ICM303-Shipping Finance and Investment

Module Provider: ICMA Centre
Number of credits: 30 [15 ECTS credits]
Level:7
Terms in which taught: Spring term module
Pre-requisites:
Non-modular pre-requisites:
Co-requisites:
Modules excluded:
Current from: 2022/3

Module Convenor: Ioannis Alexopoulous
Email: i.alexopoulos@reading.ac.uk

Type of module:

Core

Summary module description:

This module will be taught by Mr. Ioannis Alexopoulos and Prof. George Alexandridis

Shipping Finance and Investment focuses on the evaluation and selection of alternative shipping related investment decisions under uncertainty and the different sources of financing available to shipping organizations. The module deals with the process and types of traditional bank financing, as well as alternative sources, such as public equity and bond issuance, private equity and ship leasing, among others. It also provides a rigorous grounding on the long-term investment decisions that shipping businesses make to grow organically or through acquisitions, the valuation tools and analysis used to make these decisions and the factors that affect them.

Aims:

Assessable learning outcomes:

By the end of the module, it is expected that the students will be able to:

• Discuss the principles and trends pertaining the governance of shipping organisations


• Appreciate and evaluate the shipping finance sector, in terms of markets, participants, sources of finance, current trends and future challenges


• Use contemporary tools to conduct financial analysis for investment purposes in the shipping industry


• Apprais e and select among alternative investment plans in shipping


• Describe the process associated with issuing shipping bank loans and the associated credit analysis


• Analyse the framework related to equity and/or debt issuance in public/private capital markets by shipping companies and the factors that affect these decisions


• Propose a financing strategy, through a case-study, for a shipping company


• Estimate the cost of capital and assess the capital structure of a shipping company


• Apply key valuation methods to value shipping organisations


• Evaluate the efficacy of growing through mergers and acquisitions in the shipping industry, the motives and process involved

Additional outcomes:

The student will develop familiarity with sources of shipping finance, and related market data, and gain experience in analyzing the data in ways closely related to shipping market practice. The student will learn to relate corporate data and news to financial management decisions within shipping organizations. The seminars will provide students with the opportunity to propose financing and investment strategies for shipping companies.

Outline content:

• The Global Debt Ship-Financing Industry 


• Bank Credit Policy and Credit Analysis 


• Bank Loan Legal Considerations, Workouts 


• Examples of Second Hand and Newbuilding Ship Finance 


• Asian Ship Finance and Export Credit Agencies 


• Private and Public Equity Markets and Shipping Industry 


• High Yield Bond Markets and Mezzanine Finance 


• Ship Leas ing Structures, KG - KS and Islamic Finance 


• Capital Budgeting & Investment Appraisal 


• Cost of Capital and Capital Structure in Shipping 


• Valuing Shipping Companies


• Mergers and Acquisitions in Shipping

Brief description of teaching and learning methods:

Lectures will be used for the exposition of theory. Classes will be used to discuss non-assessed problem sets and case studies. The techniques used to achieve the stated module objectives will consist of a combination of active teaching, question-answer sessions, class examinations, assignments and class discussions.

Contact hours:

	Autumn	Spring	Summer
Lectures		36
Seminars		4
Guided independent study:
Wider reading (independent)		20
Wider reading (directed)		5
Exam revision/preparation		10
Peer assisted learning		5
Preparation for tutorials		10
Preparation for presentations		10
Preparation for seminars		20
Preparation for performance		20
Preparation of practical report		60
Completion of formative assessment tasks		60
Group study tasks		40
Total hours by term	0	300	0
Total hours for module	300

Summative Assessment Methods:

Method	Percentage
Written assignment including essay	70
Class test administered by School	30

Summative assessment- Examinations:

Summative assessment- Coursework and in-class tests:

Individual assignment based on a licensed case study. 3,000 words maximum. Assignment is given at the start of the term and its deadline is near the end of the term.

The in-class mid-term test takes place in the middle of the term and its duration is 1.5 hours long. It involves short essay questions and problems to be solved.

Formative assessment methods:

Penalties for late submission:

The below information applies to students on taught programmes except those on Postgraduate Flexible programmes. Penalties for late submission, and the associated procedures, which apply to Postgraduate Flexible programmes are specified in the policy £Penalties for late submission for Postgraduate Flexible programmes£, which can be found here: http://www.reading.ac.uk/web/files/qualitysupport/penaltiesforlatesubmissionPGflexible.pdf
The Support Centres will apply the following penalties for work submitted late:

• where the piece of work is submitted after the original deadline (or any formally agreed extension to the deadline): 10% of the total marks available for that piece of work will be deducted from the mark for each working day (or part thereof) following the deadline up to a total of five working days;
• where the piece of work is submitted more than five working days after the original deadline (or any formally agreed extension to the deadline): a mark of zero will be recorded.

The University policy statement on penalties for late submission can be found at: http://www.reading.ac.uk/web/FILES/qualitysupport/penaltiesforlatesubmission.pdf
You are strongly advised to ensure that coursework is submitted by the relevant deadline. You should note that it is advisable to submit work in an unfinished state rather than to fail to submit any work.

Assessment requirements for a pass:

A minimum total final mark of 50%.

Reassessment arrangements:

Reassessment by assignment 

Additional Costs (specified where applicable):
1) Required text books:
2) Specialist equipment or materials:
3) Specialist clothing, footwear or headgear:
4) Printing and binding:
5) Computers and devices with a particular specification:
6) Travel, accommodation and subsistence:

Last updated: 29 March 2022