of banks like Commerzbank and the decline of the closed-end funds raise the question of how Hamburg's financial system will be able to survive.

Source: TradeWinds